Tuesday, September 6, 2016

Dividend Update - August 2016

Dividend growth investing is a simple, straight-forward strategy for the average Joe investor.
Dividend growth investing is a simple, straight-forward strategy for the average Joe investor.
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 month of the quarter is a decent month for my dividends with over 12 companies across my 3 accounts paying me cold, hard cash.  During August my FI Portfolio delivered $319.04 in dividends.  I also received $1.36 within my Loyal3 Portfolio bringing my total taxable accounts' dividends to $320.40.  I also have a small Roth IRA portfolio; however, none of the holdings pay dividends in August so it was a big fat zero for the month.  Across all three accounts, excluding the effect of taxes, I received $320.40 in dividends in August and have received $3,595.52 year to date.

FI Portfolio

Looking at the numbers exactly as they stand shows a quarter over quarter improvement of 1.2%, but a 21.9% decrease year over year.  The quarterly change doesn't need much explanation since it at least moved in the right direction.  The quarterly increase was attributed to 3 small increases from the 11 positions that paid during the month.

However, the year over year decline of 21% does warrant an explanation, so what gives?  The decline is completely attributable to the Kinder Morgan, Inc. (KMI) dividend cut and my subsequent closing of the position at the end of 2015.  Kinder Morgan provided over $100 in dividends during August 2015 which was a hard pill to swallow.  Excluding the Kinder Morgan dividend payment from August 2015 boosts the annual comparison to a 5.9% increase.

On the surface the year to date comparison shows a 4.1% decline from 2015.  However, the year to date change should exclude the Kinder Morgan dividend payments from 2015 which totaled over $300 through August 2015.  Excluding the Kinder Morgan payouts improves the year to date comparison to a 5.1% increase.

Loyal3 Portfolio

My Loyal3 Portfolio was pretty quiet with only one payout during August.  Dividends were flat compared to May 2016, but showed a very strong 13.3% increase year over year.  Unfortunately that's working off of a very small base of just $1.20, but progress is progress.  The year over year increase was due to the solid 9% dividend increase that Apple (AAPL) gave shareholders earlier this year and also a small addition to the position.  

Year to date I've received $42.68 in dividends which, on the surface, shows a 57% decline compared to the same period in 2015.   If you remember Kraft (KRFT) paid a special dividend in 2015 as part of the merger into the Kraft-Heinz Company (KHC).  Excluding the one-time payment from 2015 the year to date comparison improves to 6.2%. 

Roth IRA Portfolio

The comparisons are easy to make for my Roth IRA Portfolio since no dividends were received across any of the time periods.  So no increases were realized, but no declines either.  

Year to date I've received $156.12 in dividends within my Roth IRA which is a slight decline from 2015's total of $156.39.  That's a 0.17% decline for the same period which is due to my closing out of my position in Wal-Mart Stores (WMT) (Analysis Here) earlier this year.  Excluding the 2 extra Wal-Mart payments in 2015 moves the comparison to, ironically enough, 6.2%.

Dividend Raises During the Month

August was a boring month for dividend increases with no action for my holdings until the end of the month.  Luckily, the last 3 days of August brought about 2 pay raises from my positions.  Harris Corporation (HRS) was up first with a 6.0% increase that boosted my forward 12-month dividends by $9.90.

The other raise came from our neighbors to the north when Bank of Nova Scotia (BNS) announced a 2.8% boost to their dividend on top of the increase earlier this year.  Compared to the same payment from 2015 the dividend has risen 5.7%.  This raise increased my forward 12-month dividends by $1.53 based on the CAD:USD at the time of the increase.

In my FI Portfolio I've received 35 increases from 28 companies increasing my forward 12-month dividends by $202.82.  You mean a company I own a piece of, albeit tiny, wants to pay out more of their profits to me just because I own part of the company?  Sign me up!  That's the dividend growth strategy in action.

Looking Forward

My forward 12-month dividends for my FI Portfolio are up to $5,651.55.  Forward dividends in my Loyal3 Portfolio ended the month at $65.06 bringing the total taxable account forward dividends to $5,716.61.  My Roth IRA's forward 12-month dividends increased to $271.71.

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 weird payout schedules and eventually some positions will get dropped, but the long-term trend is what matters.  The rolling 3-month average is $472.28 which is about $20 less than 2015's mark of $492.  
My real-life financial independence portfolio's monthly dividend history.
My real-life financial independence portfolio's monthly dividend history.
Dividends Received Breakdown

FI Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
Procter & Gamble (PG)  $45.80 --
AT&T (T) (Analysis Here) $24.52 --
Air Products & Chemicals (APD) $15.89 --
Realty Income (O) (Analysis Here) $18.29 --
HCP, Inc. (HCP) $46.66 --
General Mills (GIS) (Analysis Here) $31.33 --
Verizon Communication (VZ) (Analysis Here) $24.30 --
Starbucks (SBUX) $11.24 --
YUM Brands (YUM) $19.37 --
Deere & Company (DE) $36.15 --
Omega Healthcare Investors (OHI) $45.49 1.221
August 2016 Total $319.04
2016 YTD Total $3,396.72

Loyal3 Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
Apple (AAPL) $1.36 --
August 2016 Total $1.36 --
2016 YTD Total $42.68 --

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

How were your dividends for August?  Coming into the final 1/3 of the year, are you on track to meet your goals or do you still have work to do?  

Please share your thoughts below!

Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

5 comments:

  1. Great work on another solid month. I'm drastically behind on my goal, but still have a shot at it pending no major disasters in SEP and DEC (I'll call those two my "please save my goal" months. :) Was curious if you still had a goal of ~$8.5K for this year? Noticed it on your goals page but saw 2014 stuff as well. Take care!

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  2. Keep up the great work JC. Slow and steady, the trend is moving higher all the time. Keep up the consistency and commitment and you'll crush your goals and dreams.
    Enjoy the baby buddy. Don't stop!

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  3. Good job. Don't worry about the that Kmi loss you will make it up in no time. That's why we get a good selection of companies to be able to withstand those.

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  4. Great work JC, receiving over $300 in dividend income is pretty awesome. I would love to own more Starbucks shares. :)

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  5. Looks like you had a nice August even with the KMI disappointment. No one likes seeing a cut or year over year loss but that's part of being a dividend income investor. It just happens. Still, from those August payers it looks like you own a solid stable of dividend payers with many names in common with my portfolio. Always nice to see. Thanks for sharing your update!

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