Tuesday, July 27, 2021

Expected Dividend Increases for August 2021

As I'm writing this blog post, the heat and humidity has made its way back to Central Wisconsin with high temperatures reaching into the upper 80s Fahrenheit.

Playing basketball in the driveway will be a bit less comfortable with the heat, but that's not enough to stop me from getting exercise doing something I enjoy as long as I stay hydrated!

Without further ado, I'll be discussing the dividend increases that I received during July 2021 and looking ahead to the dividend increase that I am expecting for August 2021.

Actual July 2021 Dividend Increases 

Dividend Increase #1: Wells Fargo (WFC)

While Wells Fargo fell short of my expectation of a 150% increase in the quarterly dividend from $0.10/share to $0.25/share, it still increased its dividend 100% to $0.20/share, which is a step in the right direction for the company to restore its dividend to the pre-COVID level of $0.51/share in a few more years.

I'd rather a company gradually increase its dividend back to pre-COVID levels to build a cushion and prevent another dividend cut in the future than to have it rush to restore its dividend prematurely.

Across my 8 shares of WFC, my net annual forward dividends soared $3.20 due to the company's dividend increase.

Dividend Increase #2: J.M. Smucker (SJM)

One company that really delivered beyond my wildest dreams in July was J.M. Smucker, which announced a robust 10% dividend increase in the quarterly dividend from $0.90/share to $0.99/share.

The previous two dividend increases leading up to this dividend increase were pretty anemic, so it's nice to see SJM getting back to solid dividend growth.

My net annual forward dividends advanced by $0.72 across my 2 shares as a result of the company's dividend increase.

Dividend Increase #3: National Retail Properties (NNN)

Wrapping up the dividend increases that I received for July 2021, National Retail Properties announced a dividend increase that came in below my expectations. Rather than the 3.8% increase in the quarterly dividend from $0.52/share to $0.54/share that I was predicting, NNN increased a 1.9% increase in the quarterly dividend to $0.53/share.

I was somewhat surprised by the announcement given the recovery in NNN's AFFO/share that I cited in my previous post of this series, but I'll take whatever dividend increases I can get. Perhaps NNN will make up for it with a stronger dividend increase next year.

Across my 11 shares of NNN, my net annual forward dividends increased by $0.44 due to the company's dividend increase.

Expected Dividend Announcement(s) for August 2021

Dividend Increase #1: Altria Group (MO)

The only dividend increase that I am anticipating for August is from the 3rd largest holding in my portfolio in terms of annual dividend income, which is Altria Group (MO).

Most readers are probably aware, but for those that aren't, MO recently announced that it was selling its Ste. Michelle Wine Estates business for $1.2 billion to a private equity firm to focus more on its core business.

In addition, the company expects to use its proceeds to repurchase shares at what look to be an attractive valuation, which will also reduce the company's total dividend obligation, and create a bit more leeway for the next dividend increase.

As a result, I am expecting that MO will announce a 4.7% increase in the quarterly dividend from $0.86/share to $0.90/share.

Should this dividend increase play out as expected, my net annual forward dividends would increase by $2.72 across my 17 shares as a result of the company's dividend increase.

Concluding Thoughts:

My net annual forward dividends increased by $4.36 due to dividend increases received in July 2021, which is equivalent to investing $109 in fresh capital at a 4% average yield.

Looking ahead to next month, I am expecting that MO's dividend increase will help my net annual forward dividends to increase by $2.72, which would be like investing $68 in one's own capital at a 4% average yield.

Discussion:

How was your July as it relates to dividend increases?

What companies are you anticipating you will receive dividend increases from in August?

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

Tuesday, July 20, 2021

My Exciting Announcement and 3 Takeaways

Over the past few weeks, and most recently in my July 2021 Dividend Stock Watch List piece, astute readers may have noticed references to The Motley Fool. That's because just over a month ago, my first piece was published by TMF on whether UnitedHealth Group's (UNH) dividend was as safe following its dividend increase as it was leading up to that dividend increase.

It wasn't long after my first article was published with TMF that I had an epiphany, which was that I could make as much money from TMF as an equity analyst/writer, if not more than I was making at my day job while also finding more meaning and fulfillment in my work.

It was with this in mind that I spent the next few weeks after my day job each day working toward brainstorming the types of content that I could pump out at TMF to blossom into an essentially full-time endeavor when combined with my Seeking Alpha content as well.

The end result was that I ended up putting in my 2 week notice at my employer on June 28th and recently completed my last day in the corporate world as an employee in the traditional sense on Friday, July 9th (I can't rule out an eventual return to the corporate world, so I'll qualify that with "at least for the foreseeable future").

Based on the fact that freelancing contributed $1.4 trillion to the U.S. economy in 2020 and that it is estimated that the majority of the U.S. workforce will be freelancers by 2027, my decision was inevitable in my opinion, especially after having enjoy working remotely most of 2020 and part of this year.


Image Source: Pexels

The First Takeaway: Life Is Too Short Not to Live on Your Terms

While there are varying viewpoints on where we go after passing away at the conclusion of our time on Earth, there is a general consensus among those of differing religious beliefs that this is the one and only life we have here on this Earth.

Because none of us know when we will draw our last breath, it can be argued that we should live our lives more in the present and not get caught up in how others perceive us or the way we live our lives.

While I didn't mind the individuals that I worked with/for and most of my job responsibilities, I have known for a while that I didn't want to be an employee forever.

Don't get me wrong; it's great to have a predictable paycheck and solid benefits that often go along with a day job. 

If I could sum up my decision in one word, it would likely be "autonomy." 

While I now have a great deal of responsibility in managing my workload and providing for myself, the upside is that I have the freedom to choose when I work and the nature of my work. In reclaiming a sense of autonomy for the first time arguably since before I attended the public school system, I'm also likely not giving up anything on the financial end with my career decision.

When factoring in my loss of benefits (worth about $160/month between my 3% employer contribution retirement match, dental, and vision insurance), drastically reduced transportation spending to the tune of roughly $100/month, my day job net income of roughly $2,200/month, and the employer portion of the self-employment taxes (net of the SE deduction) that also go along with being a freelancer, I only need to write 23 articles a month or essentially 1 a day, Monday-Friday at TMF to break even financially.

In even just a slightly optimistic scenario, I could end up making more money doing something that I enjoy with a greater degree of freedom than what I had at my day job.

Even in a pessimistic scenario, I end up making what I was making before or slightly less with more autonomy, which is something that is hard to put a price on.

The Second Takeaway: People Respond to Those Chasing Their Dreams

While many that have disclosed the pursuit of their dreams have been greeted with hostility from others in the past, that fortunately wasn't my experience when I handed my resignation letter to my employer.

Although they obviously didn't want to see me leave, they were happy for me and overwhelmingly supportive of my decision.

Perhaps that's because they have known for a couple years of my Seeking Alpha side hustle and my overall ambition to achieve FI.

At any rate, I'm glad to have spent the first 4 years of my career at my prior workplace as it was as supportive and welcoming environment that any young college grad could hope for from an employer.

