Monthly Income Update – May 2022

My dear readers,

The last few weeks have been really tough as far as finding any free time whatsoever towards blogging. As you might be aware, I switched jobs recently and a new job takes a lot of time especially during the initial stages where there is a steep ramp-up. Combine that with family health issues and then the end of the school year and other family activities, summer approaching etc., I have absolutely no free time for anything else. And that is how it should be. Family comes first after all.

That said, I am as strongly committed to my pursuit of financial independence through dividend growth investing as I am to this blog. This blog is very much a part of my investing journey. Which is why come what may, I will find some time to post my monthly income updates. This way, I can atleast make some time to look at my portfolio and see what is going on.

Lets get into the numbers then, shall we.

Dividend Income Received

Sl. No.Company / ETF (ticker)Amount
1.Apple Inc. (AAPL)$2.31
2.AbbVie (ABBV)$20.61
3.Albertsons Inc. (ACI)$1.21
4.Caterpillar (CAT)$1.12
5.Clorox (CLX)$51.19
6.Costco (COST)$2.71
7.Procter & Gamble (PG)$10.15
8.AT&T (T)$1.16
9.Texas Instruments (TXN)$57.77
10.Verizon (VZ)$24.7
11. Realty Income Corp (O)$12.5
12.STAG Industrial (STAG)$3.5
13.JP Morgan Equity Income ETF (JEPI)$1.4
Total$189.88

So a total of 13 companies/ETFs rewarded me a monthly income of $189.88. Among these, TXN was highest dividend income payer, closely followed by CLX. I am very happy with my current percentage position in TXN. I have previously written about why this is one of my core holdings and why I am very bullish. I also made about $49.31 in option trading by writing covered calls. This brought my grand total for monthly income to about $239.19. At the same time last year, I had made about $35.96. So if you look at the YoY growth, this is about a 500%+ increase! Granted that a lot of this growth is due to the volume of my invested capital at this point in my journey. But still…500%+ is pretty staggering.

I added a new position in JEPI in one of my tax-advantaged accounts. JEPI is an actively managed fund that generates income by selling covered call options on large cap stocks. The trailing 12-month distribution yield is about 7.96%, at the time of writing this. I also looked at the top-holdings and the overall fund prospectus and their focus is mostly around the SP500 stocks tending towards low-volatility and that they believe are approaching over-valued territory. At the time of writing this, their top four holdings are Bristol Myers Squibb (BMY), Hershey (HSY), Progressive (PGR) and Coca-Cola (KO), all of which seemed overvalued per my analysis as well. Overall, I liked the exposure of relying on a covered call ETF in my tax-advantaged accounts. This is an interesting exercise, giving the benefits of covered call option trading without having to spend as much time. The high distribution yield is an interesting play in what is a very high inflationary environment. Anyway, we will see how this turns out.

Buys and Sells

There were no sells this month.

As far as buys, there was a lot more activity as my pending buy orders go triggered. Among the big buys, I added to my positions for MSFT, TROW, TXN and JPM. Some smaller “staying in the game” purchases included AFL, V, VZ and TGT. TGT and WMT got slaughtered this month as far as their stock prices after their earnings results. None of this was particularly surprising (to me atleast), because the effects of inflation, the situation in eastern Europe and the lockdowns in China were bound to have their impacts on companies in this sector. TGT, in particular, has been a big beneficiary of the lockdown paradigm for the best part of the last two years. So a reversion to the mean was certainly on the cards. Overall though, I think the business fundamentals are sound and I do not see this company going away soon atleast in my lifetime.

Summary

Yet another month is in the books. I am really hopeful of being more regular with my blog updates. We shall see. Let me know in the comments below as to how is your portfolio doing and how was your May.

See y’all in the next post…

Monthly Income Update – Mar 2022

My dear readers,

Hope you are all doing well, staying healthy and staying invested in your own future. Unfortunately, the situation in Eastern Europe continues to remain volatile and this has had its impact on the markets world-wide. My own personal life is also going through some interesting changes as I discussed in my previous post.

At the risk of sounding like a broken record, I will restate again that dividend growth investing as a strategy has been incredibly helpful during these turbulent times. Its truly passive nature is a huge blessing. I have not been checking on my portfolio and it is mostly in “auto-pilot” this whole time. What is amazing is that while my portfolio has been in this hands-off mode, it has generated a record amount as far as dividend income since its inception!

Let us get into the numbers to emphasize this point.

