Tuesday, May 5, 2020

April 2020 Dividend Stock Purchases

As I indicated in my previous post of this series, the bulk of my capital allocation into early summer will be focused on paying down my Robinhood margin from the $4,960 that it was entering May to $1,000 of interest free margin.

As a result of this commitment to deleverage, my investing activity was relatively limited for the month of April as I'll discuss below.

Starting with my retirement account, my employer and I contributed $252.58 to my Capital Income Builder (CAIBX) holding.

Net of sales charges, I and my employer invested a total of $241.23.

Given that these transactions increased my total share count of CAIBX from 100.088 shares entering the month of April to 104.572 shares heading into May, I added 4.484 shares of CAIBX during the month.

Assuming annualized dividends per share of $2.14 ($0.50/share quarterly dividends plus an annual special dividend of $0.14), this boosted my annual forward dividend income by $9.60, which is a net yield of 3.98%.

The only actual stock purchase came in my Webull brokerage account, which was when I purchased a share of STORE Capital (STOR) at a cost of $16.78.

When considering the $1.40 in annual forward dividends added by the purchase, this equates to an 8.34% yield on the capital deployed.

Aside from the purchasing activity this month, the notable development was that I paid down my Robinhood margin balance from $5,780 to just below $5,000 as a result of an $800 deposit.

Concluding Thoughts:

Overall, I invested $258.01 in dividend stock/mutual fund purchases during the month of April, which collectively added $11.00 in annual forward dividend income.

Unfortunately, I encountered the distribution cut from EQM Midstream Partners (EQM), which was included in my previous post in my expected dividend increases series.

On top of that, I will be including the recently announced 66% dividend cut from Royal Dutch Shell (RDS.B) in my next dividend increases/announcement post as they cut their dividend for the first time since World War II on the last day of April after I updated my previous post a couple of times preceding the cut.

As a result of these dividend cuts sustained during the month of April and all other activity, my dividends edged slightly higher to just under $1,100 heading into May.

Given that the month of May will include 3 paychecks rather than 2, I expect that I'll be able to pay off nearly $2,000 in margin during the month, which will get me significantly closer to reaching my target of $1,000 of margin.

From that point, I will be allocating 5-10% of my portfolio to cash in order to take advantage of future corrections and bear markets to prevent myself from succumbing to the risk of taking out too much margin and being a forced seller.


How was your month in terms of purchasing volume?

Did you add any new names to your portfolio or were you building upon the existing dividend stocks in your portfolio?

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

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