The Third Takeaway: Dividend Investing and Frugality Allowed My Entrepreneurial Mindset to Take Root

In many ways, it is very difficult for most people to take a so called "leap of faith" and go from a steady paycheck as an employee to a more variable income as a freelancer or their own "boss."

Because I am fortunate enough to live with my parents and I possess frugal tendencies that come to me naturally, I didn't find it that difficult to put in my notice and transition from an employee to a freelancer.

After all, my average monthly expenses are merely $800-$900, which sets a pretty low bar for me to clear while also continuing to build my dividend stock portfolio.

The second piece of the puzzle, however, is just as important.

While I have a long ways to go before my net dividend income is able to fully cover my expenses, I have been blessed to make a tremendous amount of progress in my nearly 4 years of investing.

As of my writing on July 17th, 2021, my average monthly net dividend income of $153 covers 15-20% of my expenses off the bat.

While I don't envision the need to dip into my net dividend income to cover my expenses and I intend to reinvest that capital as well as $1,000-$2,000+/month in dividend stocks, it's reassuring to know that a nice portion of my expenses are already covered, further lowering the bar for me to make this a viable career move.  

Concluding Thoughts:

I'm very grateful to have been blessed with an interest in dividend growth investing (and financial markets in general) and FI. Without my interest in these particular topics, I'm not sure whether I would have had the financial confidence to freelance as a career in order to live life on my terms.

I look forward to producing content here on the blog on a weekly basis, Seeking Alpha on a weekly basis, and TMF on a regular basis!

Discussion: 

What are your thoughts on freelancing?

Are you a freelancer?

If so, are you a part-time freelancer with a day job or is freelancing your career as is now the case for myself?

Tuesday, July 13, 2021

July 2021 Dividend Stock Watch List

 As I'm writing this blog post, the temperatures here in Central Wisconsin reflect that of a pleasant summer with highs in the low-80s Fahrenheit and lows in the mid-50s Fahrenheit. Since it often gets oppressively hot and humid where I live, I'm very much enjoying the more ideal temperatures.

With that aside, I will finally be getting to the dividend stocks that are on my July 2021 watch list.


Image Source: Pexels

Dividend Stock #1: Pinnacle West (PNW)

The Arizona electric utility that provided service to roughly 1.3 million customers throughout most of Arizona in 2020, with the exceptions of half of Phoenix, the Tucson metropolitan area, and Mohave County in the northwestern part of the state (per Pinnacle West's recent 10-K) recently caught my attention.

Due to the huge influx of residents into Maricopa County's Phoenix-Mesa-Chandler metropolitan area (according to Census.gov), Pinnacle West has benefited from consistent customer base growth year after year, and this trend continued in the first quarter of this year, with 2.1% customer growth for the utility (per Pinnacle West's Q1 2021 earnings press release).

The company demonstrated its resiliency last year, growing its diluted EPS by 2.1% over 2019 in arguably the most challenging operating year in recent memory.

Looking ahead over the next 3 years, Jason Fieber pointed out in a recent post that CFRA is anticipating 5% annual earnings growth during that time (more or less in line with past growth), which should enable the company to grow its dividend at least at a 5% clip given the company's healthy mid-60% diluted EPS payout ratio in 2020 (data sourced from Dividend and Stock History page).

While Pinnacle West isn't dirt cheap by any means, the company is a fair buy when considering Yahoo Finance's average analyst estimate of $4.97 in diluted EPS for 2021 is less than 17 times this year's earnings against the current share price of $83.65 (as of July 11, 2021).

Pinnacle West's 4.0% yield (triple the S&P 500's 1.3%), mid-single digit annual earnings growth potential, and potential for slight valuation multiple expansion should translate into high-single digit to low-double digit annual total return potential over the next decade.

Dividend Stock #2: Clorox (CLX)

Given that the consumer staples company best known for its eponymous Clorox brand paid out $4.44 in dividends per share in FY 2021 and that the company is anticipating $7.45-$7.65 in adjusted EPS for the year ended June 30, 2021 (data sourced from Clorox's Q3 2021 earnings press release and Clorox's Dividend page), Clorox's adjusted EPS payout ratio for the fiscal year will be around 59% at the midpoint figure of $7.55 in adjusted EPS.

This leaves the company with a slight bit of room to expand its payout ratio, which leads me to believe that the dividend will grow ever so slightly ahead of whatever earnings growth the company can deliver in the long-term.

When taking into consideration that Clorox is trading at just under 24 times this year's earnings and that the stock's 2.6% yield is double that of the S&P 500's 1.3%, I believe that while Clorox isn't a bargain, the company is about fairly priced at the current share price of $180.88 (as of July 11, 2021). It's certainly not significantly overpriced as it was earlier this year and last year when it was well into the $200s.

Clorox's 2.6% yield in combination with 6.0-7.0% annual earnings growth and a static valuation multiple make it likely the company will deliver annual total returns around 9-10% over the next decade.

Dividend Stock #3: Kimberly Clark (KMB)

The third and final dividend stock on my watch list for July is Kimberly Clark, a large-cap consumer staple in its own right.

Kimberly Clark's reasonable payout ratio and fair operating fundamentals allowed the company to deliver a 6.5% increase to its quarterly dividend to start this year from the previous $1.07/share to $1.14/share.

Even after the solid dividend increase, Kimberly Clark's adjusted EPS payout ratio is positioned to be around 61% at the midpoint of its $7.40-$7.55 guidance for 2021, which strikes a nice balance between rewarding shareholders with immediate income and also retaining enough earnings to invest in growing the business.

Factoring in that Kimberly Clark is trading at 18 times this year's midpoint adjusted EPS and the 3.5% dividend yield is nearly triple that of the S&P 500's 1.3% (based on the $135.02 share price as of July 11, 2021), I believe that Kimberly Clark is another business trading right around fair value.

Kimberly Clark's 3.5% yield and 5.0-6.0% annual earnings growth make it a safe income play with dividend growth that will likely outpace inflation in the years ahead, which make it a solid buy in my opinion.

Concluding Thoughts:

Since I have one week of earned and unused vacation pay from my day job coming my way, as well as my income from my Seeking Alpha and Motley Fool side hustles, I anticipate that I will have over $3,000 in capital to invest during July 2021.

I'm very excited to deploy my capital into the 3 businesses above, as well as several others to advance my net annual dividends to new heights. I anticipate that I will be investing over $3,000 in capital at an average weighted net yield of 3.5% in July, which would take my net annual forward dividends from about $1,780 to begin the month and just under $1,900 to head into August.

Discussion:

Are any of PNW, CLX, or KMB on your watch list for this month?

If not, what dividend stocks are on your watch list at this time?

Thanks for reading and I look forward to your comments in the comment section below!

Tuesday, July 6, 2021

June 2021 Dividend Income

 As I'm writing this blog post, the 4th of July is just two days away and there are just 182 days left in 2021. Can you believe we're closer to 2022 than we are to 2020?!

Moving to the intent of this post, I will be discussing my dividend income for the month of June 2021. 






Analysis:

During the month of June 2021, I received a record $197.54 in net dividends against the $165.45 in net dividends collected in March 2021, which represents a 19.4% quarterly growth rate.

