Tuesday, January 18, 2022

December 2021 Dividend Stock Purchases

As I'm writing this blog post, it's hard to believe that we're nearly two weeks into 2022. The temperatures remain frigid, with the lows bottoming out in the double-digits Fahrenheit below zero in Central Wisconsin.

With that aside, let's look at my dividend stock purchases that I completed to close out the last month of 2021.





Starting with my retirement account, the net dividends that I received from my Capital Income Builder (CAIBX) mutual fund holding within my retirement account were reinvested. As the quarters progress, this will be the only way that my share count of CAIBX continues to grow since I left the job that sponsored my retirement plan six months ago to write full-time. 

When also factoring in the $10 annual fee for 2022 that was deducted from my CAIBX share balance last month, my share balance grew 2.444 shares from 176.015 to 178.459. Assuming net annual dividends of $2.13 per share, this led my net annual forward dividends $5.21 higher. And based on the $166.90 that was reinvested after the $10 annual fee at an average cost of $68.32 per share, this works out to a 3.12% net dividend yield.

Moving to my Robinhood account, I started off the month by purchasing 13 shares of Alliant Energy (LNT) at an average cost of $58.85 per share. My rationale for this purchase was outlined in my December 2021 Dividend Stock Watch List post a while back, which included LNT's dividend growth track record, strong balance sheet, and reasonable valuation. Given the $20.93 in net annual forward dividends that were added due to my purchase, my net dividend yield was 2.74% on this investment. And with a 6.2% dividend raise that will officially be announced this month, my yield on cost will go moderately higher in the near future.

I also added another share to my position in Crown Castle International (CCI) at a cost of $193.20. As I discussed in a Motley Fool article from a couple of months ago, I believe CCI is a stock with secular growth catalysts and strong dividend growth potential at a fair valuation. This dividend stock purchase boosted my net annual forward dividends by $5.88, which equates to a net yield of 3.04%.

Another stock that I added to in December was WEC Energy Group (WEC). I purchased another share of the stock at a share price of $93.75. This was based on the investment thesis that the essential nature of WEC's services and its low dividend payout ratio will make it a dividend stock that will pay investors for life. Based on the new annualized dividend per share of $2.91, this worked out to a net yield of 3.10%.

I also purchased three shares of Hershey (HSY) during the month at an average cost of $189.83 a share, which was my first whole share purchase of the stock. This decision can be explained by HSY's dividend growth track record, solid financial footing, and rational valuation, which I also noted in my December 2021 Dividend Stock Watch List post. Against the $10.81 in net annual forward dividends that were added to my portfolio, this translates into a 1.90% dividend yield.

Another position that I added to in December was the Dividend King Leggett & Platt (LEG). I upped my position in LEG by buying four shares of the stock at an average cost of $39.98 per share. In terms of quality, you can't get much better than LEG. And at a forward P/E ratio of barely 13 ($3.03 average 2022 EPS estimate), this was too much of a bargain to pass up. Considering the $6.72 boost in my net annual forward dividends, this works out to a net yield of 4.20%.

The final dividend stock purchase that I made within my Robinhood portfolio was the nutrition and weight loss company Medifast (MED). I opened a three share position in the stock at an average cost of $204.50 per share. At my purchase price, MED was trading at a forward P/E ratio of just over 12. Stacked against analysts' annual earnings growth estimate of 20% over the next five years, this was a classic growth at a reasonable price stock to buy. And what makes the stock even better is that it has no long-term debt. This should allow MED to build on what has been a short, yet impressive dividend growth track record. Given that my purchase of MED added $17.04 in net annual forward dividends, my net yield was 2.78%.

The first and only dividend stock that I bought in my Webull account was one unit of Enterprise Products Partners (EPD) at a cost of $21.58. A look at my portfolio reveals that I am a huge believer in EPD, which is my largest investment holding in terms of the annual passive income that it provides to me. The short and sweet explanation is that EPD is arguably the best business in its industry. What more proof does one need than the company's 20+ consecutive years of distribution increases? The $1.80 in net annual forward distributions that this purchase added to my portfolio worked out to an 8.34% net yield.

Concluding Thoughts:

During the month of December, I put $2,583.33 in capital to work when including reinvested dividends. This investment activity is what allowed me to grow my net annual forward dividends by $71.30 during the month. This equates to an average weighted dividend yield of 2.76%, which should bode very well for the future dividend growth of my portfolio. 

When also considering the $17.98 in dividend increases that I received during the month, my net annual forward dividends advanced from more than $2,205 entering the month to $2,295 heading into January 2022.

Discussion:

How was your December 2021 in terms of capital deployment?

