Dividend Update - January 2015
I've just about got all of my spreadsheets up to date which is good because now it should just be maintenance to worry about.
These dividend updates reflect all dividends that I receive through my investing pursuits. I hope they can help inspire you to take control of your own finances and invest to build a passive income stream. What you use that stream for is up to you, whether it's to fund early retirement, just provide some FI/FU money, or even to provide for an annual vacation; the key is that it can provide options and open up all sorts of possibilities. You can check my dividend income or progress pages to see what dedication to an investment plan can give you.
A new year is wonderful isn't it? It's a fresh start and a new beginning. Last year I made some great strides on building up my portfolio and dividend stream and had great year over year growth from 2013 to the end of 2014. But we're on to 2015 now so let's get into the details of January.
I received a total of $239.31 in dividends in my FI Portfolio in January. Although that's a far cry from the almost $750 from December, it's 60.3% growth from January 2014 and 2.8% growth from October 2014. The quarter over quarter growth is a bit disappointing but year over year showed excellent gains. Even my little Loyal3 portfolio is humming along. I received $11.14 in dividends in January and while that's not much in the grand scheme of things, a lot of little payments will add up to a big total. Plus it was able to fund an additional $10 purchase of one of the companies. I started my Loyal3 portfolio in August so there's no year over year comparison but compared to October 2014 that was 1,060.4% growth! Now I just need to figure out how to do that with my FI Portfolio and I'll be set. In my Roth IRA I received $25.67 during January which represented a 107.2% increase year over year and a 22.8% increase quarter over quarter. The dividends in my Roth IRA give a "purer" view of dividend growth investing at work since I can't currently contribute to it due to reaching the MAGI levels, although I might be able to make a retroactive contribution once I do our taxes for the year.
My forward 12-month dividends for my FI Portfolio actually decreased quite significantly from EOY 2014. I'll detail the reasons why below. At the end of January my forward 12-month dividends stood at $5,172.75. The forward dividends in my Loyal3 portfolio increased slightly to $54.60 which brings my total taxable accounts forward dividends to $5,227.34. My Roth IRA's forward dividends increased slightly to $253.82 thanks to reinvestment of all dividends received in that account. I don't have any goals set yet for dividends received for the year or forward dividends by the end of the year because there's just way too much in flux right now as far as income and expenses to be able to come up with a realistic forecast. I'm hoping to try and make a guesstimate sometime later this month or early next month and get some goals out to get me through at least the first half of the year. By the second half of the year I expect to have more clarity on the income/expense side of the equation to have a better idea of what possible investment capital I'll have coming my way.
There were two big reasons why my forward 12-month dividends decreased from December 2014 to January 2015. One was the closing of my position in Lorillard (LO). I had originally set the sell limit order back in 2014 and forgot that I had left it as good til cancelled but on January 13th the limit order triggered and the deed was done. I wasn't excited about the Reynolds deal so I decided it was time to take my profits and invest the proceeds elsewhere. I initiated the position in March 2013 and was able to earn a 59.5% capital gain as well as the dividends along the way. The proceeds from this sale came to $1,963.52 after taking out commission but before taxes. This reduced my annual dividends by $75.40.
The other big drop was due to my position in American Realty Capital Properties (ARCP). They announced that their juicy monthly dividend was being dropped all the way to zero. This decreased my annual dividends by $192.36. When the accounting mishaps were first announced last year I debated selling out of my position, but decided to wait for the dust to settle to see what happens since the dividend was in tact. However, things have changed and the dividend has since been cut to zero and it's been announced that the dividend once, if?, reinstated will be in line with peers. I take that to mean something in the 4-6% yield range which based on the current price would be just $0.465 annually which is over a 50% cut. Surprisingly the share price didn't react much to the news as it was about in line with where most people expected.
So now I'm at a crossroads with my position in ARCP. There's still a lot of questions regarding the accounting scandal that should hopefully be answered soon and conservative management, if they ever get that in place, should be able to right the ship given the massive quantity of properties that they own. The question now is whether it's worth the potential for more negative news about the accounting issue, whether the company and the dividend will be "safe" once things settle out, what will the future dividend growth even look like, and is it worth the headache of dealing with what will probably still be a fairly volatile stock. I'm willing to give new management time to correct the course but there's also other REIT options that I'm interested in that have less question marks with comparable yields to where ARCP's will most likely end up. I need to do a bit more research about the company as I'm not 100% convinced which route is the best, sell or hold. So, I'm asking for some help from you guys. What's your opinion on ARCP?
Below is the chart showing the monthly dividend totals for each year that I've been investing as well as the monthly average. It's not always an increase as some companies have weird payout schedules and eventually some positions will get dropped, but the long-term trend is what matters. There's not much to compare to just based on the monthly average so far for this year since we're only one month in but the rolling 3-month average is at $447.27. That's a very solid $68 per month increase from my 2014 monthly average and a $2 increase from the 4Q2014 average of $445.07. With more contributions/investments and expected dividend increases the gap should continue to widen.
|EOG Resources (EOG)||$1.36|
|Phillip Morris (PM)||$62.61|
|Realty Income (O)||$16.82|
|General Electric (GE)||$39.38|
|Baxter International (BAX)||$20.28|
|Company||Dividend Amount||DRIP Shares|
|JP Morgan Chase (JPM)||$8.69||0.156|
|Phillip Morris (PM)||$12.41||0.152|
I've updated my Dividend Income page to reflect January's changes.
How did your dividends do in January? Start the new year off on the right track?