June 2021's net dividends are a staggering 45.0% higher than the $136.28 in net dividends received in June 2020!

Breaking things down by account, I received $117.36 in net dividends from 29 companies in my Robinhood account, $67.48 in net dividends from the Capital Income Builder (CAIBX) position within my retirement account, $12.24 in net dividends from 6 companies in my Webull account, and $0.46 in net dividends from 23 companies within my M1 Finance account.

The $32.09 increase in my net dividends collected from March 2021 to June 2021 was due to the following activity within my portfolios:

I received an additional $5.41 in net dividends within my CAIBX account as a result of a higher share count from March 2021 to June 2021.

My net dividends received from UnitedHealth Group (UNH) were $1.65 higher due to the company's dividend increase last month and my purchase of a share of the stock in my Robinhood account last month.

I also collected an additional $0.16 in net dividends from my stake in PepsiCo (PEP) within my Robinhood account due to the company's dividend increase.

My net dividends received from T. Rowe Price Group (TROW) were $4.32 higher in my Robinhood account due to the stock paying me my first dividend during June after I initiated a position in April.

I collected an extra $4.13 in net dividends from BlackRock (BLK) due to my decision to open a position within my Robinhood account during April.

My net dividends received from Royal Dutch Shell (RDS.B) edged $0.12 higher as a result of the stock's recent dividend increase.

I also collected an additional $1.15 in net dividends from my Prudential Financial (PRU) position between my Robinhood and Webull accounts due to an addition within my Robinhood account.

My stake in Viatris (VTRS) paid its first dividend in June in my Robinhood account, which drove my net dividends higher by $1.21 during the month.

I received an extra $1.02 in net dividends from L3Harris Technologies (LHX) in June, which was a result of my recent purchase of an additional share of the stock within my Robinhood account.

My net dividends collected from Realty Income (O) were boosted $0.95 due to my purchase of 4 extra shares of the stock in my Robinhood account and the recent dividend increase.

I received an additional $1.68 in net dividends from Microsoft (MSFT) as a result of my decision to open a starter position within my Robinhood account in the stock back in May.

My net dividends collected from International Business Machines (IBM) inched up $0.04 in my Robinhood account due to the company's recent dividend increase.

I received an extra $1.21 in net dividends from Johnson & Johnson (JNJ) within my Robinhood account, which was a result of the company's recent dividend increase and my purchase of another share of the stock recently.

My net dividends collected from Southern Company (SO) were $0.10 higher due to the company's recent dividend increase in my Robinhood account.

I received a $0.78 increase in my net dividends from Pfizer (PFE), which was a result of my purchase of 2 additional shares recently within my Robinhood account.

My net dividends collected from WEC Energy Group (WEC) were boosted by $0.68 due to my recent purchase of another share of the stock in my Robinhood account.

I received an additional $7.53 in net dividends as a result of the elimination of my Robinhood Gold and margin expenses.

Finally, my net dividends collected from my M1 Finance account were $0.05 lower due to the timing of dividend payments from Fastenal (FAST), Norfolk Southern (NSC), and Starbucks (SBUX).

Concluding Thoughts:

My portfolio's net dividend income continued its momentum in June 2021, with a 19.4% quarterly growth rate and a year-over-year growth rate of 45.0%.

While the $747.70 in net dividends that I have collected through the first 6 months of 2021 represent a 51.0% year-over-year growth rate compared to the $495.16 in net dividends received through the first 6 months of 2020, I am on track to fall roughly $100 short of collecting $1,800 in net dividends this year at the rate I am going, assuming a 51.0% growth rate over 2020's $1,127.05 net dividend total.

Needless to say, I will need to step it up a bit in the remaining months of 2021 to meet my goal!

Discussion:

How was your June in terms of dividend income?

Did you receive any dividends for the first time as I did with TROW, BLK, VTRS, and MSFT?

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

Tuesday, June 29, 2021

June 2021 Dividend Stock Purchases

As I'm writing this blog post, July is just 4 days away, and 2021 is on the brink of already being half over! 

I'm making significant progress in achieving my financial goals for the year, and may need to even raise my financial goals in the near future! With the exception of ending this year with 8,000+ followers on Seeking Alpha, I am also on track to achieve my personal goals for the year.

With that aside, I will delve into the intent of this post, which is to discuss my dividend stock purchases for June 2021.


Beginning with my retirement account, I deployed $319.48 in gross capital between my 7% contribution, my employer's 3% contribution, and the reinvestment of my dividends received from my Capital Income Builder (CAIBX) position during June 2021.

Factoring in the 3.5% sales charge on both my contributions and my employer's contributions, I put $310.65 to work, which helped build my CAIBX position by 4.49 shares from 166.944 shares entering June 2021 to 171.434 shares heading into July.
 
Using $2.13 in net annual forward dividends/share, my net annual forward dividends were boosted by $9.56, which equates to a 3.08% net yield on the capital that I deployed during the month.

Shifting to my taxable account purchases, I began the month with adding a single share of UnitedHealth Group (UNH) to my portfolio at a cost of $402.99, following the 16.0% dividend increase. While I missed out on adding UNH in the low-$300s earlier this year, my addition came at a 2021 P/E ratio of less than 22 based on Yahoo Finance's average analyst estimate of $18.57 in EPS for this year, which is still reasonable in my opinion.

Factoring in UNH's new annualized dividend/share of $5.80, my net yield works out to 1.44% or a bit higher than the S&P 500's current yield.

I also decided to add to my British American Tobacco (BTI) position on the same day, purchasing 2 shares at an average cost of $40.22 a share.

Based on MarketWatch's average analyst estimate of $4.58 in EPS for 2021, I added to my position in BTI at a cost of less than 9 times this year's EPS and just 8 times next year's EPS! 

Using BTI's net annual forward dividend/share figure of $2.97, I added $5.94 in net annual forward dividends to my portfolio, which equates to a 7.38% net yield.

The first position that I added to that was on my June 2021 Watch List, was American Electric Power (AEP), which was 2 shares at an average cost of $85.00 a share.

Based on the Yahoo Finance analyst average estimate of $4.67 in EPS for 2021, I paid roughly 18 times this year's EPS for AEP, which is within reason in my opinion, especially given the premium of the broader market.

Based on the $5.92 in net annual forward dividends that were added as a result of my purchase, my net yield works out to 3.48%.

Another stock that was also on my June 2021 Watch List, was Philip Morris International (PM), which I added another share of at a cost of $98.01.

While paying 16 times this year's Yahoo Finance average analyst estimate is a significant premium to what I paid for shares of BTI, I view PM as the ESG king of its industry, which I believe justifies its premium.

The $4.80 in net annual forward dividends that I added due to my purchase equates to a 4.90% net yield.

A notable absence from my stock purchases in June 2021, is STORE Capital (STOR), which shot up over 6% since I highlighted the stock as being on my watch list. Since STOR was already trading around fair value in my opinion, this price activity was just a bit too much for me to justify adding to my position. There's always potentially next month, right?