Did you open any positions in your portfolio as I did with LNT, HSY, and MED?

As usual, thanks for reading and feel free to share your thoughts in the comment section!

Tuesday, January 11, 2022

December 2021 Dividend Income

As I'm writing this blog post, we're a couple of days into 2022. And based on the wind chill dipping down into the single-digits below 0 degrees Fahrenheit, the time of the year is certainly beginning to show here in Central Wisconsin.

With December 2021 in the books, it's now time to look at how much my portfolio generated for me in net dividends during the month. As I alluded to in my previous blog post, I received a record in net dividends (including the $10 annual fee for my Capital Income Builder mutual fund).

But just how much of a record was December 2021 for the portfolio? Let's dive in to find out.







Analysis:

During the month of December 2021, I collected a record $353.38 in net dividends. Against the previous record of $229.54 set in September 2021, this represents a 54% quarterly growth rate.

And on a year-over-year basis, my net dividends received in December 2021 skyrocketed 113.4% over December 2020's $165.60 in net dividends.

More specifically, I collected $172.48 in net dividends from 36 stocks within my Robinhood portfolio. I also received $166.90 in net dividends from my Capital Income Builder (CAIBX) mutual fund in the retirement account sponsored by my previous employer. In addition, I collected $13.55 in net dividends within my Webull portfolio from 6 stocks. Finally, I received $0.45 in net dividends in my M1 Finance account from 22 stocks.

The $123.84 increase in net dividends collected from September 2021 to December 2021 was due to the following activity within my portfolio:

Beginning in my retirement account, my net dividends received from CAIBX in December were $96.90 higher than in September because of both a higher share count ($0.41 of the difference) and the special dividend ($96.49 of the boost).

My net dividends collected from Broadcom (AVGO) were boosted by $1.50 within my Robinhood and Webull portfolios, which was the result of the recent dividend hike in the quarterly dividend from the stock.

I received another $0.90 in net dividends from Simon Property Group (SPG) in my Robinhood account, which was due to the payout increase in the quarterly dividend to $1.65 per share. 

My net dividends collected from Crown Castle International (CCI) were $5.88 higher within my Robinhood portfolio, which was the result of my purchase of the stock made in November and the first dividend I received from the stock.

I received another $2.92 in net dividends from Main Street Capital (MAIN) in my Robinhood account. This was a combination of a higher share count from my additions in November, an increase in the regular monthly dividend, and the stock's $0.10 per share supplemental dividend.

My net dividends collected from Lockheed Martin (LMT) were boosted by $3.40 within my Webull and Robinhood portfolios, which was both the dividend raise announced in September and an extra share that I purchased in September.

I received $3.57 in net dividends from Raytheon Technologies (RTX) in my Robinhood account, which was the first dividend I received since purchasing the stock last November. 

My net dividends collected from McDonald's (MCD) were $4.14 within my Robinhood portfolio, which was the first time I received a payment from the stock since buying it in October.

I also received an extra $0.14 from Realty Income (O) in my Robinhood portfolio, which was due to the increase in the monthly payout back in November.

My net dividends collected from KeyCorp (KEY) were boosted by $0.22 within my Robinhood account, which was the result of the dividend hike announced in November.

I received another $1.92 in net dividends from American Electric Power (AEP) in my Robinhood portfolio, which was due to the dividend increase announced in October and my purchase of two more shares in October.

My net dividends collected from Exxon Mobil (XOM) increased $0.11 within my Robinhood account, which was also the result of the dividend increase in October.

I also received an extra $0.18 in net dividends from Microsoft (MSFT) in my Robinhood portfolio, which was due to the payout hike in September.

My net dividends collected from Amgen (AMGN) were boosted by $1.76 within my Robinhood account, which was the result of my purchase of an additional share in August.

I received another $1.06 in net dividends from Johnson & Johnson (JNJ) in my Robinhood portfolio, which was due to my purchase of an extra share in November.

My net dividends collected from Visa (V) were boosted by $0.49 within my Robinhood and Webull accounts, which was the result of the dividend hike in September and my purchase of another share in September.

I received an extra $4.35 in net dividends from Cummins (CMI) in my Robinhood portfolio, which was due to opening a position back in October. 

My net dividends collected from J.M. Smucker (SJM) were $0.99 higher within my Robinhood account, which was a result of my share purchase in August.

I received $3.25 less in net dividends from PepsiCo (PEP) in my Robinhood and M1 Finance portfolios, which was due to the timing of the dividend payment.

My net dividends collected from Pinnacle West Capital (PNW) was $0.14 higher within my Robinhood account, which was the result of the recent dividend increase.

