Tuesday, August 4, 2020

July 2020 Dividend Stock Purchases

Today, I'll be highlighting dividend stock/mutual fund purchases within my portfolio during the month of July.

As I'll discuss below, July was a continuation of relatively low deployment of investment capital for me due to the fact that I am finishing up on deleveraging from a bit of credit card debt before my promo 12 month interest free APR expires (which will soon carry a ~25% APR) and other various small debts.


As illustrated above, between my 7% gross contribution and my employer's 3% match on my contributions in my retirement account, I was able to contribute gross capital of $251.24 and $239.94 in capital net of sales charges.

These contributions allowed my Capital Income Builder (CAIBX) holdings within my retirement account to grow from 116.430 shares entering July to 120.546 shares entering into August.

Assuming $2.14 in annual forward dividends/share, the extra 4.116 shares of CAIBX boosted my annual forward dividend income by $8.81, which equates to an average net yield of 3.67%.

When also weighing the $300 of my own capital that I contributed to my Robinhood portfolio and the $60.09 in dividends that reduced my margin balance from approximately $2,100 entering July to just under $1,750 heading into August, my annual forward dividend income was increased by ~$18.00 (given the 5% cost of capital for Robinhood margin).

Concluding Thoughts:

Overall, I deployed $600.03 in capital during the month of July to investments/deleveraging Robinhood (compared to $661.35 in June) and added $26.81 in annual forward dividend income, which worked out to an average yield of 4.47% on my capital deployed.

When factoring in the impact of dividend announcements during July (D and WFC dividend cuts and an SJM dividend increase), my annual forward dividend income increased $8.81.

While it has been a slow and steady endeavor to restore my dividend income to my all-time high of $1,252 just a couple months ago, I'm now less than 2% away from doing so.

Discussion:

Did you experience any dividend cuts during July as I did with D and WFC?

How was your month in terms of dividend stock purchase activity?

As always, I appreciate your readership and look forward to reading your comments in the comment section below.


Tuesday, July 28, 2020

July 2020 Dividend Income

As I'm writing this post, the month of July will come to a close in just 3 days!

The temperatures remain too high for my liking as it has regularly been in the low to mid-80s here in Central Wisconsin and I'm looking forward to the fall to provide a respite from this oppressive heat.

With that aside, I'll turn to the intent of this blog post, which is to provide a rundown on my dividend income received during the month of July.







Analysis:

Overall, I collected $73.79 in dividends during the month of July 2020 net of the $9.21 in Robinhood Gold fees and interest on margin during the month of July.

This represents a 49.0% quarterly growth rate compared to the $49.52 in dividends that I received during the month of April 2020 and a YoY growth rate of 118.1% against the $33.84 in dividends collected in July 2019.

Factoring out the timing of a dividend payment from Simon Property Group (SPG) that skewed my dividend income higher for July, my dividends collected during the month would have been $65.99, which still represents a solid quarterly growth rate of 33.3% and a YoY growth rate of 95.0%.

Going into the specifics of my dividend income during the month, I received $60.09 in dividends in my Robinhood portfolio (from 16 companies) net the $9.21 in Robinhood Gold fees/interest on margin during the month, $13.46 in dividends from 6 companies within my Webull portfolio, and $0.24 from 11 companies in my M1 Finance portfolio.

The $24.27 increase in dividend income from April 2020 to July 2020 is as a result of the following activity within my taxable accounts:

The timing of Simon Property Group's (SPG) dividend resulted in an additional $7.80 in dividend income for the month of July.

W.P. Carey's (WPC) most recent dividend increase resulted in an extra $0.01 in dividend income for the month of July.

My March 2020 addition of 3 shares of Leggett & Platt (LEG) boosted my dividend income by $1.20 during the month of July.

My second tranche of shares of Main Street Capital (MAIN) that were also acquired in March 2020 paid dividends for the first time, which added $1.02 to my dividend income in July.

The announcement from Ventas (VTR) that it was cutting its dividend was first felt in July, which resulted in a $2.41 subtraction from my dividend income during the month (including the $0.01 reduction in my M1 Finance portfolio dividend income).

GlaxoSmithKline's (GSK) varying dividend payments resulted in $0.65 less in dividends during the month of July.

My March 2020 purchase of a share of Philip Morris International (PM) led to a $1.17 increase to my dividends collected during July.

My purchase of 2 shares of Genuine Parts Company in March 2020 resulted in a $1.58 boost in the amount of dividends that I collected in July.

The $9.21 in Robinhood Gold fees/margin interest during the month of July was a $14.20 reduction compared to the $23.41 in expenses during the month of April, leading to a significant increase in net dividend income.

My April purchase of 1 share of STORE Capital (STOR) within my Webull account helped me to collect an additional $0.35 in dividend income during the month of July.

Concluding Thoughts:

Despite enduring a few dividend cuts this year that have wiped out about 7% of my pre-COVID-19 dividend income, my dividend income continues to hold fairly steady as I go about deleveraging from my Robinhood margin, which currently sits at just under an $1,800 balance.

In less than 2 months, I'll finally be able to return to material capital deployment in the range of $1,500-$2,000/month.

Discussion:

How many companies that you received dividends from during July cut or suspended their dividend since your April income report?

How has your dividend income fared on a quarterly and a YoY basis during the month of July 2020?

As always, I value your readership and look forward to reading any comments that you leave in the comment section below.

Tuesday, July 21, 2020

Expected Dividend Increases for August 2020

As I'm writing this post, the month of July is less than a week and a half away from ending.