I also added 4 shares of Verizon (VZ) to my position at an average cost of $57.42 a share, which is about 11 times this year's Yahoo Finance average analyst estimate of $5.09 in EPS.

When factoring in the $10.04 in net annual forward dividends that were added to my portfolio as a result of my purchase, my net yield works out to 4.37%.

Closing out my purchasing activity for the month of June, I opted to initiate a whole share position in JPMorgan Chase (JPM) of 3 shares at an average cost of $153.69 a share.

Based on the Yahoo Finance average analyst estimate of $13.16 in EPS for 2021, I paid less than 12 times this year's EPS, which is pretty reasonable for a company of JPM's quality.

Using the $10.80 in net annual forward dividends that were added to my portfolio due to my purchase (and I believe this amount is set to increase around 30% in the near future given that major banks passed the recent stress test with flying colors, JPM included), my net yield equates to 2.34%.

Concluding Thoughts:

Factoring in the $1,752.84 in net capital that I deployed in June 2021 and the $52.86 in net annual forward dividends that were added to the portfolio due to my purchases, my average weighted net yield was 3.02% in June.

Since July will be a two paycheck month in which I am compensated for a bit of unused vacation time and I have recently started writing for The Motley Fool, I am expecting that I will be able to deploy around $3,000 in July, which will be a huge boon to my net annual forward dividends during the month.

Between the $3.334 in dividend increases that I received in June and the net annual forward dividends that were added from capital deployment, my net annual forward dividends surged from just over $1,720 to begin the month to nearly $1,780 heading into July.

Discussion:

How was your June in terms of capital deployment?

Did you add any positions to your portfolio as I did with JPM?

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


Tuesday, June 22, 2021

Expected Dividend Increases for July 2021

As I'm writing this blog post, the first official day of summer is just two days away. 

In an interesting twist, the first day of summer is set to be well below normal here in Central Wisconsin at a high of just 74 degrees Fahrenheit and a low of 55 Fahrenheit.

Moving to the intent of this post, I will be reviewing the dividend increases that I received during June 2021, and looking ahead to the dividend increases that I am expecting in July 2021.


Actual June 2021 Dividend Increases

Dividend Increase #1: Realty Income (O)

As has been the case in the 3 1/2 years that I have owned the stock, Realty Income didn't fail to meet my expectations. O announced a 0.2% increase in its monthly dividend, from the previous dividend of $0.2350/share to the new dividend of $0.2355/share.

Across my 13 shares of the stock, my net annual forward dividends increased $0.078 as a result of O's dividend announcement.

Dividend Increase #2: W.P. Carey (WPC)

W.P. Carey also announced a 0.2% increase in its quarterly dividend, from the previous dividend of $1.048/share to the new dividend of $1.050/share.

Due to WPC's dividend increase, my net annual forward dividends were boosted by $0.056 across my 7 shares of the stock.

Dividend Increase #3: UnitedHealth Group (UNH)

Rounding out my discussion of dividend increases that I received during June 2021, UnitedHealth Group exceeded my expectation of a 14.4% increase to its quarterly dividend, from $1.25/share to $1.43/share.

UNH instead announced a 16.0% increase in its quarterly dividend, taking it to $1.45/share.

As I discussed in a recent Motley Fool article, I believe that UNH's dividend remains as safe now as it was leading up to the dividend hike, which actually prompted me to recently add to my position.

Across my single share of the stock at the time of the dividend increase, my net annual forward dividends advanced $0.80.

Surprise Dividend Increase: Simon Property Group

While Simon Property Group was due to begin increasing its dividend at some point as COVID restrictions ease and the economy recovers, especially after the 38.1% dividend cut last June as a measure of caution to preserve liquidity, it certainly came as a surprise to me when SPG increased its quarterly dividend 7.7% from $1.30/share to $1.40/share.

As a result of SPG's dividend increase, my net annual forward dividends were boosted by $2.40 across my 6 shares of the stock.

Expected Dividend Increases for July 2021

Expected Dividend Increase #1: Wells Fargo (WFC)

In what I anticipate will be the first increase in Wells Fargo's quarterly dividend since its cut last year, I believe that Wells Fargo's quarterly dividend will be increased to $0.25/share based on Yahoo Finance's average analyst estimate of $3.81 for this fiscal year and a return to a more generous payout ratio.

If this dividend increase plays out, this would work out to a $4.80 increase in my net annual forward dividends across my 8 shares of the stock.

Expected Dividend Increase #2: J.M. Smucker (SJM)

I'm expecting a 3.3% increase in J.M. Smucker's quarterly dividend from $0.90/share to $0.93/share, which would be a notable slowdown from the company's 3 year DGR of 4.9%.

Since SJM is positioned to continue to face growth difficulties going forward, I believe this is a realistic expectation for shares of SJM.

Across my 2 shares of SJM, my net dividends would increase $0.24 if SJM's dividend increase plays out as expected.

Expected Dividend Increase #3: National Retail Properties (NNN)

The final dividend increase that I am expecting for July is from none other than National Retail Properties.

Since NNN is anticipating a recovery in its AFFO/share from $2.80 in 2019 to a midpoint AFFO/share figure of $2.94 in 2021, I believe that NNN will raise its quarterly dividend 3.8% from $0.52/share to $0.54/share. 

My net dividends would advance by $0.88 across my 11 shares of the stock, if the dividend is increased as much as I expect.

Concluding Thoughts:

Overall, O and WPC delivered just as I thought they would in June. I was very pleased to find that UNH's dividend increase slightly exceeded my expectations, and SPG's dividend increase took me by surprise.

These 4 dividend increases helped my net annual forward dividends to advance by $3.334 in June, which would take a fresh capital investment of $83.35 at a 4% yield to replicate.

While I am expecting less dividend increases in July compared to June, I am forecasting a $5.92 increase in my net annual forward dividends primarily due to WFC's anticipated dividend hike.

Discussion:

How was your June in terms of dividend increases?

Are you anticipating any first time dividend increases as I am with NNN?

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

Tuesday, June 15, 2021

May 2021 Dividend Stock Purchases

As I'm writing this blog post, the official start of summer is just over one week away, but that hasn't stopped the temperatures from reaching into highs within the upper 80s to low 90s Fahrenheit in Central Wisconsin over the past few days!

Aside from that update, I will be discussing my capital deployment during the month of May 2021.




Starting off with my retirement account, I deployed $252.00 in capital when factoring in both my 7% contribution and my employer's 3% contribution.

When adjusting for the 3.5% sales charge on both my contributions and my employer's, I put $243.18 to work in May 2021.

The capital contributions made during May 2021 helped my Capital Income Builder (CAIBX) position grow by 3.535 shares from 163.409 shares at the beginning of May to 166.944 shares heading into June.

Using $2.13 in net annual forward dividends/share, my net annual forward dividends advanced $7.53, which works out to a 3.10% net yield.

Moving to my taxable accounts, I started 2 new positions and added to a number of positions during May, including all 3 of the stocks on my May 2021 Dividend Stock Watch List, as well as 1 of the stocks on my April 2021 Dividend Stock Watch List.

