Tuesday, January 19, 2021

Expected Dividend Announcements for February 2021

As I'm writing this blog post, it is mid-January here in Central Wisconsin and the temperatures are hovering just above freezing. It's incredible to think that the temperatures haven't yet dipped that far below freezing in my neck of the woods when there have been many Januarys that have been around sub-zero!

With that in mind, I will be discussing the dividend announcements in my portfolio during January 2021 and looking ahead to the dividend announcements that I am expecting in February 2021.

Actual Dividend Announcements for January 2021

Increase: Enterprise Products Partners (EPD) 

Well, a distribution increase from Enterprise Products Partners (EPD) is a pleasant surprise as I had almost forgot that the last time EPD increased its distribution was a calendar year ago, a couple months before COVID-19 was declared a pandemic by the World Health Organization, turning the world upside down.

Due to the expectation of a recovery in economic activity going forward, energy commodities have soared, with WTI crude surpassing $50/barrel and natural gas closing in on $3/MMBtu.

As a result of the anticipated recovery, EPD opted to announce a 1.1% increase in its quarterly distribution from $0.445/unit to $0.45/unit.

Across my 33 units of EPD, my net annual forward distributions advanced $0.66 due to EPD's distribution announcement.

Reinstatement: Tanger Factory Outlet Centers (SKT)

Arguably the biggest positive development in my dividend portfolio was the reinstatement of Tanger Factory Outlet Centers' (SKT) dividend at $0.1775/share (roughly half of the previous dividend). It was only about 8 months ago when SKT was one of the companies in my portfolio to announce a dividend suspension or cut.

Given that SKT is required by law to pay out at least 90% of its net income to maintain its status as a REIT and that SKT has reported positive cash flow in the second half of 2020 on top of maintaining a strong balance sheet, I believe that SKT made the right decision with this announcement.

Across my 11 shares of SKT, this announcement helped my net annual forward dividends to surge $7.81.

Freeze: Realty Income (O)

In a surprising turn of events, Realty Income (O) opted to maintain its monthly dividend at $0.2345/share.

While I will never fault a company for being conservative in its dividend policy (how else would a company continually pay out steadily increasing monthly dividends?), it was surprising that O's reasonably strong operating results didn't lead to the company announcing a 2-3% increase in the monthly dividend as I expected in my previous post of this series.

Cut: The GEO Group (GEO) 

Unfortunately, The GEO Group (GEO) announced that it would be cutting its dividend for the second time in the past few months. GEO further reduced its quarterly dividend from $0.34/share to $0.25/share in response to the impact of COVID-19 on its business and to preserve capital for debt repayment in the years ahead.

While I never like to see dividend cuts, I will continue to hold my shares of GEO at this time because I agree with the decision to focus on debt repayment.

Across my 16 shares of GEO, this reduced my net annual forward dividends by $5.76.

Expected Dividend Announcements for February 2021

Expected Increase #1: PPL Corp (PPL)

Starting with PPL Corp (PPL), I am expecting that the company will announce a dividend increase similar to last year's, which would be a 0.6% increase in the quarterly dividend from $0.4150/share to $0.4175/share.

Across my 8 shares of PPL, this dividend announcement would result in a $0.08 increase in my net annual forward dividends.

Expected Increase #2: Genuine Parts Company (GPC)

Moving to the Dividend King with the longest dividend increase streak in my portfolio, I am expecting Genuine Parts Company (GPC) to extend its dividend increase streak to 65 consecutive years next in February. 

While GPC is a Dividend King and it boasts a stout 6.8% annual dividend growth rate over the past 10 years, I am expecting a dividend increase in line with last year's as the company looks to recover from the the impact of COVID-19.

As a result, I am forecasting a 3.8% increase in GPCs quarterly dividend from $0.79/share to $0.82/share.

If my prediction proves to be correct, my net annual forward dividends would advance by $0.72 across my 6 shares of GPC.