It's difficult to believe that we'll soon be entering the month of August and fall will soon be upon us, which will bring a respite from the oppressive heat that we've been experiencing here in Central Wisconsin.

With that out of the way, I'll turn my attention to the intent of this post, which is to discuss my expectations for dividend increases for the upcoming month.


Actual July 2020 Dividend Announcement(s):

Dividend Cut: Wells Fargo (WFC)

Just last week, Wells Fargo (WFC) announced that it would be cutting its quarterly dividend 80.4% from $0.51/share to $0.10/share.

Given the current economic environment and challenges that WFC has encountered (WFC posted its a loss in Q2 2020 for the first time since 2008), it is understandable that WFC would announce this dividend cut while former Visa CEO and newly minted WFC CEO Charles Scharf aims to turn the ship around following WFC's 2016 scandal that revealed WFC's employees were pressured into hitting sales targets and opened millions of phony accounts to do so.

Across my 8 shares of WFC, this announcement resulted in a $13.12 decline in annual forward dividends.

Second Dividend Cut: Dominion Energy (D)

Given the mounting costs and delays in getting the Atlantic Coast Pipeline online that Dominion Energy owned a 53% stake in (after buying out Southern Company's 5% stake earlier this year) and Duke Energy owned a 47% stake in, the two companies made the decision to abandon the project.

D also announced that it was cutting its quarterly dividend 33.5% from $0.94/share to $0.625/share, which is disappointing.

It does make it an easier pill to swallow knowing that D's dividend payout ratio will be much more sustainable and allow the company to focus on generating earnings growth in the future.

Over the 4 shares of D that I own, my annual forward dividends dropped by $5.04.

Dividend Increase: J.M. Smucker (SJM)

J.M. Smucker (SJM) announced a 2.3% increase in its quarterly dividend from $0.88/share to $0.90/share, which is precisely what I forecasted in my previous post of this series.

Any dividend increase or even a dividend announcement in line with the previous is fine with me, so I warmly welcome SJM's dividend increase.

Across my 2 shares of SJM, my annual forward dividend income advanced $0.16.

Expected Dividend Announcement(s) for August

Dividend Increase: Altria Group (MO)

I'm expecting Altria Group (MO) to build upon its 50 consecutive years of dividend increases this August.

Despite COVID-19, MO delivered solid operating results in Q1 2020 as I outlined in my previous Seeking Alpha article on the company.

It's for this reason that I am expecting MO to announce a 3.6% increase in its quarterly dividend from $0.84/share to $0.87/share as it works to strengthen its balance sheet and continue to diversify away from its core tobacco business, especially through its partnership with Philip Morris International (PM) to distribute IQOS in the United States.

Concluding Thoughts:

My dividend income has declined by $18.00 during the month of July as a result of the aforementioned dividend announcements.

It has been a difficult year as far as my dividend income is concerned with regard to dividend announcements as my annual forward dividends have been reduced by $85.04 this year as a result of dividend cuts and suspensions, which represents a roughly 7% cut to my annual forward dividends.

As a result of my contributions to my retirement account and the deleveraging of my Robinhood margin through occasional deposits and dividends received in the account, my annual forward dividend income over the past few months has held steady despite the cuts and suspensions to date.

Discussion:

Have you endured any dividend cuts during the month of July?

Do you think most dividend cuts/suspensions have already been announced to date or have we not yet experienced the worst of the COVID-19 recession?

As always, thanks for reading and I welcome your comments in the comment section below.

Tuesday, July 14, 2020

June 2020 Dividend Stock Purchases

With the 4th of July now past us, summer is now unofficially in full swing. Relying on the temperatures alone reinforces this argument, as it has reached into the 90s several days in the past week here in Central Wisconsin.

With that said, I'll now get into the intent of this post, which is to discuss the dividend stock purchases and activity within my portfolio for June 2020.


As illustrated above, my employer and I deployed $302.39 in capital (including the $56.68 in CAIBX dividends during June) and $291.35 in capital net of sales charges.

These capital contributions/dividends allowed my stake in CAIBX to advance from 111.333 shares heading into June to 116.430 shares heading into July.

The 5.097 shares of CAIBX that were added during June are expected to add $10.91 in annual forward dividend income, assuming annual dividends/special dividends/share of $2.14, which equates to a net dividend yield of 3.74%.

The only other bit of activity within my portfolio for the month of June was a $295.00 deposit into my Robinhood account and the dividend income within my Robinhood portfolio to bring my Robinhood margin balance down from ~$2,500 to ~$2,100.

The reduction of ~$370 of my Robinhood margin increased my net annual forward dividend income by $18.50 at the current Robinhood margin interest rate of 5%.

Concluding Thoughts:

Overall, I deployed $661.35 in capital during the month of June, which works out to a yield of 4.45% when considering the $29.41 in net annual forward dividend income added on the aforementioned capital investments.

As a result of the capital investments and the dividend cut from Simon Property Group (SPG), my net annual forward dividend income advanced about 1%, from $1,222 to $1,232.

I have since pushed my timeline back to begin fully investing the $1,500-$2,000/month that I was anticipating this month to September as I failed to factor in some debt that needs to be repaid in the next couple months, so the last 3-4 months of 2020 are positioned to bring a renewed intensity on the capital deployment front.

Discussion:

Did you deploy more or less capital than you anticipated for the month of June?

Did you endure any dividend cuts as was the case for me with SPG?

As always, I appreciate your readership and welcome your comments in the comment section below!