I initiated a 6 share position of Abbott Laboratories (ABT) in May 2021 at an average cost of $117.13/share, which was due to the reasons outlined in my May 2021 Dividend Stock Watch List (i.e. a solid balance sheet, favorable earnings outlook, and reasonable valuation).

The $10.80 in net annual forward dividends that I added as a result of this purchase equates to a 1.54% net yield.

Next, I initiated a 3 share position in Microsoft (MSFT) at an average cost of $247.84/share due to Microsoft's flawless credit rating matched only by Johnson & Johnson (JNJ), Microsoft's numerous growth avenues, and reasonable current valuation for long-term investors such as myself.

MSFT's $6.72 in net annual forward dividends that were added due to the purchase work out to a 0.90% net yield.

The final dividend stock on my watch list for May 2021 that I added to was 1 share of L3Harris Technologies (LHX) at a cost of $216.48 due to the company's recent 20% dividend increase, strong outlook for 2021, and attractive mid-teens non-GAAP P/E ratio for the current year.

The $4.08 in net annual dividends added as a result of the purchase equate to a 1.88% net yield.

I also added 2 shares to my position in American Tower (AMT) at a cost of $247.78/share due to the company's reasonable payout ratios, favorable long-term outlook, and commitment to returning value to shareholders primarily via dividends that grow on a quarterly basis.

AMT's $9.92 in net annual dividends (at the time of the dividend stock purchase as AMT raised its quarterly dividend 2.4% from $1.24/share to $1.27/share shortly after my purchase) work out to a 1.99% net yield.

I added 1 share to my position in CVS Health (CVS) at a cost of $84.50, which equated to a 2.37% net yield when factoring in the $2.00 in net annual forward dividends that were added due to the purchase.

I also added 4 shares to my position in Realty Income (O) at an average cost of $65.10/share, which worked out to a 4.33% net yield when considering the $11.28 in net annual forward dividends that were added as a result of the purchase.

I added 1 share to my position in Viatris (VTRS) at a cost of $16.00, which equated to a 2.75% net yield when factoring in the $0.44 in net annual forward dividends that were added due to the purchase.

I also added 1 share to my position in STORE Capital (STOR) at a cost of $33.59, which was due to my reasons outlined in my June 2021 Dividend Stock Watch List

The $1.44 in net annual forward dividends that were added as a result of my purchase work out to a 4.29% net yield.

Since I was impressed by Lowe's (LOW) recent 33.3% increase to its quarterly dividend from $0.60/share to $0.80/share, I added 1 share to my position the day after the dividend increase at a cost of $195.98.

LOW's $3.20 in net annual forward dividends that were added due to my purchase equate to a 1.63% net yield.

I also added 1 share to my Philip Morris International (PM) position at a cost of $97.08 due to reasons discussed in my June 2021 Dividend Stock Watch List.

The $4.80 in net annual forward dividends that were added as a result of my purchase work out to a 4.94% net yield.

Finally, I added 1 share to my General Dynamics (GD) position at a cost of $191.00, which equated to a 2.49% net yield when factoring in the $4.76 in net annual forward dividends that were added due to my purchase.

Concluding Thoughts:

When factoring in the $3,280.08 in net capital that I deployed during May 2021 and the $66.97 in net annual forward dividends that were added as a result of my capital deployment, I deployed capital at an average weighted net yield of 2.04%.

Since June is positioned to be a 2 paycheck month without any additional stimulus anticipated, I am forecasting that June 2021 will be a month in terms of capital deployment within my typical $1,500-$2,000 range.

The $4.20 in dividend increases received during May in combination with the $66.97 in net annual forward dividends added due to my purchase activity, work out to a $71.17 boost in my net annual forward dividends from just over $1,650 at the beginning of May to just over $1,720 heading into June.

Discussion:

How was your May in terms of capital deployment?

Did you add any positions to your portfolio during May as I did with ABT and MSFT?

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

Tuesday, June 8, 2021

May 2021 Dividend Income

Things are really heating up here in Central Wisconsin! This past Friday (June 4), we reached a high temp in the 90s Fahrenheit. The heat also appears poised to continue into the weekend and the next week when this blog post is set to be published.

With that aside, I will be detailing my dividend income during May 2021, which was (spoiler alert incoming) yet another record month for me for the middle month of a quarter.




Analysis:

During the month of May 2021, I collected $116.98 in net dividends compared to the $98.44 in net dividends received during February 2021, which equates to an 18.8% quarterly growth rate.

What's more striking, however, is that the $116.98 in net dividends collected during May 2021 represent a 35.0% YoY growth rate against the $86.62 in net dividends received in May 2020.

Going into detail by account, I received $104.76 in net dividends from 18 companies in my Robinhood portfolio, $11.89 in net dividends from 3 companies in my Webull portfolio, and $0.33 from 15 companies in my M1 Finance account.

My net dividends received from February 2021 to May 2021 increased by $18.54 due to the following activity within my portfolio:

I received an extra $0.54 in net dividends from Williams Sonoma (WSM) within my Robinhood account as a result of WSM's recent dividend increase.

My net dividends collected from British American Tobacco (BTI) were $3.53 higher in my Robinhood and Webull accounts due to BTI's dividend increase and my recent purchases of additional shares of the stock in December 2020 and February 2021.

I received an additional $0.01 from Realty Income (O) within my Robinhood account as a result of O's recent dividend increase.

My net dividends collected from AbbVie (ABBV) in my Robinhood account advanced $1.30 due to my recent purchase of another share of the stock.

I received a $0.27 boost in my net dividends received from General Dynamics (GD) within my Robinhood account as a result of the stock's recent dividend increase.

My net dividends collected from Verizon (VZ) in my Robinhood account surged $8.79 due to my initiation of a whole share position.

I received $4.00 less in net dividends from The GEO Group (GEO) within my Robinhood and Webull accounts as a result of the stock's recent dividend suspension, which I now realize I forgot to include in the Actual Dividend Announcements for April 2021 section of my Expected Dividend Increases for May 2021 post.

My net dividends benefited from an $8.07 reduction in my Robinhood Gold ($5.00)/margin expenses ($3.07) due to my discontinuation of my Robinhood Gold subscription. 

Finally, I collected $0.03 in additional net dividends within my M1 Finance account due to the timing of Fastenal's (FAST) and Norfolk Southern's (NSC) dividend payments.

Concluding Thoughts:

As a result of dividend increases and steady capital deployment, my net dividends advanced 18.8% on a quarterly basis and an astonishing 35.0% over last May's total.

This was the first of what I anticipate will be many middle of the quarter months in the triple digits, which is encouraging considering all of the distribution cuts (i.e. ET and EQM, which later became ETRN) and dividend cuts/suspensions (i.e. SKT and GEO) that the portfolio has endured over the past year.

As painful as these cuts and GEO's suspension have been, I'm grateful that they occurred now when I'm not dependent on the income rather than years down the line when I am on more of a fixed income. 

It was a lesson that I foolishly ignored in my earlier days of investing, but the lesson to not chase yield is one I am beginning to take to heart, especially with my capital deployment in higher growth dividend stocks in recent months. The common denominator in most, if not all of the dividend cuts and suspensions I have went through over the years was eye-popping (unsustainable) yield, especially in the high-single digits to low-double digits.

