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Thursday, May 31, 2018

Dividend Income Update - May 2018

May is starting to shape up as a solid month for my dividend income. It is still far away from June, but it is getting up there. Even after four years of dividend growth investing, my YOY (year over year) increases are still very good. I know they will slow down eventually, but my own investing and dividend increases have kept the number high. I'm so glad I found this strategy of minimizing spending and investing in dividend growth stocks. It has truly been amazing to see the results. 


Without further ado, here are my results for May 2018:


ANHEUSER BUSCH INBEV BUD $15.06
WILLIAMS SONOMA WSM $9.46
STARBUCKS CORP SBUX $5.40
APPLE INC AAPL $8.76
PROCTER & GAMBLE PG $11.48
OMEGA HLTHCARE INVTS REIT OHI $21.12
MAIN STREET CAPITAL MAIN $4.94
KINDER MORGAN INC KMI $7.20
ABBVIE INC ABBV $35.52
ENTERPRISE PRODUCTS LP EPD $15.39
CVS HEALTH CORP CVS $6.50
VERIZON COMMUNICATN VZ $57.82
GENERAL MILLS INC GIS $7.84
A T & T INC T $43.00

This month I received $249.48 in dividend income!

This is up from $186.06 for May, 2017.

This represents a 34.1% increase YOY!

It is amazing to see these kind of results after only four years of investing. This is a tangible amount that could be used to pay for my food bill for the month and more! Now, I'm not using the money to pay for bills yet and instead I use it to buy shares of other dividend growth stocks, but you can see how it is a solid  number. Can you imagine the amount of money I'd be getting if it was all in my checking or savings account? Maybe a few bucks a month? 

June should be an incredible month for me and I'm looking forward to sharing those results with you all as well. 

Let me know what you guys think! How did you guys do in May?

Thursday, May 24, 2018

There Are No Guarantees In Life

Nothing in life is guaranteed. One of the reasons why I love dividend growth investing is because it will allow me to retire early. I will be able to do anything I want at that point. I may still work, but I would find something that I truly love and wouldn't have to worry about the salary. The idea of working until you are 65 and then retiring is antiquated. Even with the average lifespan increasing, there is still a possibility of not making it until 65. I don't mean to sound pessimistic, but I'm just looking at the realities of life. My girlfriend's mom passed away before she was 55. She was healthy and it was just a freak thing that happened. I want to be able to enjoy life while I'm still young. Even if I ended up retiring at 50 I would be happy. That is still way better than 65.

Now how does this relate to dividend growth investing? Well nothing in life is guaranteed, but dividends can be very close to a sure thing. A lot of people I talk to about dividend growth investing always say, "well a company could stop paying a dividend at any time." While this is a possibility, the right dividend stocks will continue paying dividends well into the future. I then provide them with examples of certain companies that have been paying and increasing dividends for 10, 20, 30+ years. These companies include Proctor & Gamble (PG), Johnson and Johnson (JNJ), and 3M Company (MMM). There are many more, but these are just a few.

I also don't really care if one or two companies stops paying a dividend or cuts a dividend. That is where diversification comes into play. I've been investing for over four years now and I haven't had one company stop paying me a dividend. I've had a couple companies decrease their dividends, but they have continued to pay and some have started increasing their dividends again.

Even with all the market turmoil over the past four months, these companies have continued to pay me. 

These dividends that continue to accumulate also mitigate risk if a company were to go bankrupt in the future. A great example is my first dividend investment in Verizon (VZ)

On March 14th, 2014 I bought 75 shares of Verizon for $46 a share. 


Verizon is a relatively boring company in the sense that they are not super innovative and cutting edge, but they have a good network and a lot of customers which means they have a good amount of revenue. They have a lot of competition and they don't usually stray too much from earnings estimates. 

The price of their stock has been very underwhelming up to this point, but I still believe in their long term value and their dividend is very attractive. 