Expected Increase #3: Prudential Financial (PRU)

Given that Prudential Financial's (PRU) earnings are expected to fully recover in FY 2021 per Yahoo Finance estimates, I am forecasting that PRU will announce a dividend increase a bit less than last year for the sake of conservatism.

Therefore, I am expecting that PRU will announce a 6.4% increase in its quarterly dividend from $1.10/share to $1.17/share. 

Across my 9 shares of PRU, this dividend announcement would boost my net annual forward dividends by $2.52.

Expected Increase #4: Home Depot (HD)

Another strong dividend increase that I'm expecting is from none other than Home Depot (HD).

While I don't anticipate HD to deliver a dividend increase near its 5 or 10 year CAGR of ~20% this February, I do believe that HD's strong performance in 2020 and promising outlook for 2021 will buoy the stock to deliver a solid 10% dividend increase in its quarterly dividend from $1.50/share to $1.65/share.

If my prediction proves to be correct, my net annual forward dividends would advance by $1.20 across my 2 shares of HD.

Expected Increase #5: Digital Realty Trust (DLR)

Since Digital Realty Trust (DLR) has held up relatively well in 2020, I am expecting a dividend increase similar to the one last year.

As such, I am predicting a 3.4% increase in DLR's quarterly dividend from $1.16/share to $1.20/share.

Across my 3 shares of DLR, this dividend announcement would increase my net annual forward dividends by $0.48.

Expected Increase #6: Albemarle (ALB)

I'm expecting a mid-single digit dividend increase from the somewhat recently minted Dividend Aristocrat, Albemarle (ALB).

I am anticipating that ALB will announce a 5.2% increase in its quarterly dividend from $0.385/share to $0.405/share.

Should my prediction prove to be correct, my net annual forward dividends would be boosted by $0.40 across my 5 shares of ALB. 

Expected Increase #7: United Parcel Service (UPS)

Another business that has fared well in 2020 and is positioned even better this year with ~10% earnings growth forecasts is United Parcel Service (UPS), which is why I am forecasting a 6.9% increase in UPS's quarterly dividend from $1.01/share to $1.08/share.

Across my 4 shares of UPS, my net annual forward dividends would advance by $1.12 as a result of this dividend announcement.

Expected Increase #8: Cisco (CSCO)

Cisco (CSCO) held up relatively well in 2020, but Yahoo Finance is expecting CSCO to fare even better in 2021 with 6% earnings growth forecasted at this time.

In light of this earnings forecast, I am expecting a 5.6% increase in CSCO's quarterly dividend from $0.36/share to $0.38/share.

If my prediction proves to be correct, my net annual forward dividends would increase by $0.88 across my 11 shares.

Concluding Thoughts:

While I didn't receive the dividend increase from O in January like I was expecting, I was fortunate enough to receive an increase from EPD and a reinstatement from SKT, which was only partially offset by another cut by GEO.

These dividend announcements added $2.71 to my net annual forward dividends, which would require a $67.75 investment at a 4% yield to replicate.

I'm very excited to kick off the next few months of dividend increases with 8 expected increases in February, which would add $7.40 if my forecasts play out.

This would require a sizable $185.00 investment at a 4% yield to duplicate, which would be the largest impact of dividend increases on my portfolio since I began investing in September 2017!

Discussion:

How was your January in terms of dividend announcements?

Did you experience any dividend reinstatements in your portfolio as I did with SKT?

As always, thank you for reading and I look forward to your comments in the comment section below!

Tuesday, January 12, 2021

December 2020 Dividend Income

It's hard to believe that as I'm writing this blog post, the first full week of the year is already in the books.

With that said, as I alluded to in my Review of 2020 Financial/Personal Goals post last week, I'll turn my attention to the dividend income that I received in December 2020.





Analysis:

During the month of December 2020, I received $165.60 in net dividends against the $139.46 in net dividends that were received in September 2020, which represents a quarterly growth rate of 18.7% (and adjusting for special dividends in my retirement account, 5.5%).

Furthermore, the $165.60 in net dividends received in December 2020 equates to an 80.7% YoY growth rate compared to the $91.63 in net dividends that were received in December 2019.

