Thursday, August 4, 2016

Dividend Update - July 2016

dividend growth investing, stocks, financial independence
Dividend Update - July 2016

It's the end of one month and the beginning of another so it's time for my favorite update: my dividend update.  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.


The second half of 2016 is officially underway and admittedly it's a bit disappointing to see the huge drop in dividends received compared to June.  However, the cash flow is what matters and it all works out in the end.  In July I received $239.55 in dividends in my FI Portfolio.  I also received an additional $10.75 in my taxable Loyal3 Portfolio.  My Roth IRA generated $24.46 in dividends during July.  Across all 3 accounts, excluding the effect of taxes, July's dividends totaled $274.76.

Be sure to check out the infographic for July 2016's dividends and let me know what you think!

FI Portfolio

My FI Portfolio showed a 10.5% decline from the previous quarter and an equally disappointing 10.6% decline year over year.  That's not exactly the idea behind dividend growth investing, so what gives?

If we look back at the dividends paid in April the decline is easily explained.  The biggest explanation for the decline is due to Wal-Mart Stores (WMT) paying a dividend in April, but not in July.  That accounted for nearly $32 of the difference.  The rest was out of my control and attributed to currency exchange from my two Canadian bank holdings, Bank of Nova Scotia (BNS) and Toronto-Dominion (TD).  On an adjusted basis dividends showed a 1.6% improvement quarter over quarter.

The year over year comparison faced a similar issue.  July 2015 had additional payments from W.P. Carey (WPC) and Baxter International (BAX).  Those positions have since been closed leading to no dividend payments from those positions this year.  If we back out those two payments from the year ago period the change improves to a decent 4.8% increase.  The relatively small adjusted increase was due to the currency exchange issues from some of my holdings as well as a small dividend increase from my largest payer of the month, Phillip Morris International (PM)

The year to date period from 2016 compared to 2015 still shows a small 0.5% decline.  Thus far in 2016 I've received $3,077.68 in dividends within my FI Portfolio.  The small decline is due primarily to positions being closed that paid dividends in periods other than July 2015.

Loyal3 Portfolio

On the surface my Loyal3 Portfolio comparisons were all over the place.  Compared to Q2 dividends showed a 48.1% increase while year over year there was an 84.5% decrease.  Talk about some big swings, although they're easily explainable.

The huge improvement from Q2 was due to the semi-annual payment from Walt Disney (DIS) that was paid in July but not in April.  Excluding the Disney payout dividends in July were flat compared to April since no additional capital has been invested, no dividend reinvestment occurred and there were no dividend increases between the two.

The year over year decrease was due entirely to the special dividend paid in July 2015 when Kraft Foods merged with Heinz to form The Kraft Heinz Company (KHC).  The one-time special dividend from the merger amounted to an additional $59.39 in dividends received in July 2015.  Excluding the special dividend from last years total the year over year comparison jumps to a solid 7.8% increase which was all organic dividend growth.  Not bad at all.

Year to date through July 2015 I had received $39.98 in my Loyal3 Portfolio, excluding the special dividend.  Year to date for 2016 I've received $41.32.  That puts the year to date comparison at a solid, but unspectacular 6.0%.

Roth IRA Portfolio

My Roth IRA portfolio gives a purer view of dividend growth investing at work as I have not contributed capital to the portfolio since October 2012.  Since my dividends are small I opt to automatically reinvest dividends instead of pooling them with new capital.  From dividend increases and dividend reinvestment July's dividends showed a 4.8% increase compared to April 2016 as well as a 9.2% increase from the year ago period.  The increases were completely from organic dividend growth as well as manufactured growth in the form of reinvested dividends.

Year to date through July 2015 my dividends received total for this portfolio was $156.39.  So far in 2016 the total is $156.12.  That's a small 0.2% decrease.  You might be thinking what gives?  Why is there a decrease when the other 2 comparisons showed solid increases?

The slight decline is due to the closing of my position in Wal-Mart Stores in February of this year.  Due to Wal-Mart's payment schedule there were 2 additional dividend payments received through July of 2015.  If we remove those payments from 2015 the year to date comparison improves to 6.2%.