Dividend Income Received

Sl. No.Company / ETF (ticker)Amount
1.AFLAC Inc. (AFL)$14.48
2.Church and Dwight Co. (CHD)$2.11
3.Duke Energy (DUK)$4.97
4.The Home Depot (HD)$9.58
5. Intel Corp. (INTC)$3.65
6. Johnson and Johnson (JNJ)$36.25
7.Lockheed Martin (LMT)$46.80
8. 3M (MMM)$48.46
9.Microsoft (MSFT)$6.83
10.NextEra Energy (NEE)$1.71
11.Pepsi Co. (PEP)$8.70
12.Snap-On Inc. (SNA)$4.26
13.The Southern Co. (SO)$10.67
14.Target (TGT)$2.18
15. T. Rowe Price Group (TROW)$57.66
16.UnitedHealth (UNH)$2.92
17.Visa (V)$9.61
18. Whirlpool Corp. (WHR)$22.75
19.Waste Management (WM)$0.66
20. Exxon Mobil (XOM)$2.68
21.Schwab’s US Dividend Equity ETF (SCHD)$23.34
22.iShares Core Dividend Growth ETF (DGRO)$5.85
23.Realty Income Corp. (O)$11.66
24.Digital Realty Trust (DLR)$34.59
25.STAG Industrial (STAG)$3.48
Total$375.85

So, a total of 25 companies/ETFs contributed a grand total of $375.85 in terms of total monthly income. This is the first time my portfolio breached the $300 mark since its inception, making it a a new record. At the same time last year, I had earned $68.37 in total monthly income. The YoY growth is nearly over 5x and it is mostly due to the diligent and rather aggressive investment of capital into this portfolio. My largest payment came through TROW, which is something that I have been investing into pretty aggressively since the start of the year. The stock itself has plummeted from it highs back in December and I was seeing so discernable change in fundamentals.

So far, in this quarter, I have earned a total of $669.73 in terms of dividend income. At the same time last year, my total quarterly dividend income was $94.48. So even the quarter-over-quarter performance is truly impressive.

As far as my projections for the rest of the year, I am expecting to be averaging around the $250 mark in terms of monthly dividend income. Fingers crossed, I am looking in good shape to hit the $3000+ mark of earned dividend income for the year, which is one of my goals for this year.

This was expected to be a “heavy-paying” month in terms of dividend income. I am expecting April to be a LOT more quieter in terms of that metric. I am planning on writing some options to boost my income. This is, of course, time-permitting and if the market conditions are conducive.

Buys and Sells during this month

Like I said before, this was a busy month on the personal front. So trades were limited.

I continued adding small tranches to my existing position for TROW. The other stock that was in my radar was WHR. While there have been no telling changes in fundamentals, I think Mr. Market is probably thinking that inflationary pressures are going to have a bigger impact on WHR’s performance especially in Asia and other world markets. While there is some grain of truth in this sentiment, the reaction is a little over-the-top IMHO. Good buying opportunity for me as the starting yield looks very attractive, dividend is relatively safe and the stock is relatively cheap.

AT&T (T) was in the news during the month with the CEO elaborating about the previously announced plans for spin-off involving Discovery and WarnerMedia and also about the dividend cut. T has been one of my worst investments and a stock I wished I had never owned. This was something that I had purchased during my initial days as a dividend growth investor and I made the rookie mistake of chasing the yield and also believing the hype around “oh this is conglomerate and look at how many businesses they own etc.”. This was my stupidity, because one quick look at their balance sheet and the quality of the management would have told me that this is a bad investment decision. Thankfully, because of a categorized dividend growth portfolio strategy, I have safeguards in place against my own stupidity. I have placed T in the “speculative” category of my portfolio and, therefore, only invested a limited amount of capital in them. I will continue to hold this stock for now. However, I have actually no interest in the newly formed spin-off and also holding T as a pure telecom play, as I already hold Verizon (VZ) and I think they are a much better player in the telecom space as compared to T. More on this in a future post.

I continued adding to my position in DLR as this was still attractively priced. I am using every opportunity to dollar-cost average into two ETFs, SCHD and DGRO. Both these ETFs have performed pretty well and give me a good mix of attractive dividend-paying companies. I hold these ETFs and REITs in my tax-advantaged accounts (HSA and ROTH IRA). Investing in ETFs in this account helps me not have to track these accounts as far as individual stock positions (except REITs).

Watchlist

I am taking a serious look at JP Morgan Chase (JPM) and The Home Depot (HD). JPM stock has been on a steady decline since the start of the year, dropping nearly 22% in this period. A quick look at the Price-to-Tangible Book Value seemed bring this into my radar where the price starts looking attractive. I did not see any significant change in fundamentals, but then this is only a cursory look. Will need to dive deeper.

HD still seems to be hovering closer to my estimated fair value and I continue to dollar-cost-average, adding small tranches whenever an opportunity presents itself.

Summary

So another record-breaking month is in the books. I do hope to get a bit more active on the blog and Twitter in the coming few months (fingers crossed).

Take care and see you in the next post..

Monthly Income Update – February 2022

Time for a monthly dividend income update post. Before I start though, I wanted to drop a note regarding the current situation in Eastern Europe. It is difficult to remain focused and talk about things like personal finance and related topics when there is so much turmoil due to a war-like situation. My prayers are with the people of Ukraine and I hope that sanity prevails.