Diving deeper into the net dividends that I received in December 2020, I collected $63.56 (net of the $5.00 in Robinhood Gold fees) from 19 companies in my Robinhood portfolio, $11.89 from 6 companies in my Webull portfolio, $89.67 from the Capital Income Builder (CAIBX) holding in my retirement account, and $0.48 from 24 companies in my M1 Finance portfolio.

The additional $26.14 in net dividends received from September 2020 to December 2020 came as a result of the following activity within my portfolios:

Due to CAIBX's dividend schedule, I received $18.50 in special dividends in December 2020 that I didn't receive in September 2020.

As a result of owning more shares of CAIBX, I also received an additional $7.51 in regular dividends.

I also received an extra $1.05 in dividends from my 3 shares of Broadcom (AVGO) as a result of their most recent 10.0% dividend increase.

I received an additional $2.80 from Lockheed Martin (LMT) as a result of my purchase of 1 share of the stock in my Robinhood account, and the stock's 8.3% dividend increase in my Webull account.

My dividends declined $1.25 across my Robinhood and M1 Finance accounts as a result of Dominion Energy's (D) recent dividend cut.

My dividends received from Royal Dutch Shell (RDS.B) increased $0.12 as a result of the most recent 4.1% dividend increase.

I also received an additional $0.01 in dividends from Realty Income (O) due to the most recent 0.2% dividend increase.

My dividends received from PepsiCo (PEP) declined by $2.07 across my Robinhood and M1 Finance accounts due to the timing of PEP's dividend payment.

I received an additional $0.04 in dividends from Visa (V) in my Webull account as a result of V's most recent 6.7% dividend increase.

My net dividends also increased by $2.75 as a result of the reduction in Robinhood interest to $0.00.

My dividends received from Digital Realty Trust (DLR) declined by $3.36 in my Robinhood account due to the timing of DLR's dividend payment.

The $0.04 special dividend that I received from Fastenal (FAST) in my M1 Finance portfolio offset the $0.03 in collective declines from D and PEP that I previously discussed, which helped my dividends to increase by $0.01 in this account.

Concluding Thoughts:

I ended 2020 with a bang, collecting a record $165.60 in net dividends in December.

My net dividends received in 2020 were a record $1,127.05 against $615.30 in net dividends received in 2019, which represents an 83.2% YoY growth rate in net dividends from 2019 to 2020.

Despite a challenging year on the dividend announcement front, steady capital contributions and dividend reinvestment helped me to produce my best year of dividend income yet, which positions me for an even better year of income in 2021.

Discussion:

How was your dividend income in December 2020?

Did 2020 represent your best year of net dividends to date in your investing career as well?

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

Tuesday, January 5, 2021

Review of 2020 Financial/Personal Goals

 As I'm writing this blog post, the first day of 2021 is upon us. Now that 2021 is finally here and I have already outlined my goals for this year, I will be looking back at whether I was able to accomplish my financial and personal goals for 2020!

2020 Financial Goals:

1. Collect $1,200+ in net dividends - Fail - $1,127.05

I fell just short of collecting $1,200 in net dividends during 2020, as I collected $1,127.05 in dividends during the year (when the dividends received in December 2020 are included, which will be my blog post for next week).

When I consider that this represents 83.2% YoY growth compared to the $615.30 in net dividends received in 2019, I am pleased with what I managed to accomplish in 2020 despite coming up short of my $1,200 goal.

2. End the year with net annual forward dividends of $1,450+ - Fail - $1,363.01

Another goal I came up a bit short on was ending the year with $1,450+ in net annual forward dividends, with my portfolio ending 2020 at $1,363.01 in net annual forward dividends.

Given that I have been especially dedicated to investing in the highest quality dividend stocks with an average weighted yield of 3.0-4.5% in the last quarter of 2020, I am perfectly fine ending the year short of my goal as I believe that I invested as much as I possibly could without increasing my risk of dividend cuts that would set me back later.

If I learned anything from 2020, it was that dividend safety is paramount while yield is secondary.