Dividend Raises During the Month

July was a much busier month for dividend increases than expected with 6 of my holdings announcing raises to their cash payouts to me the shareholder.  You mean a company I own a piece of, albeit it, wants to pay out more of their profits to me just because I own part of the company?  Sign me up!  That's dividend growth investing at work!

The dividend boosts came from variety sectors of the economy: a diesel engine maker, a healthcare retail giant, a healthcare real estate firm, a retail landlord and one of the best known chocolate makers.  If you were counting there were only 5 companies mentioned, but the 6 one slipped through my watchful eye and will be written about tomorrow.  But for those that can't wait it was a long awaited raise from a banking giant.  Combined the dividend increases added $35.41 to my forward 12-month dividends.

Looking Forward

The forward 12-month dividends for my FI Portfolio are at $5,637.78.  Forward dividends in my Loyal3 portfolio ended the month at $64.71 bringing the total taxable account forward dividends to $5,702.49.  My Roth IRA's forward 12-month dividends are up to $271.71 increased due to dividend reinvestment and a dividend raise.

Monthly Average

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 odd payout schedules and eventually some positions will get dropped, but the long-term trend is what matters.  The rolling 3-month average of my FI Portfolio is at $471.07.  That's about a $21 decrease from where my year to date average was at the end of 2015.

dividend growth investing, stocks, financial independence
Monthly Comparison of Dividends Received in my FI Portfolio

Dividends Received Breakdown

FI Portfolio - Dividend Income
Company Dividend Amount
The Coca-Cola Company (KO) $57.24
EOG Resources, Inc. (EOG) $1.36
Phillip Morris International, Inc. $63.86
Medtronic plc (MDT) $39.61
Realty Income (O) $18.29
General Electric (GE) $39.38
Bank of Nova Scotia  $11.58
Toronto-Dominion Bank  $8.23
July 2016 Total $239.55
2016 YTD Total $3,077.68

Loyal3 Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
The Walt Disney Company $3.49 --
Mondelez International (MDLZ) $1.45 --
Dr. Pepper Snapple Group (DPS) $1.41 --
The Kraft-Heinz Company $2.07 --
The Coca-Cola Company $2.05 --
Nike, Inc. (NKE) $0.28
July 2016 Total $10.75

Roth IRA - Dividend Income
Company Dividend Amount DRIP Shares
JP Morgan Chase & Co. (JPM) $10.87 0.169
Phillip Morris International, Inc. $13.59 0.133
July 2016 Total $24.46
2016 YTD Total $156.12

I've updated my Dividend Income page to reflect July's changes.

Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

Did your second half dividends get off to a good start?

6 comments:

  1. Rock on Pursuit! I'm trying for $10K this year but am SIGNIFICANTLY behind currently. :) Will need December to save me. There's still a chance!

    ReplyDelete
    Replies
    1. PID,

      The fact that $10k is even potentially in your sights is awesome. We've taken a big setback due to a lack of income/savings and closing some positions but we're on the right track again. It's awesome to the power of dividend growth with raises and reinvestment spurring us onward.

      Hope to see you reach that goal because that's huge.

      Thanks for stopping by!

      Delete
  2. Keep it up JC. As long as you're fighting the good fight and have your focus on a better retirement; It can only go up.
    All good! Don't Stop! Meanwhile have fun with the new blessing. They grow so fast. Cheers buddy.

    ReplyDelete
    Replies
    1. Hustler,

      We're slowly moving forward and hopefully later this year or sometime in 2017 we'll be able to start making progress again. It's been a bit frustrating but we're still in great financial shape so I can't really complain about having to press pause for a bit. They really are blessings and it's amazing to see them grow up. It's so hard to believe she's almost 4 weeks already!

      Thanks for stopping by!

      Delete
  3. Awesome job for the month. Your accounts are all heading in the right direction. Do you plan on adding more to your Loyal3 going forward or your FI account to even the investments out? Keep pushing the passive income pile. Thanks for sharing.

    ReplyDelete
    Replies
    1. DivHut,

      Everything's been put on hold while we make this big transition and then get our debt paid down. But eventually we'll start adding regularly to the accounts. The likely plan, depending on monthly cash flow, would be Roth IRA for me, Roth IRA for my wife, taxable and then Loyal3. Loyal3 lost some of its allure when they stopped accepting credit cards because you could juice your yield a bit with a cash back card.

      Thanks for stopping by!

      Delete