As far as my life, things are extremely hectic. Work is busy as usual, but our family has a whole are busy during the week with various activities. While all of this is going on, I have not even been paying any attention to the market. In fact, preparing for this blog post forced me to open my portfolio and see what was going on! No surprises there, no drastic drops etc.

Lets dive right into the update then.

Dividend Income Received

Sl No.Company / ETF (ticker)Amount
1.Apple (AAPL)$2.20
2. AbbVie (ABBV)$19.96
3.Albertsons Co. (ACI)$1.20
4.Caterpillar (CAT)$1.12
5.Clorox (CLX)$40.42
6.Procter & Gamble (PG)$8.74
7.AT&T (T)$2.12
8.Texas Instruments (TXN)$34.55
9.Verizon (VZ)$23.13
10.Realty Income (O)$11.37
11. STAG Industrial (STAG)$3.47
Total$148.28

So a total of 11 companies contributing to the final monthly income of $148.28. At the same time last year, I earned a grand total of $12.86. So that represents an YoY increase of nearly 1053%! While that is great, I do realize that such growth is expected at this relatively early stage of my dividend growth journey. I am also trying to track the percentage of my dividend income earned through shares bought via DRIP strategy (i.e. purely organic growth as opposed growth through the capital I am investing). Unfortunately, it is a little tricky since I was initially using M1 Finance as a brokerage early last year which does not have a traditional DRIP service available like with the big-house brokerages like Fidelity (my current brokerage) or Schwab. M1 uses a pooled-dividend strategy. It is something that I need to put some further thought.

My largest dividend payment came through Clorox closely followed by Texas Instruments. Both are top-tier companies in the my portfolio allocation strategy. I am especially interested in Texas Instruments at present, especially considering the situation in Eastern Europe and its impact on the semiconductor industry.

Buys and Sells

No sell activity during this period.

As far as buys, I added to my following existing holdings: Texas Instruments, T Rowe Price Group and Whirlpool. These were larger tranches weighted in accordance to the category of the portfolio.

I also add a smaller tranche of Clorox, mostly because I believe in this business and the quality of the products. I think the dividend is safe and I do not see this company going away soon, atleast in my life-time. The other company that I was tempted to buy but resisted was 3M (ticker: MMM). With this one, while the current dividend is safe and the stock is attractively priced, I am not sure about the growth prospects in the near term. I am also paying close attention to how the management is going to wade the company through these troubled waters in the next couple of years. This will go a long way in terms of my belief in the company and its overall growth prospects. So far, it has been a mixed bag and hence I am circumspect.

Summary

Another month is in the books. I am chugging along in my dividend growth investing journey and staying invested even in these turbulent times in the market. What about you? How did your month go? Are any of the companies listed above in your portfolio as well? What are your thoughts? Please drop a comment and let me know.

Monthly Income Update – January 2022

My fellow investor friends and readers, I have been on radio silence for the last couple of weeks. There are a couple of reasons. My extended family were continuing to grapple with some health issues which are now, thankfully, progressing well towards recovery. The second reason is weather. My nick of the woods has experienced a couple of winter storms in the last few weeks. The more recent one resulted in school closures, power outages etc. The city that I currently stay at does not typically see this kind of weather. When we had a similar winter storm last year, we saw record snowfall, something which the city has not seen in over 100 years. To give you some idea as to how bad the situation was: last year’s winter storm left me and my family without drinking water and power for nearly 4-5 days. Roads were blocked due to heavy snowfall, grocery stores were short on stocks because people were panic-buying and there was no gas at the gas stations because of lack of supply. The winter storm also destroyed my gas water heater and I had a cracked window. Several houses in the neighborhood were without water even after supply was restored because of burst water pipes on the outside of the homes due to winter freeze.

All of this was a nightmarish experience. So this time around we were well-prepared and thankfully able to weather the storm much better.

And while all of this was going on, January was seeing some crazy market swings with the S&P500 dipping the most since March of 2020 when news of the pandemic first hit us. The high-flying growth stocks, especially in the tech sector, were getting crucified. We are also in the midst of an earnings season, with so much activity around some of the holdings in my portfolio. I am yet to digest all of this, but initial quick readings show that my holdings are doing just fine.

While I was briefly on Twitter, I was seeing several folks with tweets that could be summarized as “the market has gone red, BUY THE DIP!”. So naturally, I took the opportunity to quickly scan my portfolio and see if there were any such opportunities. And while there were some interesting opportunities, it was certainly not the “market crash like” moment that it was being touted as. I really enjoy interacting with fellow investor folks on Twitter, but honestly, there are also times when I find logging on Twitter to be incredibly distracting and sometimes downright annoying.

Here is an example of a tweet:

I get the need to want to “engage with the fintwit community”, building your follower base, and wanting to show that you are active etc. but honestly what is the point of tweets such as these? And we keep seeing these over and over and over again from multiple folks. It can be mind-numbing at times..

Ok where was I? Oh yes….this is supposed to be a monthly income update, and the first one of the year! So lets get right into it.