3. Amass $35,000 in investments - Fail - $32,900

I fell about $2,000 short of amassing $35,000 in investments in 2020, which is fine considering that I believe I am positioned well to surpass $55,000 in investments during 2020, provided financial markets are fairly flat to the downside or upside.

4. End the year with a net worth of at least $45,000 - Fail - $44,126

I ended 2020 with a net worth about $900 off of my goal of $45,000, which is once again fine IMO given that I will only need to invest about $20k to reach my goal in 2021 of a net worth of at least $65k.

2020 Personal Goals:

1. Publish at least 1 blog post each week - Pass - 52 posts for 2020

Starting with my first personal goal in 2020, I managed to achieve my goal of posting at least 1 blog post each week as I published 52 blog posts during the year.

I believe that posting 1 blog post each week strikes a nice balance between work and play, so I will once again strive to meet this goal in 2021 as I noted in my 2021 Financial/Personal Goals post. 

2. Publish at least 1 article a week on Seeking Alpha - Pass - 55 articles for 2020

Another goal that I managed to achieve in 2020 was to publish at least 1 article a week on Seeking Alpha, having published 55 articles during the year.

I will run this goal back again in 2021 since I felt as though it was a goal that wasn't overwhelming, but it was also a goal that I had to work at to achieve.

3. Surpass 5,500 followers on Seeking Alpha in 2020 - Fail - Ended 2020 with 5,049 followers

I fell short of my final personal goal in 2020, which was to end the year with 5,500 followers on Seeking Alpha.

Even so, I managed to add more than 2,000 followers in 2020, which is humbling and leads me to believe that I am in a great position to come close to my goal of 8,000 in 2021.

Concluding Thoughts:

While I only accomplished 2 of my 7 financial/personal goals in 2020, I arguably came within shouting distance of the other 5 goals.

I believe that my accomplishments in 2020 set a great foundation for the year ahead and I'm looking forward to pushing myself to come as close as possible to reaching my goals for 2021 as I continue my journey to financial independence.

Discussion:

How did you fare in achieving your goals for 2020?

As always, thanks for reading and I look forward to your comments in the comment section below!

Tuesday, December 29, 2020

December 2020 Dividend Stock Purchases

 As I'm writing this blog post, Christmas Day is in the rearview mirror and New Year's Day is coming up in just a few more days. 

With that in mind, I'll be discussing my dividend stock purchases that were executed during December 2020. 




Before I start off with the activity in my retirement account, I would like to preface this post with an explanation of why my buying activity for the month overall was over $3,000.

As some may be aware, Robinhood recently announced that it would be lowering its margin rates from 5.0% to 2.5%.

I saw an opportunity to add just over $1,800 in margin to my account (aside from the first $1,000 in interest free margin) to buy high quality dividend stocks with yields primarily in the 3-4% range since a margin call would require a 75%+ drop in my Robinhood portfolio and I 1) view that as a highly unlikely scenario and 2) have virtually no debt aside from my margin debt.

Without further ado, I deployed $341.67 in gross capital when including my 7% contribution to my Capital Income Builder (CAIBX) position within my retirement account, my employer's 3% contribution, and dividends/special dividends received during December.

When factoring in sales charges and the $10 annual fee that CAIBX charged in December for the upcoming year, I deployed $320.32 in net capital during December 2020.

This allowed me to build my CAIBX position from 140.581 shares heading into December to 145.695 heading into January 2021, which added $10.94 to my net annual forward dividends, assuming an annualized dividend/share of $2.14.

My capital deployment into CAIBX during the month equates to an average weighted net yield of 3.42%.

Moving to the activity within my Robinhood portfolio, I started the month off by initiating a 10 share position in National Retail Properties (NNN) at a total cost of $397.00 (which I essentially provided my explanation for in an article here on Seeking Alpha a couple months before I initiated my position).

My 10 share purchase of NNN added $20.80 in net annual forward dividends to my portfolio, which equates to an average weighted yield of 5.24%.