Having finally learned this lesson, I look forward to seeing how long the portfolio can go before its next dividend cut (not counting T's upcoming dividend cut next year).

Discussion:

How was your May in terms of dividend income?

Did you receive any first time dividends during the month as I did from the whole shares of VZ in my Robinhood account?

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

Tuesday, June 1, 2021

Expected Dividend Increases for June 2021

As I'm writing this blog post, Memorial Day is a couple days away and June is fast approaching. It's hard to believe that half of 2021 is just weeks away from being in the books!

With that aside, I will be discussing the dividend increases that I received in May and looking ahead to the dividend increases that I am expecting in June.

Actual May Dividend Increases

Dividend Increase #1: American Tower (AMT)

American Tower announced a 2.4% increase in its quarterly dividend, taking it from $1.24/share to $1.27/share, which was slightly above my expectation of a 1.6% increase in the quarterly dividend as outlined in my previous post of this series.

For those that aren't familiar with AMT, the stock has increased its dividend each quarter without fail since its REIT conversion in 2012.

Overall, I'm very pleased with the first dividend increase that I received from AMT since I initiated my position in the stock back in April.

Across my 3 shares of the stock, my net annual forward dividends increased $0.36 as a result of AMT's dividend increase.

Dividend Increase #2: Lowe's (LOW)

Given Lowe's impressive operating results to start off the year (25.9% consolidated comparable sales growth and 81.4% YoY diluted EPS growth), LOW's management team and Board of Directors felt comfortable hiking its quarterly dividend by a staggering 33.3% from $0.60/share to $0.80/share.

Since this raise was just over triple what I was anticipating and LOW can easily afford the dividend increase, I'm glad to see LOW rewarding shareholders with a very generous dividend increase.

My net annual forward dividends surged $3.20 across my 4 shares of LOW's at the time of the stock's dividend increase.

Dividend Increase #3: Leggett & Platt (LEG)

Shortly after I wrote my previous post of this series, Leggett & Platt announced a 5.0% increase in its quarterly dividend, taking the quarterly dividend from $0.40/share to $0.42/share just as I expected.

Across my 8 shares of the stock, my net annual forward dividends advanced $0.64 due to LEG's dividend increase.

Expected Dividend Increases for June

Expected Dividend Increase #1: Realty Income (O)

Starting off June's expected dividend increases, is none other than The Monthly Dividend Company itself, Realty Income. 

Since O has a track record of quarterly dividend increases at the end of each quarter and typically a larger raise at the beginning of the year, I am anticipating that O will announce a 0.2% increase to its monthly dividend, taking it from the previous $0.235/share to $0.2355/share.

Should this dividend increase manifest itself as I expect, my net annual forward dividends would increase $0.078 across my 13 shares of the stock.

Expected Dividend Increase #2: W.P. Carey (WPC)

Another sturdy dividend payer with a track record of delivering dividend increases each quarter is W.P. Carey.

Similar to O, I am anticipating a 0.2% increase in WPC's quarterly dividend, from the old quarterly dividend of $1.048/share to $1.050/share.

Across my 7 shares of the stock, my net annual forward dividends would be boosted by $0.056 should this dividend increase play out.

Expected Dividend Increase #3: UnitedHealth Group (UNH)

The final dividend increase that I am expecting is from none other than the healthcare behemoth, UnitedHealth Group.

Since UNH is poised to continue with strong double-digit earnings growth in 2021, I am predicting that UNH will announce a solid 14.4% increase in its quarterly dividend, from $1.25/share to $1.43/share.

My net annual forward dividends would advance by $0.56 across my single share of UNH in the event that this dividend increase occurs.

Concluding Thoughts:

Overall, May was a very strong month in terms of dividend increases despite the fact that there were only 3 this month. 

I received $4.20 in dividend increases during May, which would be equivalent to adding $105.00 in fresh capital at a 4% yield.

While I am expecting another 3 raises in June, I don't believe June's impact of dividend increases will come anywhere near May's due to my limited allocation to the one true growth stock that will be announcing a dividend increase in June, which is UNH.

Even so, my net annual forward dividends are just over $1,720 heading into June, which is really beyond what I could have imagined by this point in my life. I still have a long way to go on the road to attaining financial freedom, but the progress to date since I began investing nearly 4 years ago has been very encouraging.

Discussion:

Were May's dividend announcements better than your expectations as was the case with myself?

Did you receive any first time dividend increases as I did with AMT?

Thanks for your readership and I look forward to your comments in the comment section below!

Tuesday, May 25, 2021

June 2021 Dividend Stock Watch List

As I'm writing this blog post, Memorial Day, the unofficial start of summer, is just 8 days away. We have been fortunate enough here in Central Wisconsin to receive meaningful precipitation over the past week, which was more than welcomed by yours truly, especially considering my rant last week about it looking more like a desert where I live by the day.

With that aside, I will be going over a few of my dividend stock picks heading into June.

Massive spoiler alert: This list marks arguably my first of the series that tilts more toward value and yield-oriented picks than growth-oriented picks.

100 US Dollar Banknotes

                                                          Image Source: Pexels

Dividend Stock #1: Philip Morris International (PM)

What would be more fitting to start off an income-oriented dividend stock watch list than Philip Morris International (hereafter referred to by its ticker, PM)?

To be fair, I actually believe that PM is more of an income and growth hybrid pick given its reputation as the ultimate ESG pick of its industry.

Since I last covered PM in March on Seeking Alpha, PM produced strong operating results in the first quarter, with the company posting 2.9% YoY net revenue growth and a 590 basis point expansion in adjusted operating income margins, which helped the company to generate an all-time high adjusted diluted EPS figure of $1.57, marking a 21.5% YoY growth rate (data sourced from PM's 2021 First-Quarter Results Presentation).

PM continued to make tremendous progress on its stated mission of building a smoke-free future, with its smoke-free product revenues growing from 21.7% of total revenues in Q1 2020 to an astounding 28.0% in Q1 2021.

Simply put, PM is transitioning to not only a less harmful product line in the future, but the product line is more profitable than the legacy business, which explains why adjusted OI margins expanded significantly. 

To that point, Yahoo Finance analysts are forecasting 12.8% annual earnings growth over the next 5 years, while PM is trading at merely 16 times this year's forecasted earnings.

At the current share price of $97.42 (as of May 23, 2021), I believe that PM offers a clear path to 10%+ annual total returns over the next decade with its 4.9% yield, conservative mid-single digits annual earnings growth, and slight multiple expansion over the long-term.

Dividend Stock #2: STORE Capital (STOR)

The next stock on my list is STORE Capital (hereafter referred to by its ticker, STOR), which despite the slightly disappointing operating results in the first quarter, is a solid pick IMO.

First, STOR is trading at about 17 times this year's AFFO/share guidance of $1.90-$1.96 (based on the $33.65 share price as of May 23, 2021).

Despite the fact that STOR's AFFO/share of $0.47 was below last year's figure of $0.49 (per STOR's Q1 2021 earnings call), it's worth noting that the bulk of Q1 2020 was without COVID-19's significant impact, whereas all of Q1 2021 was subject to some COVID disruptions.