Dividend Income Received

Company/ETF (ticker)Amount
1.Pepsi Co. (PEP)$8.65
2.JP Morgan Chase (JPM)$9.05
3.Realty Income (O)$11.33
4.CareTrust REIT (CTRE)$6.2
5.Digital Realty (DLR)$22.29
6.STAG Industrial (STAG)$3.44
Total$60.96

So a total of $60.96 earned through dividends this month, with DLR being the highest contributor. In addition to this, I also earned an additional income of $84.64 through options trading by selling covered calls on stock that I had earned through RSUs through my employer. This puts the grand total of income through investments at $145.60. My income received from January of 2021 was $13.25. So this is some appreciable YoY growth.

Buys/Sells during this month

Since it is the first month of the new year, a large portion of my available capital went towards funding my retirement accounts i.e. mine and my wife’s Roth IRAs. I am already setup to also max out my health savings account and 401(k) accounts at this time. The remaining capital was deployed towards the following buys:

  • TROW : T Rowe Price Group saw an appreciable stock price drop during this last month. If we extend this time frame to the last 6 months, the stock has dropped by almost 30%. What is interesting is that none of the fundamentals, AFAICT, have changed. The earnings were decent and assets under management continues to grow. I will gladly accept what Mr. Market is offering right now.
  • Small tranches of MSFT, V and TXN: During mid-January, when pretty much all tech stocks were being crushed, MSFT dropped below $280. While this was no-where near my estimated fair value, I took this opportunity to add to my position. This is a phenomenal company and I am prepared to buy it at these prices. Similar story with Visa. All that nonsense of Amazon stopping to accept Visa credit cards in UK, created a fantastic buying opportunity back in Dec(?) of 2021. And while everyone was focusing on MSFT and its proposed acquisition of Activission Blizzard (ticker: ATVI), Texas Instruments (ticker: TXN) delivered another stellar quarter with double-digit growth.

Watchlist

I am taking a serious look at MMM and CLX. CLX delivered an underwhelming quarter, which drop in margins and a bleak outlook. The stock has dropped by almost 12% post its earnings release. None of this was particularly surprising. Inflation was bound to take its toll and also all the momentum gained during the pandemic is now vanishing as expected. However, this remains a solid business with superior brands that are not going to go away anytime soon.

Then we come to MMM, which was hit with a $110 mill federal jury verdict over its allegedly faulty CAEv2 earplugs. The stock plunged as a result. While this is indeed worrying news in the short-term, I am not as concerned about the company itself from a long-term perspective.

Summary

So another month is in the books. And if this month is any indication, we might be in for a volatile ride in the coming few months. Exciting times! ๐Ÿ˜€

Monthly Income Update – December 2021

First up, I want to wish all my readers a very Happy and Prosperous New Year! I hope you are looking forward to achieving your goals for the upcoming year and chalking out your own path towards financial independence. I am very excited about the upcoming year and I have a lot of plans about things to learn to further my education as a dividend growth investor. This blog is going to be a large part of this journey and I hope to use it as a medium to share and learn with all of you.

2021 was a great year in terms of my progress as a dividend growth investor, but it was mentally and emotionally draining for me and my family. The early part of the year saw non-COVID related health issues resulting in hospital visits for some of my extended family members. We had to travel out of the country due to an emergency, and had to travel back later just when the Delta-variant was peaking. December saw another such non-COVID health issue resulting in another hospital visit with some other extended family member, this time during another COVID variant at its peak (Omicron).

Thankfully, things are getting back some kind of normalcy. But the whole of last year has been a reminder regarding the importance of health and how fickle life can be.

Anyway, let us talk about something positive. This is supposed to be a monthly income update post, after all. And no better way to close the books on 2021 than to report the dividends earned during the final month of the year.

Dividend Income Received

Company/ETF (ticker)Amount
1.Aflac Inc. (AFL)$11.22
2.Church and Dwight (CHD)$2.02
3.Duke Energy (DUK)$4.93
4.The Home Depot (HD)$8.28
5.Johnson and Johnson (JNJ)$31.80
6.Lockheed Martin (LMT)$46.42
7.3M (MMM)$28.12
8.Microsoft (MSFT)$4.96
9.NextEra Energy (NEE)$1.55
10.The Southern Company (SO)$10.56
11.Target (TGT)$2.17
12.T Rowe Price Group (TROW)$5.96
13.UnitedHealth Care (UNH)$2.91
14.Visa (V)$2.25
15.ExxonMobil (XOM)$2.64
16.Realty Income (O)$10.78
17.STAG Industrial (STAG)$3.31
18.Schwab US Dividend Equity ETF (SCHD)$26.50
19.iShares Core Dividend Growth ETF (DGRO)$5.75
Total$212.13

So a total of 19 contributors to dividend income generated $212.13, a record number for my portfolio. My monthly dividend income from Dec. 2020 was about $20.14. As one can see, the YoY dividend income has grown by 10x, which is quite staggering! LMT was the largest dividend payer this month, not surprising because I heavily bought this during the last few months.