I also purchased 5 shares of WEC Energy Group (WEC) during the month at a total cost of $457.41, which when weighted against the $13.55 in net annual forward dividends added equates to an average weighted yield of 2.96% (for more insight into why I went on to initiate a position in WEC, I would refer interested readers to my article last month on the stock).

I added 3 shares to my position in Pfizer (PFE) (due to the fact that I believe in the company's R&D pipeline and commercial drug/vaccine portfolio at this time and the company appears to be trading at a slight discount to fair value), which cost $112.06, working out to an average weighted yield of 4.18% when considering the $4.68 in net annual forward dividends that were added with this purchase.

I also increased my position in CVS Health (CVS) by 1 share at a cost of $67.53 due to the stock's continued strong operating fundamentals (more on that in my upcoming SA article), which equates to a yield of 2.96% factoring in the $2.00 in net annual forward dividends that were added as a result of the purchase.

I added 2 shares of Realty Income (O) to my portfolio at a total cost of $121.92, which works out to a yield of 4.62% when considering the $5.628 in net annual forward dividends that were added with this purchase.

I also increased my position in PepsiCo (PEP) by 1 share at a cost of $144.76, which works out to a yield of 2.83% factoring in the $4.09 in net annual forward dividends that were added as a result of the purchase.

Another high-quality dividend payer that I added 1 share to my position in was Johnson & Johnson (JNJ) at a cost of $153.15, which equates to a 2.64% yield when considering the $4.04 in net annual forward dividends that were added due to this purchase.

I also added 2 shares to my position in GlaxoSmithKline (GSK) at a total cost of $72.80, which works out to a 5.49% yield factoring in the $4.00 in net annual forward dividends that were added with this purchase.

Next, I increased my position in British American Tobacco (BTI) by 2 shares at a total cost of $73.45, which equates to a 7.35% yield when considering the $5.40 in net annual forward dividends that were added as a result of this purchase.

I also increased my position by 1 share in Lockheed Martin (LMT) at a total cost of $351.26, which works out to a 2.96% yield factoring in the $10.40 in net annual forward dividends that were added due to this purchase (for further insight into why I went on to add to my position in LMT, I would refer interested readers to my October 2020 article on the stock).

I added 2 shares to my position in Cisco (CSCO) at a total cost of $89.48, which equates to a 3.22% yield when considering the $2.88 in net annual forward dividends that were added to my portfolio as a result of this purchase.

I also increased my position in Genuine Parts Company (GPC) by 1 share at a total cost of $100.27, which works out to a 3.15% yield when factoring in the $3.16 in net annual forwards that were added due to this purchase (for more of an explanation into why I added to my position in GPC, I would refer interested readers to my article this month on the stock).

I added 1 share to my position in W.P. Carey (WPC) at a total cost of $71.16, which equates to a 5.88% yield when considering the $4.184 in net annual forward dividends that were added as a result of this purchase.

Finally, I initiated an 11 share position in Aflac (AFL) at a total cost of $481.80, which works out to a 3.01% yield when factoring in the $14.52 in net annual forward dividends that were added due to this purchase.

Concluding Thoughts:

Overall, I added $110.27 in net annual forward dividends on the $3,014.37 in capital that was deployed during December, which works out to a 3.66% average weighted yield.

When factoring in the $46.76 in additional Robinhood Gold costs due to the aforementioned ~$1,870 in margin, a $19.20 downward adjustment to my Simon Property Group (SPG) dividends (there was a glitch between when I got my new smartphone and when I wrote my previous post of this series, which didn't account for SPG's dividend cut months ago in my spreadsheet that is synced to my blog's portfolio), and the $7.16 in dividend increases to my portfolio during December, my annual net forward dividends heading into 2021 are at an all-time high of just over $1,363.

Discussion:

How was your capital deployment during the month of December 2020?

Did you open any new positions as I did with NNN and WEC (and from a whole share standpoint with AFL, as I only owned a fraction of a share in my M1 Finance account prior to the purchase of 11 shares of AFL this month)?

I appreciate your readership and look forward to creating content in 2021! Please feel free to leave your comments in the comment section below.