When I first purchased the stock their dividend yield was around 4.65%

Their yield now is around 5% and my yield on cost is at about 5.10%

I like to keep track of all my dividends received per company and Verizon has paid me $720 so far! This is a huge number for four years of owning a company. This has guaranteed me a return on the stock. If tomorrow their stock price went to 0, I would have at least come out with $720. If they continue to grow and pay their dividend and stay in business for even just a few more years then I'll have an even higher guaranteed return. I'm betting they will be in business for more than a few more years though... 

This is why I love dividend growth investing. When you invest in these high quality dividend growth stocks you are basically getting a guaranteed return on your money. A lot of people are afraid of investing for fear of losing money. Unless you are investing in risky companies with no dividend then there really isn't a good chance of this happening at all. Can I say there is a 0% chance of this happening? No, but the number is very, very low. 

So far I've made close to $7,000 in dividends from all the companies I own. This is real money that I've used to buy more stock. This number will only compound and grow exponentially. Eventually, I will have made $40,000+ in dividends in just a few more years. Dividend growth investing is a real strategy that does work. If you invest in high quality dividend growth stocks you can create a real passive income stream that you can use to cover your expenses. 


What do you guys think? Let me know!

 

Wednesday, May 9, 2018

Recent Buy: General Mills Inc. (GIS)

I was able to make a purchase right away in May, but I fear I may be able to make only one or two more purchases over the next couple of months. I have a very large and important purchase coming up for my girlfriend of four years. I'm sure you can guess what it is... I haven't really been saving up for this and need to start. I will use about half of my savings and then the rest will be put on a credit card that will have about 6 months left of 0% APR. 




One could argue that I should have been saving up for this earlier, but that would have meant missing out on many great buying opportunities. To be fair I've been trying to build up my checking account base value for quite some time now, but with the market being down for four months it has been hard to not invest.  One could also argue that I could sell some stock to pay for this, but I'd rather just not invest for a few months instead. I will still be contributing to my Roth 401k and my Acorns account. With my employer match this will still be around $800 a month into my 401k and about $100 a month into my Acorns account. 

With that being said, on May 3rd I was able to purchase 25 shares of General Mills Inc. (GIS) for $41.07 a share. This purchase adds $49 of yearly dividend income to my portfolio!

General Mills is an American multinational manufacturer and marketer of branded consumer foods. Its brand portfolio includes more than 89 other leading U.S. brands. Their products can be found in just about any grocery store you walk into. 

General Mills has really struggled lately as the shift towards healthier and more organic foods sweeps the country. However they already have many healthy and organic products already and will continue to shift in that direction if the market dictates so. They also recently purchased Blue Buffalo which is a natural and healthy dog food. Again, the pet industry is a large and growing industry which will allow General Mills to capitalize on their purchase of Blue Buffalo.

I feel that they are undervalued as they have been one of the worst stock performers over the past few years. 

Some quick facts about General Mills:
  • EPS of 2.877
  • P/E of 14.70
  • Dividend Yield of 4.63%
  • EPS growth as follows
    • 1 year - 6.7%
    • 3 year - (-0.6%)
    • 5 year - 3.3%
  • Dividend growth rate as follows
    • 3 year - 7.4%
    • 5 year - 9.5%
    • 10 year - 10.3%
  • Dividend Payout Ratio at 68%
Now the EPS growth hasn't been stellar, but this is a food company that has staying power.  There has been trends of eating healthier and going organic, but I believe General Mills will be able to shift in that direction as they already have many products that are healthy and organic. There has also been trends of eating out more, but eating out is way more costly than buying foods at the store and I don't think that is a lasting trend. People will figure out that advantages of preparing and cooking food at home. You also can't have a family and eat out every meal. 

The yield at these levels was too good to pass up and I'm willing to buy more if it continues to drop. 

This might be my last purchase until July or August, but I hope to free up some cash in the next couple of months. 

Let me know what you guys think! 

Thursday, May 3, 2018

Dividend Income Update - April 2018

April is one of my lower months in terms of dividend income. It is included with those other three months (Jan, Apr, Jul, Oct) that are my four lowest months of the year. I don't buy stocks based on the months so this is just how it has worked out. Most companies end up paying dividends in March, June, September, and December. Thus my results are usually skewed with those being my four largest months by far. 