It is important to highlight this once again: this was $212.13 for which I did not even have to lift a finger. My only contribution was some upfront research in high quality companies, purchasing them at reasonable values and then ignoring all the other noise either because they will cloud my judgement or because I simply do not have the time to follow the noise (aka “news”). My goal with sharing this information is not to brag about my progress, but rather to motivate you by demonstrating the power of this strategy.

At this stage of my dividend investment journey, the growth is very much due to capital being invested from my end, rather than organic growth due to dividend increases. But based on my future projections and my conviction in the companies I am invested in, I am well on track to see the dividend snowball take effect in a few years from now.

Buys/Sells during this month

As I stated earlier, this month was emotionally draining due to family members and their health issues. I did not have time to even look at my portfolio during this time. Any remaining free time was reserved for the family in holiday activities and some much needed cheer for all of us.

During the early part of the month, I did add to my MMM position, as that was the only stock I could find at a reasonable value at that time. All the other transactions where DRIPs.

No sells during this month.

Summary

So that is a wrap on 2021. It has been a rollercoaster of an year, but I am very hopeful and excited about the upcoming year.

I will end this post with some friendly advice: spend as much time as you can with your loved ones i.e. your family and friends. Life is short and any moments you have together are just priceless and irreplaceable.

My best wishes to all of you. Take care. Stay safe and healthy!

Monthly Income Update – November 2021

We are almost at the doorstep of a new year and I am waking up to the nice fall color hues thanks to the two red oak trees in my backyard. Some nice hot tea after breakfast and counting all the dividend checks I have received this month…what more can I ask for! ๐Ÿ™‚

I am very thankful to have a loving and caring family, a stable and well-paying job and a lovely community of friends around me.

Dividend Income Received

Company/ETF (ticker)Amount
1.Apple (AAPL)$2.20
2.AbbVie (ABBV)$18.20
3.Albertsons Companies (ACI)$0.84
4. Caterpillar (CAT)$1.11
5.Clorox (CLX)$38.98
6. Costco (COST)$2.37
7.Procter & Gamble (PG)$7.83
8.AT&T (T)$2.08
9.Texas Instruments (TXN)$8.05
10.Verizon (VZ)$14.63
11.Realty Income (O)$9.83
12.STAG Industrial (STAG)$3.30
Total$109.42

So a grand total of $109.42 for this month from a total of 12 companies. At the same time last year, I had earned a whopping total of $9.37. The YoY growth in monthly dividend income is staggering. The key here is that this was $109.42 that I earned passively by simply choosing to invest in high-quality companies, while I focus on my daily 9-5 job and family responsibilities. This is the power of dividend growth investing and why it is the ideal strategy for my specific situation.

Buys/Sells during this month

As always, there is never a dull moment in the world of finance. During this month, news regarding the Omicron COVID variant broke out and that triggered a mini sell-off. Then there the news regarding President Biden’s move to reappoint Jerome Powell as the Fed chair and then the latter’s bizarre statement regarding his previous stated position on “inflation being transitory” and how he now wanted to retire the word “transitory” when describing inflation. Huh?

While all of this was causing movements in the markets, I was simply keeping an eye on any opportunities to buy. Among the opportunities, I added to my Visa (ticker: V) position. There was a slump in the stock price thanks to Amazon UK’s announcement that they will not be accepting payments made through Visa credit card. Fintech, in general, was getting hammered with similar slumps in stock price for Mastercard (ticker: MA), Paypal (ticker: PYPL) etc.

I also used the opportunity to add to my positions for Johnson and Johnson, 3M and Verizon as they had creeped below my cost basis.

Big Buys: V, JNJ, MMM, VZ

“Staying in the game” purchases: AFL, PG, PEP.

The โ€œstaying in the gameโ€ purchases are simply dollar-cost averaging into the stocks since the threshold for number of days since the last purchase made had expired (threshold configurable based on the category of the holding in my spreadsheet setup). The tranche size is dependent on the current valuation of the stock in question (i.e. smaller tranche size for an overvalued stock).

I had no sells during this month.

Summary

So there you go, another month is in the books and we are all getting ready to bid 2021 adieu and welcome 2022. Hopefully this new year will bring us good news as far as dealing with this pandemic is concerned.

I wish all my readers here a very happy holiday season. Here is wishing you in advance a Merry Christmas and a very Happy New Year!

Stay safe and healthy!

PS: You can now also connect with me on Twitter @LifeWDividends.

Monthly Income Update – October 2021

I have been relatively quiet on my blog for the last couple of weeks. This is for a few reasons: I had to take care of a few projects around the house that had been pending from a while. I finally got around to checking one of big projects from this list a couple of weeks back. Apart from that, work and family responsibilities have made things incredibly hectic leaving me with very little time in the day to even look at my portfolio or follow investing news.