I received $3.48 less in net dividends from Digital Realty Trust (DLR) in my Robinhood portfolio, which was due to the timing of the dividend payment.

Concluding Thoughts:

Overall, I'm very pleased with the $1,825.81 in net dividends that my portfolio generated in 2021. I'm looking forward to the next year of deploying fresh capital, reinvesting dividends, and receiving raises from my holdings.

Since I received so much in special dividends in December 2021, I'm expecting a moderate drop-off in net dividends received in March 2022. But at the rate I'm going, I wouldn't be surprised if my portfolio were to surpass $450 in net dividends in December 2022.

Discussion:

How was your December 2021?

Did you receive first-time dividends like I did from CCI, RTX, MCD, and CMI?

I appreciate your readership and welcome your comments in the section below!

Tuesday, January 4, 2022

Review of 2021 Financial/Personal Goals

As I'm writing this blog post, today is the last day of 2021. Other than the temperature being in the low-single-digits Fahrenheit and the several inches of snow cover here in Central Wisconsin, it would be hard to tell that we're just hours away from January 2022. The year went by so very fast and was filled with big decisions like quitting my day job to focus on writing for The Motley Fool and Seeking Alpha.

Since it's the end of the year, that brings me to whether I accomplished my financial and personal goals for the year. Let's dive in!

Image Source: My portfolio

2021 Financial Goals:

1. Collect at least $1,800 in net dividends during the year - Success - $1,825.81

In a bit of a spoiler alert for my December 2021 dividend income, I received a record $353.38 in net dividends/special dividends. I'll save the details behind that figure for my monthly dividend income post, but that brought me to $1,825.81 in net dividends collected during the year. 

In hindsight, my goal to receive at least $1,800 in net dividends for the years was just within reach. This signals that I was on the mark between setting both a reasonable and ambitious goal.

2. End 2021 with at least $2,200 in net annual forward dividends - Success - $2,295.05

I also achieved my second goal to end 2021 with at least $2,200 in net annual forward dividends, which is evidenced by my screenshot above in which my portfolio will produce $2,295.05 in net annual forward dividends as of today heading into 2022. Since I only beat my goal by a few percent, I would argue that this was also a goal that struck a good balance between being lofty and attainable. 

The single greatest factor that helped me to reach my goal was consistently deploying capital. Because I deployed over $2,000 in capital in 10 of the 12 months in 2021, I was able to invest more than $27,000 for the year!

3. Amass at least $55,000 in investments/end 2021 with a net worth of at least $65,000 - Success - $70,700 in investments and $84,500 in net worth

Due to my commitment to capital deployment for the year and the huge bull market, I was able to crush my goals of amassing at least $55,000 in investments and ending the year with a net worth of at least $65,000.

Financially, 2021 was a year beyond my wildest dreams for this point in my life. With each passing year, I become more motivated to work even harder and smarter to help my portfolio be all that I know it can be.

2021 Personal Goals:

1. Publish at least 1 blog post each week - Success - 52 blog posts published during the year

Once again, I was able to achieve my goal of writing one blog post each week. Looking ahead to 2022, I'm going to keep my goal the same as it has been for years now. That's because I believe writing one blog post each week for this site is enough content for me to properly document my journey to financial independence for myself and posterity.

2. Publish 1 Seeking Alpha article each week - Success - 59 articles published for the year

I also was able to exceed my goal of publishing 1 Seeking Alpha article each week. There were several weeks during the year that I had 2 Seeking Alpha articles published, which explains how 59 of my articles were published during 2021.

Similar to blog posts, 1 Seeking Alpha article each week is a nice balance for me. That's why I'm running the goal back for 2022.

3. End 2021 with 8,000+ followers on Seeking Alpha - Fail - 5,862 followers

Unfortunately, I was unable to run the table with my financial and personal goals due to falling short of 8,000+ followers on Seeking Alpha. But to be fair, I did gain over 800 followers over the end of last year on the articles that I published. It wasn't entirely surprising that I failed to reach 8,000 Seeking Alpha followers. I wasn't exactly covering popular tickers for most of the year because I find that too many articles are published on certain stocks and I enjoy researching those less covered stocks.

Overall, I believe I did pretty well with my personal goals for the year. Going 2 for 3 on your goals is just a sign that you're pushing yourself, but also being realistic about those goals.

Concluding Thoughts:

I'm really thrilled to have attained all but 1 of my goals for 2021. The year in general was great for me and I look forward to giving 2022 my best shot as well. That's all I can do, so I'll let the cards fall where they may!

Discussion:

What were your goals for 2021? 

Were you able to accomplish them too easily? 

Did they prove to be too ambitious?

