March 2020 Dividend Income

As I'm writing this post, the COVID-19 pandemic reached an unfortunate milestone as a virus: 1+ million infected and a heartbreaking 66,000 deaths worldwide.

In my state of Wisconsin, there are 2,112 confirmed cases and 56 deaths reported as of April 5.

Aside from writing weekly blog posts and articles, it's difficult to find an aspect of my life that remains the same in the midst of this pandemic.

While some of the outcomes have been beneficial in my case, such as being able to work from home and saving time and money in the process, other outcomes such as no Bucks basketball have been difficult to endure.

In the meantime, I am just content with the fact that none of my immediate family members have exhibited symptoms of COVID-19 to date and we are doing everything we can to get through this outbreak as millions across the world are doing as well.

With that aside, let's delve into one other factor that has remained relatively constant in my life, which is my dividend income for the month of March 2020.

During the month of March, I collected $90.31 in dividends net of the $14.95 in Robinhood Gold membership fees and interest on the margin (I'll be going over my recent decision to use a bit of margin in a couple weeks).

Adjusting for the $7.14 in special dividends received in December 2019 from my CAIBX holding when I collected $91.63 in total dividends and the PepsiCo (PEP) dividend, this represents a quarterly growth rate of 4.6%.

Against the $57.53 in dividends that I collected in March 2019 and factoring out the PEP dividend, this represents a YOY growth rate of 53.7%!

Breaking things down a bit more, I collected $48.36 in dividends from my CAIBX retirement holding, $43.21 in net dividends from the 16 companies in my Robinhood portfolio that paid dividends during the month, $13.18 in dividends from the 6 companies in my Webull portfolio that paid dividends during the month, and $0.51 in dividends from the 25 companies in my M1 Finance portfolio that paid dividends during the month.

The additional $5.82 in dividends collected during the month was as a result of the following developments in the portfolio:

Starting with the retirement account, I received an additional $6.35 in dividends from my Capital Income Builder (CAIBX) holding as a result of the continued retirement contributions from myself and my employer.

I received my first dividend from Broadcom (AVGO) since I initiated a position back in December 2019, which boosted my dividend income by $6.50 across my Webull portfolio and Robinhood portfolios.

The other activity in my Webull account was the dividend increase from Prudential Financial (PRU) in February, which added $0.30 to my dividend income.

The timing of the PEP dividend boosted my dividend income by $1.91.

The purchase of shares in Digital Realty Trust (DLR) last December added another $3.36 to my dividend income.

My purchase of shares in L3 Harris Technologies (LHX) in November 2019 and the dividend increase in February resulted in a $1.70 addition to my dividend income.

British Petroleum's (BP) dividend increase announced earlier this year increased my dividend income by $0.06.

Sticking with the trend of dividend increases, Home Depot's (HD) dividend increase announced in February generated an extra $0.14 in dividend income during the month.

Yet another dividend increase for me was the increase announced by Dominion Energy (D) last December, which boosted my dividend income by $0.09.

Realty Income's (O) dividend increase announced in January added $0.02 to my dividend income during the month.

Amgen's (AMGN) dividend increase announced in December boosted my dividend income by $0.15.

Rounding out dividend increases that boosted my dividend income during the month is the increase from Pfizer (PFE), which added $0.16 to my dividend income.

Robinhood Gold fees and interest on margin resulted in a $14.95 expense for the portfolio during the month of March.

The final bit of activity came in my M1 Finance portfolio. Aside from the timing of the PEP dividend which added $0.02 to dividend income, the notable activity was an increase in the dividends that I collected from my position in PRU, which also boosted my dividend income by $0.01.

Concluding Thoughts:

The portfolio continues to slowly advance and given the timing of some of my purchases where I used margin and my continued retirement contributions, I expect to surpass $100 in net dividend income in June.

As I conclude paying off my car and federal tax liabilities in the weeks ahead, I plan to use all of my disposable income to either pay off my margin or opportunistically add to positions.

Discussion:

How was your March in terms of dividend income?

Did you have any new dividend payers as I did with DLR, AVGO, and LHX?

As always, thanks for your readership and I look forward to reading the comments that you are free to leave in the comment section below.