Not that any of this is a problem. My investing strategy is catered for such situations. It is one of the primary reasons why I rely on dividend growth investing. I can focus on my life while my investments take care of themselves and generate a steady cash flow.

October was supposed to be a “slow” month for me in terms of dividend income. This is yet another aspect that does not worry me one bit. I do not invest in companies with an eye on their dividend payout dates. When a company ends up paying dividends is immaterial as long as they maintain the frequency and also keep up with their periodic increases. It all averages out eventually.

Okay, enough talk. Lets get into the update itself.

Dividend Income Received

Company/ETF (ticker)Amount
1.JP Morgan Chase (JPM)$9.00
2.Realty Income (O)$9.33
3. STAG Industrial (STAG)$3.05
4. CareTrust REIT (CTRE)$5.34
Total$26.72

So 4 companies contributing a total of $26.72 for the month. At the same time last year, I had a grand total of $1.27 for dividend income. So the YoY growth is still quite appreciable. $26 might seem very disheartening at this stage. After all, that is not going to be helpful in paying any bills. But as I have illustrated in one of my previous posts, it is not the present cash flow that I am focused on, rather it is the future cash flow.

While there was nothing much to write about in terms of dividend income, there has been plenty of action and news to follow and I have been skimming over that whenever I had a chance.

Dividend Increases

With the Q3 earnings in full flow during this month, I was keeping a track of certain companies and their expected dividend increases. The following were of interest:

  • Albertsons Companies (ticker: ACI): ACI went public around mid 2020 after several years of delay. It was a speculative bet and so appropriately placed in that category of my portfolio. That said, I was familiar with the chains covered under this company including the Albertsons, Safeway and Randalls grocery stores and a fairly good understanding of their business itself. My evaluation deemed this as a interesting value opportunity and I initiated a position late last year. I am happy that I did, I have more than doubled my investment since then. ACI announced a 20% increase to their quarterly dividend. I will be “promoting” this position from the “speculative” to the “growth” category as I think the management is steering this business in the right direction
  • AbbVie (ticker: ABBV): I wanted to pay close attention to ABBV’s debt profile and see if things were on track from their Q3 report. They were. And, as expected, ABBV announced a 8.5% increase to their quarterly dividend.
  • Visa (ticker: V): The next double-digit hike came from V. A nice 17.2% quarterly dividend hike. Nothing much to say here. Just solid quarterly results as expected.
  • ExxonMobil (ticker: XOM): And the final increase of a whopping 1% from the “Big Oil” giant, ExxonMobil. This was done to maintain its dividend aristocrat status. Am I disappointed? Nope! I understand why the management is doing it and I would be happy if they can use their cash flow to pay down debt. And the fact that management is committed to its dividend policy even after one of the worst oil markets, speaks a lot to me.

Other news

Realty Income announced the completion of its merger with VEREIT (ticker: VER). Realty income also announced the spin-off of its office-related assets into a new REIT called Orion (ticker: ONL). The arrangement is such that for every 10 shares of O held, the O stockholders would receive 1 share of ONL. At present, I plan to simply sit on these newly received shares of ONL and decide at a later point in time regarding what I would like to do with them.

Buys and Sells during this month

Big buys: VZ, LMT, CLX, JNJ

Staying in the game purchases: MMM, AFL, PG, CTRE, DLR, DGRO, O, SCHD, STAG

No sells during this period.

LMT dropped appreciably during this month after their lower guidance post their earnings call. This created a buying opportunity. VZ and JNJ also saw a dip. These are at close to reasonable value for me, so I decided to add to my positions. Similarly, CLX continued its “reversion to mean”. I was happy to buy and add more at these prices.

The โ€œstaying in the gameโ€ purchases are simply dollar-cost averaging into the stocks since the threshold for number of days since the last purchase made had expired (threshold configurable based on the category of the holding in my spreadsheet setup). The tranche size is dependent on the current valuation of the stock in question (i.e. smaller tranche size for an overvalued stock).

Summary

Another month is in the books. I plan to get back to more regular writing on the blog, time permitting of course. I am re-reading Peter Lynch’s One Up on Wall Street again. So I hope to cover that through a book review in one of my future posts.

Thank you for reading thus far and drop a comment to let me know how your month went by.

PS: You can now also connect with me on Twitter @LifeWDividends.

Monthly Income Update – September 2021

Another month is in the books. We are into the fall season here in the States: the days are getting shorter and I have had to get the rake out to collect all the dry leaves shed by the oak trees in my back and front yards. Work has been crazy and weekends are reserved for time with family and household chores. All in all, it is a busy life at present. But those dividends….those dividends are coming in thick and fast. How did I do this month? Let us get into the update and find out!

