Tuesday, January 30, 2024

January 2024 Dividend Stock Purchases/Sale

As I'm writing this blog post, it's already January 22. The temperature has been trending higher to uncharacteristically warm levels again here in Central Wisconsin. The next week is expected to feature high temperatures into the low- to mid-30 degrees Fahrenheit range. Even the lows will reach into the high-20s to low-30s.

As has been the case for the last several months, I have been building up my emergency fund. Thus, I have sold some holdings and shuffled capital proceeds into what I believe are higher quality businesses. This continued in the month of January.

My lone transaction for January was the sale of all 32 of my shares of Leggett & Platt (LEG) at $25.75 each. This was a sale that I made preemptively to avoid a potential dividend cut from the company. As my Dividend Kings colleague Dividend Sensei has repeatedly pointed out with research from Hartford Funds, dividend cutters and eliminators drastically underperform dividend growers and initiators.

In a recent article, Dividend Sensei notes that the dividend is expected to consume virtually all of LEG's FCF in 2024. Worse yet, that is before considering the impact of a potentially mild recession. Not to mention that its interest coverage ratio through the first nine months of 2023 was just 4.4. If a recession were to hit, the company would be pressured by rating agencies to cut the dividend to preserve liquidity.

I haven't deployed my capital proceeds into anything new yet, but Enbridge (ENB) is my top candidate. Interested readers can check out why I want to open a position in ENB in my December article. Basically, ENB has a firmly investment-grade balance sheet, a well-covered and comparable yield to LEG, and reasonable growth prospects, all at an attractive valuation.

Concluding Thoughts:

I would like to swing from no refund ahead of my 2023 tax filing to a modest refund and increase the proportion of my tax-advantaged investments relative to total investments. To do this, I am going to keep saving in my emergency fund for the foreseeable future. I'll then open and max out an IRA with the $6,500 annual contribution limit for those under age 50.

This way, I can backload my investments for 2023. During the summer and fall, I hope to again max out my contribution for 2024. All the while, my approach should allow me to maintain an ample emergency fund.


How did you fare on capital deployment in January?

Did you sell any positions as I did with LEG? Did you open any new positions?

Thanks for your readership! I look forward to your comments below.

Tuesday, January 23, 2024

My Financial And Personal Goals For 2024

As I'm writing this blog post on January 17th, it's hard to believe that there are just two weeks left in this month. The low temperatures here in Central Wisconsin are set to remain in the negative Fahrenheit territory, although not as bad as the -30 with wind chill that we have been experiencing. Fortunately, in a few days, the low temperatures will reach into the upper 20s with highs getting above freezing.

With that aside, now is time to set my new financial and personal goals for 2024.

Image Source: Pexels

My Financial Goals For 2024

1. Generate at least 20% growth in net dividends collected

In the last few years, my net dividends have routinely grown by 40% or more. However, I believe this will be coming to an end in 2024. That's because aside from having less capital to invest than in the last couple of years, my portfolio base is making it more difficult to post these types of growth rates.

Fortunately, I still think a 20% growth rate is doable. Off the top, my organic growth should come in around 10% from dividend reinvestment and dividend growth. I figure another 10% dividend growth from capital deployment is reasonable and gives me flexibility to be more qualitative (e.g., lower yield and higher growth prospects) with my dividend stock purchases.

2. Grow net annual forward dividends by 20% by the end of the year

Similar to my first goal, I am aiming for 20% growth in my net annual forward dividends heading into 2025. For the reasons that I already discussed in my previous goal, I think that this will also be a doable goal.

Personal Goals For 2024

1. Jog At Least 10 Miles A Week

As the weather has become more unfavorable in recent months, I have shifted my exercise routine to the indoors. I have enjoyed jogging on the treadmill these last couple of months and plan on continuing to do this throughout the year. As the weather warms up, I will spend more time outside. However, I intend to stick with my routine on the treadmill moving forward in lieu of exercise in the outdoors.