Inept Government - Yet Another Reason To Be A Dividend Growth Investor

In the midst of this COVID-19 pandemic as the world approaches 1 million confirmed cases, I find myself with a bit of extra time on my hands because as I mentioned in my previous blog post, I am now working from home and saving several hours a week on commuting/getting ready for work (not to mention financially on transportation costs).

With the NBA season postponed for the foreseeable future and very little NBA news to follow, especially pertaining to the Milwaukee Bucks, I actually find myself with an extra 7-8 hours a week including the extra sleep that I have been getting.

While I have been using most of that extra time to unwind and watch TV programming, I can't help but find myself thinking about the future.

One thing in particular that has been on my mind for quite a while and most recently, is the fact that the Social Security trust funds that fund Social Security retirement benefits in conjunction with FICA tax contributions are projected to be fully depleted by 2035, according to the 2019 Social Security Trustees Report.

With this in mind, it raises concerns about the future of programs that tens of millions of Americans depend on, leading me to the following statement.

The U.S. Government Is Beyond Dysfunctional

Without being too political (as I find politics to be a distraction from our government's inefficiency and incompetence to pit us against each other), you don't have to even follow the news to know just how unreliable and dysfunctional our government is perceived to be at protecting our best interests as citizens.

Whether you consult with others that you personally know or reference the study conducted by Pew Research Center that found only 17% of Americans said that they could trust the government to do what is right, it's abundantly clear that the vast majority of Americans don't trust the government, and rightfully so.

Rather than actually addressing the fact that our programs for retirees are at risk of becoming unsustainable in the not so distant future without further action, the Washington elite are playing politics and focusing on issues that are politically expedient, "kicking the Social Security can down the road" rather than doing the responsible thing and being pragmatic to secure the future of these programs for us and our posterity.

While I do believe that politicians will eventually address this issue with some combination of FICA tax hikes or increases in the retirement age to address the improved life expectancy rates since the implementation of Social Security, and they will face no choice but to do so given the popularity of these programs, I believe it is better to be safe than sorry and to take control of your financial future.

You Must Trust Yourself To Secure Your Financial Future

While I understand that many in the American public are unsure of how to take control of their financial future and often lack the knowledge of personal finance to do so (let's face it, personal finance can be boring for most people), it is essential for everyone to do so because nobody else is capable of handling your financial future as well as you are capable of once you develop an understanding of budgeting and investing.

Dividend growth investing has proven to be a highly effective strategy in conjunction with purposeful budgeting to secure one's financial future and eventually achieve financial independence to enjoy one's retirement without worry of running out of money or relying on the government or an employer for retirement benefits.

We only need to look to the likes of Jason Fieber of MrFreeat33 to realize the true potential of living below your means and investing in high-quality dividend growth stocks.

If you haven't read Jason's story, I would encourage you to do so as it is incredibly inspiring.

Jason was one of the very first individuals in the online community that shaped my thoughts and led me to eventually select the dividend growth strategy when I began investing in September 2017.

Jason's story proves that it is possible for everyday folks like you and I to achieve financial independence with sensible budgeting, an effective approach to investing such as the dividend growth strategy, and patience.

For newer readers of the blog or readers that would like a refresher on the reasons that led me to become a dividend growth investor, I would refer them to this post.

Concluding Thoughts:

Regardless of your political beliefs and whether you believe the government will come through and secure the continuity of Social Security retirement benefits, the moral of the story is that you shouldn't be depending upon others to secure your financial future, especially out of touch bureaucrats in Washington.

There are so many personal finance bloggers out there that have reached financial independence and serve as a model for us to follow in one way or another such as Jason Fieber, so it is important for those of us in the community to spread the message to those that maybe aren't up to speed on the need to secure their financial future independent of the government, employer pensions, etcetera.

Discussion:

What are your thoughts on the situation regarding the sustainability of Social Security retirement benefits?

Do you believe that you will be able to personally recover all of your contributions into FICA taxes once you reach the age of being able to collect your benefits?

Am I blowing the need to secure one's financial future out of proportion?

As always, I appreciate your readership and welcome any comments that you are free to leave in the comment section below.

Expected Dividend Increases for April 2020

As I'm writing this post, I just completed my first day of working remotely due to the fact that Wisconsin Governor Tony Evers announced that the state would be enforcing a stay-at-home order. 