I appreciate your readership and look forward to your comments in the section below!

Tuesday, December 28, 2021

Expected Dividend Increases for January 2022

As I'm writing this blog post, only about a week remains in the year. Despite the calendar officially turning to winter here in Central Wisconsin, the weather still isn't too bad with highs in the upper 30s Fahrenheit. At this rate, we may be getting snow in May or June to make up for the fact we haven't had consistent snow cover yet this season!

With that aside, let's delve into what turned out to be my strongest month of dividend increases to date by far in my four-plus years of investing!



Actual Dividend Increases for December 2021

Dividend Increase #1: WEC Energy Group (WEC)

The first dividend increase that was announced in December was from WEC Energy Group, which was the first I have received from the stock. WEC announced a 7.4% increase in its quarterly dividend from $0.6775 to $0.7275 per share. This was slightly above my expectations of a 6.3% increase in the quarterly dividend to $0.72 per share. I believe this will be the first of many more strong dividend increases in the future from this wonderful utility based in my home state.

Across my seven shares, my net annual forward dividends surged $1.40 higher due to WEC's dividend hike.

Dividend Increase #2: Eastman Chemical (EMN)

The next dividend increase declared in December came from Eastman Chemical. EMN upped its quarterly dividend by 10.1% from $0.69 to $0.76 per share. This was well above my projection for a 7.2% increase in the quarterly dividend to $0.74 per share, which I'll gladly take from this excellent stock.

My net annual forward dividends were boosted $1.12 across my four shares of EMN as a result of its dividend raise.

Dividend Increase #3: Amgen (AMGN)

The third dividend boost announced in December was from Amgen. AMGN declared a 10.2% increase in its quarterly dividend from $1.76 to $1.94 per share. Once again, this came in ahead of my forecast for an 8% bump in the quarterly dividend to $1.90 per share. This is why it literally pays to be a dividend growth investor, especially with the raises this year. These kinds of raises will easily combat the four decade high in inflation.

Across my four shares, my net annual forward dividends skyrocketed $2.88 higher due to AMGN's dividend hike.

Dividend Increase #4: W.P. Carey (WPC)

The next dividend increase that I received in December came from W.P. Carey. WPC announced a 0.3% increase in its quarterly dividend from $1.052 to $1.055 per share. This was more than the 0.2% bump in its quarterly dividend that I was expecting to $1.054 per share.

My net annual forward dividends inched $0.084 upward as a result of WPC's dividend increase across my seven shares of the stock.

Dividend Increase #5: CVS Health (CVS)

The fifth dividend increase of December from CVS Health came as a bit of a surprise. I was anticipating that the company wouldn't increase its dividend until the end of next year. But based on CVS's tremendous deleveraging progress to this point, it could afford the 10% hike in its quarterly dividend from $0.50 to $0.55 per share.

Interestingly, this is actually the first dividend increase that I have received since I purchased the stock. That's because CVS Health has been focusing for years on repaying the debt related to its acquisition of the health insurer Aetna.

Across my seven shares, my net annual forward dividends were boosted by $1.40 due to the dividend increase from CVS.

Dividend Increase #6: Broadcom (AVGO)

Another dividend increase that I received in December came from Broadcom. AVGO declared a 13.9% hike in its quarterly dividend from $3.60 to $4.10 per share. This was once again moderately higher than the 11.1% increase to $4 per share that I was anticipating. I'm very glad that I built up my position in AVGO during the COVID crash in March.

My net annual forward dividends soared $6 higher across my three shares of the stock as a result of AVGO's dividend hike.

Dividend Increase #7: Pfizer (PFE)

The seventh dividend increase in my portfolio that was announced in December was from Pfizer. PFE announced a 2.6% increase in its quarterly dividend from $0.39 to $0.40 per share. While this came up well short of the 10.3% raise that I was expecting from the stock, I don't blame them for being conservative. But I would have liked to see more from PFE in light of its leading position in the COVID-19 vaccine industry. At least the dividend is extremely safe with its payout being so low, which leaves room for bigger raises in the future.

Across my 17 shares, my net annual forward dividends inched up $0.68 due to PFE's dividend raise.

Dividend Increase #8: Abbott Laboratories (ABT)

The next dividend increase that was declared in December came from Abbott Laboratories. ABT increased its quarterly dividend 4.4% from $0.45 to $0.47 per share, which came in below my forecast of an 8.9% increase in the dividend. But like the raise from PFE, I can't fault a company for being cautious with dividend increases. This is especially the case after ABT's 25% raise last year before I became a shareholder. Being diligent with the payout ratio is exactly what will allow ABT to become a newly minted Dividend King by the end of next year.