Dividend Income Received

During this month, I received income from the following companies/funds:

Company / ETF (ticker)Amount
1Aflac (AFL)$9.05
2Church & Dwight (CHD)$1.69
3Duke Energy (DUK)$5.61
4The Home Depot (HD)$6.60
5Johnson & Johnson (JNJ)$13.78
6Lockheed Martin (LMT)$10.40
73M (MMM)$10.36
8Microsoft (MSFT)$1.83
9NextEra Energy (NEE)$1.54
10Pepsi Co. (PEP)$6.45
11The Southern Company (SO)$9.61
12Target (TGT)$1.81
13T. Rowe Price (TROW)$5.40
14UnitedHealth Group (UNH)$2.90
15Visa (V)$0.36
16Waste Management (WM)$0.58
17ExxonMobil (XOM)$3.46
18Schwab US Dividend Equity ETF (SCHD)$21.99
19iShares Core Dividend Growth ETF (DGRO)$4.04
20Realty Income Corp. (O)$8.80
21Digital Realty Trust (DLR)$15.21
22STAG Industrial (STAG)$2.68
Total$144.15

So a total of 22 companies/ETFs contributed towards the monthly income of $144.15. This has been a record-breaking month where my monthly income figure touched new highs. At this time last year, I had received a monthly income of $9.97. That is some stellar year-over-year growth! While these growth numbers are expected to slow down as progress in my dividend growth investing journey, it is early momentum that counts at this point. Seeing the strategy working its magic serves as a motivation to continue along this path towards the eventual goal of financial independence.

Buys and Sells during this month

September was a busy month. The overall market, and I am using the S&P 500 as a reference, saw a drop of almost 5%. A quick skim of the news showed that the sell-off was due to rumblings in China about Evergrande, a large property developer in that country, facing a default of about $300 billion. There were several folks making references to the 2008 financial crisis and why this could be another “Lehmann brothers” moment. It almost seems like China is always on the news here in the US about something or the other. We are continuing to see stocks from other Chinese companies such as Alibaba (ticker: BABA) tumbling due to fear of government regulation.

In general, the markets going red represents a great buying opportunity. As a dividend investor, this is even more critical as it can help me lower my overall cost-basis and thereby improve my yield-on-cost. Among the opportunities, I noticed that ABBV, LMT and CLX were particularly attractive. ABBV’s drop was related to the FDA’s decision to put a label regarding increased risk of heart-related conditions, which could adversely impact RINVOQ, its arthritis treatment drug. CLX continued seeing a reversion back to its pre-pandemic levels.

As far as REITs, I saw some pullback in DLR triggered by news of its 6.25M share offering. So I added to my position there and also grabbed some more O.

Big buys: LMT, CLX, VZ, ABBV, MMM, JNJ, DLR

Staying in the game purchases: O, SCHD, DGRO, STAG, TXN, MSFT, AAPL, V, HD, AFL, TGT, TROW

The โ€œstaying in the gameโ€ purchases are simply dollar-cost averaging into the stocks since the threshold for number of days since the last purchase made had expired (threshold configurable based on the category of the holding in my spreadsheet setup). The tranche size is dependent on the current valuation of the stock in question (i.e. smaller tranche size for an overvalued stock).

I have no sells during this month.

Summary

Overall, I am very happy with my progress here and seem to be on track to achieve my goals for this year. I will be keeping a close eye on the market to see how things shape up and if more value-play opportunities open up.

Thank you for reading thus far and drop a comment to let me know how your month went by.

PS: You can now also connect with me on Twitter @LifeWDividends.

Monthly Income Update – August 2021

Time for one more entry into my favorite category on my blog: my monthly income updates. I cannot explain the thrill of counting and then reporting all of my dividend pay checks at the end of the month. It is really addicting! Tracking the monthly income that the portfolio is generating is perhaps the most important performance metric that I care about. Okay enough talk. Lets get right into it!

Dividend Income Received

During this month, I received income from the following companies:

Company / ETF (ticker)Amount
Apple (AAPL)$1.60
Abbvie (ABBV)$12.16
Albertsons Companies (ACI)$0.79
Caterpillar (CAT)$1.43
Clorox (CLX)$11.50
Costco (COST)$2.38
Procter & Gamble (PG)$6.27
AT&T (T)$2.23
Texas Instruments (TXN)$5.51
Verizon (VZ)$6.96
Realty Income (O)$7.84
Stag Industrial Inc. (STAG)$2.56
Total$61.23

So a total of 12 companies that doled out dividend pay checks to me as a thank you for investing my capital in their business. All of this while I was focusing on my daily life and other responsibilities. During August of 2020, when I was very early into my dividend investing journey, I earned a whopping $1.48. I have a come a long way in this one year span!

As I was going through the process of drafting this post, I saw a news update that Verizon (ticker: VZ) has increased its quarterly dividend by 2% to $0.64 per share. VZ is currently yielding 4.66% on a forward basis. This news was met with mixed response with a lot of investors sounding grumpy about the paltry dividend increase. Personally, I am not too bothered about this. VZ’s balance sheet is loaded with debt at present, most of which is understandable given its recent push into the 5G space. And the telecom sector is a very demanding industry with a lot of capital needed for infrastructure. Given this background, I completely understand the management’s decision to slow down on dividend increases and instead focus on getting the debt under control. VZ is a holding within the bond-like category of my portfolio: great starting yield, mediocre dividend growth and a safe dividend payout ratio. It is doing its role pretty well in my portfolio.