While the downside to working from home is that my setup isn't quite as efficient as my setup at work (only one screen at home versus two at work), I do enjoy being able to sleep an extra 30 minutes each weekday over the next month. It's also great because I will be able to save roughly $40 in transportation costs as a result of working from home and I'm able to go for walks in my parent's 48 acre backyard on my lunch break.

With that in mind, I'll be getting to the intent of this post, which is to provide a summary of the dividend increases that I received in March and a preview of the increases that I am expecting in April. 

Increase #1: WP Carey (WPC)

WP Carey announced a 0.2% increase in its quarterly dividend from $1.038/share previously to the new dividend of $1.040/share, which was in line with my expectations.

Across the 3 shares of WPC that I owned at the time of the announcement of the dividend increase, my annual forward dividend income increased by $.024.

Increase #2: Realty Income (O)

Sticking with the theme of consistent REITs in my portfolio that I touched upon in the last post of this series, Realty Income announced a 0.2% increase in its monthly dividend from $0.2325/share previously to the new dividend of $0.2330/share.

Across the 4 shares of O that I owned at the time of the dividend announcement, my annual forward dividend income was boosted by $0.024.

Increase #3: General Dynamics (GD)

General Dynamics announced a 7.8% increase in its quarterly dividend, from $1.02/share to $1.10/share. This was slightly below what I was expecting, although I completely understand why GD elected to be on the conservative side in light of the COVID-19 developments over the past few weeks.

Across the 3 shares of GD that I owned at the time of the dividend announcement, my annual forward dividend income increased by $0.96.

Dividend Freeze: Williams Sonoma (WSM)

The surprise dividend announcement was undoubtedly that of Williams Sonoma's decision to keep its quarterly dividend in line with the previous at $0.48/share.

I label this as a surprise not because I disagree with the move to keep the dividend in line (it's the right move in the wake of COVID-19's multi-faceted impact on our lives), but because at the time that I wrote my previous post, I didn't believe that the impact of the virus would be as profound as it has proven itself to be.

Bonus Dividend Increase: L3Harris Technologies (LHX)

It sure is nice to receive a dividend increase earlier than you were expecting (way back at the end of February and I was expecting it this summer), which is exactly what happened when L3Harris Technologies announced a 13.3% increase in its quarterly dividend, from $0.75/share to $0.85/share. 

Across the 2 shares of LHX that I own, this announcement added $0.80 to my annual forward dividend income.

Expected Dividend Increases in April

Expected Dividend Increase #1: Johnson & Johnson (JNJ)

As a resilient Dividend King, I believe Johnson & Johnson will continue to deliver dividend increases to its shareholders by announcing a 5.3% increase in its quarterly dividend from $0.95/share to $1.00/share. 

Across the 2 shares of JNJ, this would result in a $0.40 boost to my annual forward dividend income.

Expected Dividend Increase #2: Southern Company (SO)

Given that Southern Company operates in an industry that benefits from the rate cut that was recently announced, I expect these benefits to offset the headwinds of more mindful consumption of energy and potential utility rate cuts. 

It's for these reasons that I am anticipating a 3.2% increase in SO's quarterly dividend, taking the dividend from $0.62/share to $0.64/share. 

Across the 5 shares of SO that I own at this time, this announcement would add $0.40 to my annual forward dividend income.

Expected Dividend Increase #3: International Business Machines (IBM)

I'm expecting a slight reduction in International Business Machines' dividend growth this year in light of the COVID-19 developments, so I am forecasting a 2.5% increase in the quarterly dividend, from $1.62/share to $1.66/share.

Across my 4 shares, this announcement would boost my annual forward dividend income by $0.64.

Expected Dividend Freeze: Exxon Mobil (XOM)

Although Exxon Mobil has raised its dividend for 37 consecutive years, I would be very surprised to see XOM increase its dividend this spring given the sudden collapse in crude prices. I would expect XOM to once again announce a $0.87/share quarterly dividend for the next couple of announcements and if crude stabilizes in the month aheads, I could see a dividend increase in October rather than April.