My net annual forward dividends edged $0.48 higher across my six shares as a result of ABT's dividend increase.

Dividend Increase #9: Bristol Myers Squibb (BMY)

The ninth dividend hike that I received in December was from Bristol Myers Squibb. BMY announced a 10.2% hike to its quarterly dividend from $0.49 to $0.54 per share. This was a bit higher than the 8.2% increase that I predicted, which the stock can easily afford with its low payout ratio.

Across my 10 shares, my net annual forward dividends shot up $2 due to BMY's dividend raise.

Dividend Increase #10: Dominion Energy (D)

The next dividend increase that was announced in December came from Dominion Energy. D declared a 6% increase in its quarterly dividend from $0.63 to $0.6675 per share, which was just a bit below the 6.3% increase that I was expecting.

My net annual forward dividends were boosted by $0.90 across my six shares as a result of D's dividend raise.

Dividend Increase #11: Realty Income (O)

The eleventh payout increase that was announced in December was from Realty Income. O declared a 0.2% increase in its monthly dividend from $0.2460 to $0.2465 per share. This was exactly what I projected, which is what I love about this Dividend Aristocrat!

Across my 13 shares, my net annual forward dividends inched up by $0.078 due to O's dividend increase.

Dividend Increase #12: American Tower (AMT)

The final dividend increase declared in December came from American Tower. AMT announced a 6.1% hike in its quarterly dividend from $1.31 to $1.39 a share. This easily beat my expectation of $1.37 per share. A 6% increase in a year would be pretty solid itself. But what makes AMT really impressive is that it raises its dividend each quarter. Talk about dividend growth!

My net annual forward dividends were boosted by $0.96 across my three shares as a result of AMT's dividend increase.

Expected Dividend Increases for January 2022

Expected Dividend Increase #1: Realty Income (O)

O is really making the appearances in this series lately with its whopping 4.2% increase in its dividend in November and the slight increase last month. And with another 0.2% increase in its monthly dividend to $0.2470 per share likely to be announced next month, the stock will have raised its dividend for three straight months if it announces an increase in January.

Across my 13 shares of the stock, this would be a $0.078 increase in my net annual forward dividends.

Expected Dividend Increase #2: BlackRock (BLK)

The next stock that I anticipate will up its quarterly dividend next month is BlackRock. Given that analysts are expecting BLK's earnings per share to increase 8.9% to $42.22 next year, I am projecting that BLK will announce a 9.9% raise in its quarterly dividend from $4.13 to $4.54 per share.

If this announcement were to occur, my net annual forward dividends would be lifted by $1.64 across my single share of the stock.

Expected Dividend Increase #3: Kimberly Clark (KMB)

The third stock that I believe will declare a dividend increase next month is Kimberly Clark. Because KMB's EPS is forecasted to grow 9.6% next year to $6.75, I believe that the stock will announce a decent increase to its quarterly dividend. I'm expecting that KMB will raise its quarterly dividend by 5.3% from $1.14 to $1.20 per share.

Across my four shares of the stock, this would boost my net annual forward dividends by $0.96.

Expected Dividend Increase #4: Alliant Energy (LNT)

The final stock that should raise its dividend next month is Alliant Energy. Since LNT is targeting paying out $1.71 in dividends for next year, this won't count as a prediction on my part. This implies that LNT will raise its quarterly dividend by 6.2% from $0.4025 to $0.4275 per share. The company's Board of Directors has already approved the raise, so it's now just a matter of waiting for the actual announcement date.

This will be a $1.30 gain in my net annual forward dividends across my 13 shares of the stock.

Concluding Thoughts:

December was a great way to cap off a year of robust dividend increases. For the month, I received $17.982 in dividend raises. This would require $513.77 in capital investment at a 3.5% yield to replicate!

On the base of dividends that I was receiving from the 12 stocks that went on to raise their dividends this month, the weighted average raise was a solid 6.6%. Given that WPC, O, and AMT raise their dividends each quarter, the annualized raise from these dozen stocks would be even higher taking that fact into consideration. Even in a very inflationary period like the one we're seeing now, my portfolio is managing to stay ahead of inflation.

While I'm only expecting four raises next month, my net annual forward dividends would grow by $3.978 if these dividend announcements play out as expected. 

Overall, my dividend growth portfolio is starting to pick up steam as it rolls down the hill of compounding. I'm very much looking forward to the next year to see just how high my dividends will go!

Discussion:

How was your December 2021 for dividend increases?

Did you receive any first-time dividend increases like I did with WEC, CVS, ABT, and BMY?

Thanks for reading and please feel free to leave your thoughts in the comment section!