Buys and Sells during this month

August was a relatively quiet month for me in terms of stock purchases. The reason for this is that I was seriously contemplating about whether I was going to continue with M1 Finance as my brokerage for my dividend portfolio. I wrote a detailed post on this subject, mostly for the benefit of any other fellow investors out there who might be contemplating about the same thing. I have now moved my assets over to Fidelity and the move is already paying dividends ( ๐Ÿ˜‰ see what I did there).

One outcome of the move from M1 Finance was that any fractional shares got sold and the resulting capital was moved over as cash into my new created Fidelity account. In general, I never ever want to sell any shares unless something fundamental has changed with the business in relation to why I originally invested in it. But in this case, it is all good since this is for the long-term and I am fairly confident that I will be sticking with Fidelity for a long long time.

Overall, the brokerage switch process was fairly smooth and I was able to chat with a real person at Fidelity to answer any questions and guide me through the process, something that I have routinely struggled to do with M1.

Staying in the game purchases: AFL, JNJ, PEP, PG, CTRE

Other purchases: CLX, O, SCHD, DGRO, DLR, STAG

Positions exited during the brokerage move: SWK, UPS, AVGO

I am not particularly unhappy about exiting the positions above, as these were relatively small positions and had seen a lot of run-up in stock price as a beneficiary of the situation due to the pandemic from last year. I will wait on the sidelines and look for a better entry point with each of these businesses.

How did your portfolio perform this month? Did you break any personal records? I would love to hear from you in the comments below!

Monthly Income Update – July 2021

There is a steady uptick in COVID-19 cases due to the delta variant here in the US. Everyone is hopeful that lockdown restrictions do not return, but the current trend is indeed worrying. While that is ongoing, earnings season is in full swing and the stock market is touching new highs every day. My dividend portfolio keeps cranking along at its own pace generating some passive income for me. How did the portfolio fare this month?

Dividend Income Received

During this month, I received dividend income from the following companies:

Company/ETF (Ticker)Amount
JP Morgan Chase (JPM)$6.53
T. Rowe Price (TROW)$15.65
Realty Income (O)$6.87
CareTrust REIT (CTRE)$4.52
Stag Industrial Inc. (STAG)$2.06
Total$35.63

The dividend income received from TROW was a special dividend declared by the company on the 14th of June. William Stromberg, TROW’s CEO, said the following as a part of the press release for this special dividend announcement: “This special cash dividend is an efficient return of capital to our stockholders and reflects the healthy cash position on our balance sheet. After the special dividend payment, the company’s balance sheet will remain very strong, with ample liquidity to continue to execute on our business strategy. In addition, we believe that the payment of the special cash dividend will not have a material impact on the company’s ability to meet its ongoing financial needs, continue our outstanding dividend record for the foreseeable future, or maintain a buffer against market volatility.”

The other dividend payment from my taxable brokerage account was from JPM. There have been news reports that following the Fed’s stress tests on the major banks in the US, JPM will be hiking their quarterly dividend from $0.90 to $1.00 per share (about a 11% increase). This is still pending approval from the board of directors.

The other payments were from REITs that I hold in my tax-advantaged accounts (HSA, Roth IRA). At the time of writing this, both STAG and O have shown impressive Q2 results.

Bulls/Sells made during this period

I made the following purchases during this month:

Staying in the gameย purchases:ย CAT, JNJ, PEP, SO, DUK, TGT, TROW, UNH, V, VZ, WM, XOM, AVGO, CTRE, O, STAG

Other purchases: AAPL, LMT, CLX, MSFT, TXN, MMM, JPM, AFL, ABBV, SCHD

The โ€œstaying in the gameโ€ purchases are simply dollar-cost averaging into the stocks since the threshold for number of days since the last purchase made had expired (threshold configurable based on category of the holding in my spreadsheet setup). The tranche size is dependent on the current valuation of the stock in question (i.e. smaller tranche size for an overvalued stock).

It is getting very hard to find good value plays in what is an extremely overvalued market.There was a brief period of tech sell-off in July and I used this opportunity to add a few more shares in my Tech pie.

At the time of writing this, CLX just released its Q2 earnings report and missed its non-GAAP EPS by $0.36 and missed revenue by $110M. In addition, CLX also lowered their guidance for organic sales growth and non-GAAP EPS estimates for FY2021. Following this announcement, the stock slid by ~11%. I am hoping that this turns out as an opportunity to add more to my existing position.

I have no sells during this month.

How did your portfolio perform during July? Please let me know in the comments below.

Disclosure: Long all the stocks mentioned in this post.