Expected Dividend Freeze: ONEOK (OKE)

As a midstream player, I wouldn't be surprised if ONEOK followed Enterprise Products Partners' (EPD) recent announcement keeping their distribution in line with the previous $0.935/share. In these uncertain times with heightened counter-party risk, I would actually be pleased if OKE announced a temporary dividend freeze until energy prices find support.

Concluding Thoughts:

I was able to add $1.808 to my annual forward dividends with the 3 dividend increases that were announced in March and the LHX announcement that I missed until a couple days ago, which would take $45.20 of fresh capital invested at a 4% yield to replicate.

This April will in all likelihood not come close to the $2.34 in dividend increases that I received in April 2019, but given the circumstances, I would be pleased with any progression in my annual forward dividend income.

Discussion:

Are you expecting the energy sector to announce dividend freezes until the headwinds in the sector ease via a potential deal between Saudi Arabia and Russia, and as our daily lives around the world gradually return to normal? 

How was your March in terms of dividend increases?

As always, I appreciate your readership and welcome any comments that you are free to leave in the comment section below.

A Dividend Milestone Has Been Reached!

As I write this post, Covid-19 has begun to significantly interfere with the way of life of virtually every society across the globe.

Here in the US, most schools are closing down for at least the next couple weeks, many businesses are encouraging or coercing their employees into working remotely from the safety of their home, and sporting events across the country are being postponed.

One of the more disappointing developments aside from the death and disease itself, was the fact that the rest of the NBA season may be in jeopardy if the virus isn't contained in the weeks ahead.

I am still hopeful the NBA season will resume around my birthday on April 15, but so many questions come to mind.

If the season resumes around that time, will all but the last few games not be played and the playoffs will end just a bit later than mid-June?

Will the NBA skip straight into the playoffs and finish at the same time as usual?

One of the few bright spots of the Covid-19 outbreak was that the 3 major US indices entered a bear market this past week.

This created many buying opportunities over the past few weeks that I was quick to take advantage of, which also allowed me to reach a noteworthy and long anticipated dividend income milestone.

As a result of the capital that I have deployed thus far in March and dividend increases during the month, I surpassed $1,000 in annual forward dividends!

I just wanted to take a few moments to reiterate what convinced me to become a dividend investor.

Time And Commitment to the DGI Strategy Pays Off

While it's true that the DGI strategy isn't going to make anyone a millionaire as fast as an absurdly successful tech start up like Facebook, the DGI strategy is much more doable for us average Joes and Janes that are looking for a consistent and replicable way to build significant wealth and cash flow.

Take for instance that when I received my first dividend in October 2019, my portfolio generated $6.47 of dividends during the month.

Less than two and a half years later in February 2020, I generated $86.62 in dividends.

What's most impressive about the tremendous growth in dividend income in such a short period of time is that until last August, I was typically deploying less than $1,000 a month in capital as I was paying my way through undergrad.

If this much can be achieved while paying one's way through college the first two years of the investing journey, imagine what can be done in 5 years or 10 years!

DGI Is Relatively Easy to Stick With

Unlike a growth investing strategy that relies on capital gains and the fickleness of the equity markets, DGI produces consistent cash flow and doesn't require an investor to sell off their portfolio at inopportune times during a bear market such as the ones we find ourselves in, in order to fund their lifestyle during retirement.

The $1,150+ in dividends that I have received since I began investing has made it easier to withstand the numerous corrections since I began investing and the current bear market.

Despite the panic in the financial markets, dividends have allowed me to think rationally and from the standpoint of an owner in dozens of high quality businesses, which is why I have added quite a bit to my portfolio in the past two weeks.

Concluding Thoughts:

As is the case with almost every DG portfolio, my portfolio was built gradually, which is a great testament to the effectiveness of a disciplined and committed DGI strategy.

The continued cash flow from my 72 stock holdings and 1 mutual fund has allowed me to endure numerous corrections and my first bear market thus far as an investor.

The dividend portfolio is continuing to make significant progress and is $988.27 away from the next goal, which is $2,000 in annual forward dividends.

I expect to reach the next milestone sometime next spring.

Discussion:

Have you reached any dividend milestones as of late?

Have you been able to take advantage of the current bear market?

As always, I appreciate your readership and welcome any comments that you are free to leave in the comment section below.