Cash collections continued to improve from 93% in Q1 2021 to 95% at the start of Q2 2021 in April, which is an encouraging trend that I will continue following.

After a 2019 that saw AFFO/share of $1.99, STOR is looking to recover from the impact of COVID, which I estimate the company will rebound from to deliver AFFO/share growth over 2019 levels next year.

Despite the challenges of the past year, STOR remains a company that I believe has the potential to deliver annual mid-single digit AFFO/share growth on a consistent basis.

STOR's 4.3% yield, annual mid-single digit AFFO/share growth potential, and roughly static valuation multiple would allow for the stock to meet my 10% annual total return target over the next decade from the current share price.

Dividend Stock #3: American Electric Power (AEP)

Wrapping up my dividend stock watch list, is American Power (hereafter referred to by its ticker, AEP).

AEP delivered solid operating results to start off 2021, with operating EPS surging 12.7% from $1.02 in Q1 2020 to $1.15 in Q1 2021 (data sourced from AEP's 1st Quarter 2021 Earnings Release Presentation).

AEP reaffirmed its guidance of $4.55-$4.75 in operating EPS, which would fall just outside AEP's 5-7% long-term growth target at the midpoint.

Using AEP's midpoint operating EPS figure of $4.65 and comparing it to the current share price of $86.65 (as of May 23, 2021), AEP is trading at just under 19 times this year's earnings, which I believe is reasonable for a utility growing firmly in the mid-single digits annually.

I believe that AEP's 3.4% yield, mid-single digit annual earnings growth potential, and slight multiple expansion should translate into the stock meeting my 10% annual total return requirement over the next decade.

Concluding Thoughts:

While the past few months of capital deployment have been heavily concentrated into growthier dividend stocks, I anticipate that I will be returning to more of a value and income-oriented approach for June.

That's not to say that I won't also be adding to more growth-oriented dividend stocks in June, but it certainly won't be to the extent of the past few months.

Discussion:

Are any of PM, STOR, or AEP on your watch list heading into June 2021?

If not, what dividend stocks are on your watch list?

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


Tuesday, May 18, 2021

April 2021 Dividend Income

 As I'm writing this blog post, it's mid-May and we haven't received any meaningful precipitation in Central Wisconsin for almost two weeks!

To make matters worse, the temperatures have heated up the last few days to highs in the 70s Fahrenheit, which has led to persistently high risk of wildfires in my area.

Hopefully, we will receive more than trace amounts of precipitation in the near future as it's starting to resemble more of a desert here by the day.

With that aside, I will be delving into the intent of this post, which is to discuss the dividend income that I received during April 2021.



Analysis:

During the month of April 2021, I received $89.03 in net dividends.

Compared to the $80.26 in net dividends that I received in January 2021, this works out to a 10.9% quarterly growth rate.

Additionally, the $89.03 in net dividends collected in April 2021 equates to a staggering 79.8% YoY growth rate compared to the $49.52 in net dividends received in April 2020.

Going into detail by account, I received $78.99 in net dividends from 16 companies in my Robinhood account, $9.79 in net dividends from 5 companies in my Webull account, and $0.25 in net dividends from 11 companies in my M1 Finance account.

The following activity within my respective accounts resulted in an $8.77 increase in my net dividends from January 2021 to April 2021:

My net dividends increased $8.38 within my Robinhood account as a result of the elimination of my margin ($3.38 boost in net dividends) and the cancellation of my Robinhood Gold expense ($5.00 boost).

I received an additional $0.11 in net dividends from Cisco (CSCO) in my Robinhood account due to the recent dividend increase.

Another dividend increase that resulted in an extra $0.01 in net dividends in my Robinhood account came from Realty Income (O).

I received a $1.06 boost in my net dividends received from my W.P. Carey (WPC) position within my Robinhood account, which was due to a combination of the recent dividend increase and my recent purchase of an additional share of the stock.

My net dividends received from STORE Capital (STOR) increased $0.36 in my Robinhood account as a result of my recent purchase of an extra share of the stock.

I also received an additional $1.20 in net dividends from Philip Morris International (PM) within my Robinhood account due to my recent purchase of an additional share of the stock.

My net dividends received from GlaxoSmithKline (GSK) within my Robinhood and M1 Finance accounts were $2.10 higher as a result of my purchase of extra shares in my Robinhood account and the historically higher second quarter dividend.

I received an additional $0.02 from Albemarle (ALB) across my Robinhood and Webull accounts as a result of the recent dividend increase.

My net dividends received from Genuine Parts Company (GPC) within my Robinhood account were $0.94 higher due to the recent dividend increase and my purchase of an additional share of the stock.

Due to PepsiCo's (PEP) dividend payment schedule, my net dividends within my Robinhood and M1 Finance accounts were $2.07 lower.

The timing of Digital Realty Trust's (DLR) dividend payment resulted in a $3.36 reduction in my net dividends received within my Robinhood account.

Finally, the timing of JPMorgan Chase's (JPM) dividend payment within my M1 Finance account led to an additional $0.02 in net dividends.

Concluding Thoughts: 

Due to several dividend increases and consistent capital deployment over the past several months, my net dividends logged a solid 10.9% quarterly growth rate from January 2021 to April 2021.

What really is a testament to the power of dividend growth investing and consistent capital deployment, is the 79.8% YoY growth rate in net dividends from April 2020 to April 2021.

Since I'm anticipating that I'll be able to continue deploying $1,500-$2,000/month in capital for the foreseeable future, I'm forecasting that I will be very close to surpassing $100 in net dividends during July 2021, depending on what dividend stocks look attractive the next few months, and their payment schedules.

Discussion:

How was your April in terms of dividend income?

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

Tuesday, May 11, 2021

April 2021 Dividend Stock Purchases

 As I'm writing this blog post, it's officially mid-May. Even though the weather over the past few weeks has mostly been mild, the last few days have brought a cold front to Central Wisconsin, with temperatures peaking in the 50s Fahrenheit during the day and dipping down just below freezing at night.

With that aside, I will be delving into my capital deployment during the month of April 2021. 



Beginning with my retirement account, I deployed $378.00 in capital between my 7% contribution to my Capital Income Builder (CAIBX) position and my employer's 3% contribution.

Adjusting for the 3.5% sales charge on the contributions of myself and my employer, I deployed $364.78 in capital during April 2021.

The capital contributions made during April helped my CAIBX position to grow from 157.983 shares entering April to 163.409 shares heading into May.

Factoring in $2.13 in net annual dividends/share (which was the net annual dividends/share paid out by CAIBX last year), my net annual forward dividends were boosted by $11.56 as a result of my capital deployment, which works out to a 3.17% net yield.

Moving to my taxable accounts, I added to an existing position and initiated 3 new positions during April, all of which were on my watch list for April 2021.