2. Lift Weights At Least Four Times A Week

Since November, I have been lifting weights. Given my 5'8'' and 125 pound frame, I started out doing at least two sets of 10 reps of various exercises with eight pound weights four times a week. As the year comes to a close, I would like to work my way up to doing the same amount of sets and reps with 15 pound weights.

3. Publish A Blog Post Each Week

As I have done for nearly five and a half years now, I plan on continuing to publish a post to this blog each week. I enjoy updating readers on my progress with dividend growth investing to demonstrate the power of the strategy in real time, so this is a goal I envision running back year after year.

Concluding Thoughts:

Overall, I am excited to see what the new year brings. In recent months, I have been clearing what I view as dead weight out of my portfolio. Also, I look forward to likely resuming capital deployment in just a few more weeks and further improving on the quality of my portfolio. Fitness-wise, I enjoy the grind of the everyday routine of remaining active and am eager to continue this in 2024.


What are your goals for 2024?

Do you believe any of your goals are going to be more challenging to accomplish than any others?

I appreciate your readership and welcome your comments below!

Tuesday, January 16, 2024

Review Of 2023 Goals

As I'm writing this blog post, it's already January 8th, 2024. Surprisingly, the weather here in Central Wisconsin continues to be quite mild. The temperature is expected to reach a high of 30 degrees Fahrenheit today. Anything around freezing for this time of the year is pretty rare, so I'll take it!

Now that 2023 is fully in the rearview mirror, it would be a good time to briefly go over whether I achieved my revised goals for the year.

Image Source: Pexels

Financial Goals for 2023

1. End 2023 With a Six Month Emergency Fund - Fail

At the end of 2023, my emergency fund (also factoring in taxable account dividend income) was five months. That was just short of my goal for the year. However, this was only because I realized at the end of the year that my estimated tax payments for 2023 weren't quite enough throughout the year. Thus, I had to chip in more than I anticipated. Factoring this out of the equation, I would have had a seven month emergency fund heading into 2024. The good news is that after this month, I should be at my target of a six month emergency fund.

2. Conclude 2023 With at Least $4,300 in Net Annual Forward Dividends - Pass

I narrowly topped my goal of $4,300 in net annual forward dividends heading into 2023, ending the year at around $4,315. This was mostly thanks to my capital deployment throughout the first eight months of the year and dividend growth/reinvestment in the last few months of the year.

3. Reach $120,000 in Investments and $140,000 in Net Worth - Pass

On the investment value front, I beat my goal by a few percent. In terms of net worth, I barely met my goal for 2023.

Personal Goals for 2023

1. Publish Approximately 360 Motley Fool Articles - Pass

At my rate of about 10 Motley Fool articles a week through the first eight months and change of 2023, I met my updated goal of publishing 360 articles during the year.

2. Publish At Least 90 Seeking Alpha Articles - Pass

I topped my goal related to Seeking Alpha in 2023. For the year, I had 95 articles published.

3. Publish 1 Blog Post Each Week - Pass

Finally, I succeeded on the blog front. In 52 Tuesdays, I published 52 blogs in 2023 - - exactly one blog each week as I intended.

Concluding Thoughts:

In the face of my job loss in September, I transitioned quickly adapted. In fact, I moved immediately from writing for Motley Fool to ramping my production at Seeking Alpha back up. There wasn't a single day that I was out of work, so I'm pleased with how I fared in the face of challenges in 2023.


How was your 2023?

Did you revise your goals part of the way through the year as I did or did you stand by your goals?

Thanks for your readership and please consider commenting below!

Tuesday, January 9, 2024

December 2023 Dividend Income

As I'm writing this blog post, it is officially 2024. Although it is cold in absolute terms, the weather here in Central Wisconsin remains warm for this time of year. The high temperature for today is expected to reach 31 degrees Fahrenheit!

With that aside, I plan on highlighting my net dividend income for December 2023. Let's dive into it!

During December 2023, I collected $529.78 in net dividends. Compared to the $434.85 in net dividends received in September 2023, this represents a 21.8% quarterly growth rate. Even factoring out the special dividend and annual fee from my Capital Income Builder (CAIBX) mutual fund in my retirement account, my net dividend income grew by 3%.