Nevertheless, what I really care about is year over year (YoY) increases. As long as the months continue to grow at a solid rate then I will be happy.  

The companies that paid me this month are as follows:


TORONTO-DOMINION BK F TD $10.98
JPMORGAN CHASE & CO JPM $10.08
SYSCO CORPORATION SYY $7.20
BANK OF NOVA SCOTIA F BNS $10.82
GENERAL ELECTRIC CO GE $5.64
CISCO SYSTEMS INC CSCO $22.11
WESTERN DIGITAL CORP WDC $4.50
MAIN STREET CAPITAL MAIN $4.94
CARDINAL HEALTH INC CAH $14.33
PHILIP MORRIS INTL PM $20.33
DIAGEO PLC DEO $14.00
ALTRIA GROUP INC MO $10.50
HP INC. HPQ $9.47
KIMBERLY-CLARK CORP KMB $16.00
NIKE INC CLASS B NKE $2.80
COCA COLA COMPANY KO $28.47

This month I received $188.90 in dividend income! 

This is up from $137.75 for April, 2017. 

This represents a 37.13% increase YoY!

Now again this is one of my slowest months in the year, but the YoY increase is great. I know these YoY increases will start to slowly go down, but if I can continue getting numbers close to this I will be happy. 

This progress is proof that anyone really can do well from dividend growth investing. Even if I didn't invest another dollar I would still have YoY increases just because these companies are routinely growing their dividends. These increases tend to be anywhere from 5-20% a year depending on the stock. 

With the continued market weakness I may even be able to beat those YoY increases just because my money is going farther now. As the market declines the yields all rise and I've been able to double down on stocks I bought 3 years ago for cheaper prices and (you guessed it) higher dividends. 


How did you guys do in April? Let me know!

Wednesday, May 2, 2018

Portfolio Update - April 2018

Another stagnant month this year as the market volatility continues. Luckily for me Facebook (FB) had a good quarter and recovered a good amount back from the losses due to privacy concerns. The increased market volatility makes it hard for investors who are looking for short term gains or investors who make their money day trading stocks. However, for those of us who are in it for the long term this represents a continued opportunity to pick up shares at a discount.

After two months in a row of my portfolio decreasing in value, I finally saw a positive gain. Never before have I had a decrease in my portfolio's value until these past two months. It is pretty incredible that I went 4 years without seeing a decrease in the value of my portfolio. 

This April I saw my portfolio value increase by $6,020.14 or 3.14%
My current portfolio value sits at $197,469.09

It was nice to finally see my portfolio go back up after two months of decreases. However, I really don't care about the value of my portfolio as long as the dividends continue to be paid and continue to increase. Guess what? I haven't suffered any dividend cuts in these three months of market volatility and in fact I've seen a large number of dividend increases. This just goes to show you that this is all just short term noise that doesn't affect long term goals. 

I was fortunate enough to invest twice in April and raise my dividend income. The first purchase I made was on April 2nd. I purchased 5 shares of 3M Company (MMM) at $210.70 a share. Unfortunately they got hit hard after their earnings and the stock has retreated about 8% since then. But, I've always wanted to own a piece of this company and finally pulled the trigger and will think about buying more at these discounted prices. 

The second purchase I made was on April 6th. I purchased 15 shares of Dominion Energy (D) for $66.90 a share. Again, this has been a stock that has been beat up lately and their current dividend is just too good to pass up. This is an essential energy company that has real staying power. They provide energy for many different regions, but the one big region is here in Northern Virginia. I use Dominion Energy because I have no other choice in the matter. I need electricity and they are the only option. 

These two purchases added $77.30 to my yearly dividend income! My purchasing power has simply been increased due to the market volatility. I welcome the volatility with open arms because of this. If two monthly purchases can routinely add this much dividend income per month then I will be reaching retirement much earlier than anticipated!


Let me know what you guys think! How did you guys do in April?

The portfolio page has been updated to include all of my stocks and additional holdings.