I started April off by adding a share of Johnson & Johnson (JNJ) at a cost of $163.64, which equates to a 2.47% net yield when factoring in the $4.04 (ahead of the dividend increase) that was added to my net annual forward dividends that were added to my portfolio due to the purchase. JNJ's recent dividend increase was yet again well in excess of inflation, which means that the only year of JNJ's 59 year dividend increase streak that JNJ failed to beat inflation with its dividend increase was in 1980 when inflation was 13.5%!

Next, I initiated a 4 share position in T. Rowe Price Group (TROW) at an average cost of $178.69 a share as TROW, which works out to a 2.42% net yield when considering the $17.28 in net annual forward dividends that were added to my portfolio as a result of the purchase.

The second position that I added to my portfolio was 1 share of BlackRock (BLK) at a cost of $829.00, which equates to a 1.99% net yield when factoring in the $16.52 in net annual forward dividends that were added to my portfolio due to the purchase. 

The third and final position that I added to my portfolio was 1 share of American Tower (AMT) at a cost of $250.00, which works out to a 1.98% net yield when considering the $4.96 in net annual forward dividends that were added to my portfolio as a result of the purchase.

Concluding Thoughts:

When factoring in the $2,322.18 in net capital that I deployed during April 2021 and the $54.36 in net annual forward dividends that were added to my portfolio as a result of my purchases, I deployed capital at an average weighted net yield of 2.34%.

While my capital deployment was a bit lower than I anticipated due to the timing of my transfer to my brokerage account, the lower than anticipated capital deployment in April will lead to just over $3,000 in available capital for deployment during May.

Heading into May, my net annual forward dividends are just over $1,650.

Discussion:

How was your April in terms of capital deployment?

Did you initiate any new positions during April as I did with AMT, BLK, and TROW?

Tuesday, May 4, 2021

Expected Dividend Increases for May 2021

As I'm writing this blog post, we have went from ideal high temperatures in the 60s Fahrenheit here in Central Wisconsin just a few days ago to muggy highs in the low 80s. It's safe to say that although summer is officially 7 weeks away, summer has unofficially began here in Central Wisconsin.

With that aside, I'll be discussing my portfolio's dividend announcements during the month of April and looking ahead to dividend announcements that I'm expecting in May.

Actual Dividend Announcements for April 2021

Dividend Freeze #1: Exxon Mobil (XOM)

While I was anticipating that Exxon Mobil would have announced a dividend increase in April as was customary pre-COVID for more than 3 decades, XOM opted to keep its quarterly dividend in line with the previous of $0.87/share.

Although a bit disappointing, I can understand why XOM opted to freeze its dividend. It will be interesting to see whether the company will raise its dividend by the end of the year in order to maintain its status as a Dividend Aristocrat.

Distribution Freeze #1: Enterprise Products Partners (EPD)

When Enterprise Products Partners announced that it was keeping its distribution in line with the previous of $0.45/unit, it was somewhat surprising. 

Given that EPD had just resumed distribution increases with a nice 1.1% raise in January, WTI crude has since stabilized to an average price of $59.06/barrel through April of this year, and that natural gas has settled at an average price of $3.30/MMBtu, I was anticipating a 0.6% increase in the quarterly distribution to $0.4525/unit.

At any rate, EPD's distribution is well-covered and since the company is a high-yielding component of my portfolio, I don't need distribution increases every quarter to be pleased with the strong income that it throws off for my portfolio.

Dividend Increase #1: Johnson & Johnson (JNJ)

Johnson & Johnson announced a 5.0% increase in its quarterly dividend from $1.01/share to $1.06/share, which was slightly below my expectation of a 6.9% increase in the quarterly dividend to $1.08/share.

Regardless, JNJ's dividend increase once again easily beat inflation, and the only year of the 59 consecutive years of dividend increases that JNJ failed to beat inflation was in 1980 when inflation was a staggering 13.5%.

Across my 4 shares of the stock, my net annual forward dividends increased by $0.80 as a result of JNJ's dividend announcement.

Dividend Increase #2: Southern (SO) 

Southern announced a 3.1% increase in its quarterly dividend from $0.64/share to $0.66/share, which was precisely what I predicted.

My net annual forward dividends advanced by $0.40 across my 5 shares of the stock due to SO's dividend announcement.

Dividend Increase #3: International Business Machines (IBM)

Wrapping up April's dividend announcements with a disappointing dividend increase from International Business Machines, IBM did the bare minimum to extend its consecutive dividend increase streak to 26 years, announcing a 0.6% increase to the quarterly dividend from $1.63/share to $1.64/share.

Despite this disappointing dividend increase, IBM remains a cash flow machine poised to throw off $11-$12 billion in FCF in 2021 (against a dividend obligation of roughly $6 billion), which bodes well for the repayment of the company's ~$56 billion in debt in the years ahead.

Across my 4 shares of the stock, my net annual forward dividends increased by $0.16 as a result of IBM's dividend announcement.

Expected Dividend Increases for May 2021

Expected Dividend Increase #1: Lowe's (LOW)

It will be interesting to see whether Lowe's resumes its pre-COVID dividend increase schedule of late May or early June since the company just raised its dividend last August.

In light of the favorable operating environment for LOW, Yahoo Finance is forecasting that the company will grow its earnings 14.2% annually over the next 5 years. 

With this in mind, I am anticipating that whether LOW's dividend increase is in late May/early June or August again, LOW will announce a 10.0% increase in its quarterly dividend from $0.60/share to $0.66/share.

Should this dividend increase manifest itself, my net annual forward dividends would be boosted by $0.96 across my 4 shares of the stock.

Expected Dividend Increase #2: Leggett & Platt (LEG)

Since Leggett & Platt hasn't announced a dividend increase since May 2019, it will be interesting to see whether LEG makes up with a decent dividend increase this time around.

I'm anticipating that LEG will announce a 5.0% increase in its quarterly dividend from $0.40/share to $0.42/share, which takes into consideration that LEG is recovering from the impact of COVID-19.

If this dividend increase plays out as I expect, my net annual forward dividends would advance by $0.64 across my 8 shares of the stock.

Expected Dividend Increase #3: American Tower (AMT)

Rounding out my list of dividend increases that I'm forecasting for May is the hyper-dividend growth stock, American Tower.

What makes AMT interesting, is that aside from its commitment to growing its dividend by around 15% for 2021, AMT regularly increases its dividend each quarter.

Since AMT's dividend increases announced in May are typically the smallest, I am anticipating that AMT will announce a 1.6% increase in its quarterly dividend from $1.24/share to $1.26/share.

Should this dividend increase play out, my net annual forward dividends would be boosted by $0.24 across my 3 shares of the stock (since I will be purchasing another 2 shares of the stock the first week of May ahead of the dividend increase).

Concluding Thoughts:

Since XOM and EPD didn't increase their dividend/distribution, my net annual forward dividends only advanced by $1.36 during April. Regardless, this would require a $34.00 capital investment at a 4% yield to replicate.

Looking ahead to May, I am anticipating that I will receive $1.84 in dividend increases during the month, which would require $46.00 in fresh capital invested at a 4% yield to match.

Discussion:

Did you experience disappointing dividend announcements as I did with IBM's paltry dividend increase?

Are you expecting any first time dividend increases as I am with AMT?

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