On a year-over-year basis, my net dividends surged 25.2% higher versus the $423 in net dividends that I collected in December 2022.

Rather than discuss every aspect of how my net dividends climbed by $94.93 from September 2023 to December 2023, I will discuss activity within each of my accounts at a high level.

I received $349.33 in net dividends from 47 companies within my Robinhood portfolio. Growth in my Robinhood portfolio was driven by dividend raises from Broadcom (AVGO) and Main Street Capital (MAIN), as well as my new position in Ares Capital (ARCC). This was partially offset by the timing of dividends from PepsiCo (PEP) and Digital Realty Trust (DLR), which will be paid in January.

My Webull account generated $16.82 in net dividends across six companies (not pictured is the $8.40 in combined net dividends received from Lockheed Martin and Broadcom). Dividend boosts from Visa (V) and Lockheed Martin (LMT) in October and the December hike from AVGO contributed to this higher dividend income.

I collected $0.52 in net dividends from 23 companies in my M1 Finance portfolio. Fastenal's (FAST) special dividend more than offset the loss of income due to PepsiCo's (PEP) dividend payment timing.

My retirement account produced $163.11 in net dividends from my CAIBX mutual fund holding. A special dividend and a higher share count due to dividend reinvestment led my net dividends higher.

Concluding Thoughts:

December 2023 was the first month in which my net dividends exceeded $500. I don't anticipate to collect $500 in net dividends in a given month again until likely September or December of this year. However, I feel very blessed to have reached that mark during the month.

As I anticipate resuming capital deployment in February, my net dividend income should steadily continue to climb in 2024.


How was your dividend income for December 2023?

Did you receive any special dividends?

I appreciate your readership and welcome your comments below!

Tuesday, January 2, 2024

December 2023 Dividend Stock Purchases

As I'm writing this blog post, it's hard to believe that 2023 as we know it is just three days away from reaching its conclusion. Still, the temperatures here in Central Wisconsin remain warm for the season. It is expected to reach a high of 40 degrees Fahrenheit later today.

With that aside, now would be a good time to discuss the transactions that I completed in December. Let's dig in.

First, I closed out my seven share position in Medifast (MED) for an average price of $67.04 each. Earlier in the month, the company announced that it would be discontinuing its quarterly dividend per share of $1.65. MED intends to invest this cash to enhance the customer experience and acquire customers to revive its growth story. Overall, I think this was a necessary move on the part of the company to reinvent itself amid the anticipated surge in the popularity of the GLP-1 drug class. But since the vast majority of dividend cutters and suspenders underperform the market as a whole, I simply don't have the patience to ride this one out any longer. The dividend suspension and my sale of shares reduced my net annual forward dividends by $46.20.

My first move to redeploy these proceeds came with my addition of 12 shares of Ares Capital (ARCC) at an average price per share of $20.09. Readers curious on my buying rationale for ARCC can check out my Seeking Alpha article from two months ago. This boosted my net annual forward dividends by $23.04, which equates to a 9.56% dividend yield.

The other transaction I executed to redeploy capital proceeds was seven units of MPLX LP (MPLX) at an average cost of $35.67 a unit. This lifted my net annual forward distributions by $23.80, which equates to a 9.53% distribution yield. For my investment thesis, interested readers can peruse my recent Seeking Alpha article on MPLX.

Finally, I reinvested $176.88 into my Capital Income Builder (CAIBX) mutual fund holding (net the $10 annual fee) within my retirement account from a previous employer. These dividends, special dividends, and capital gains payments added 2.706 shares to my share count. That upped my net annual forward dividends by $5.764, which equates to a 3.26% net dividend yield.

Concluding Thoughts:

December 2023 marked the fourth consecutive month that I worked on building my emergency fund to a more robust level. At the rate that I am going, I anticipate that my emergency fund will be up to my target by the end of January. Thus, I hope to begin investing between $1,500 and $2,000 in capital each month starting in February.


How was your month for capital deployment?

Did you open any new positions or close any positions in December 2023?

As always, thanks for reading and please feel free to comment below!