Wednesday, November 2, 2016

Dividend Update - October 2016

dividend growth investing, stocks, financial independence
Dividend Update - October 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 4th quarter is officially 1/3 of the way done.  It's hard to believe that 2016 is already coming to a close.  So far 2016 has been a wonderful year with nearly $4,800 of dividends received across all of my accounts.  October was a solid start to the 4th quarter.  My FI Portfolio provided $241.00 in dividends and my Loyal3 Portfolio chipped in another $7.52.  Combined my taxable account dividends totaled $248.52.  My Roth IRA also brought in $24.94 bringing my total monthly dividends, before taxes, to $273.46 across all 3 accounts.

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

FI Portfolio

My FI Portfolio shows a bit of a mixed picture.  Compared to July 2016 dividends received eeked out a small 0.6% increase.  Although compared to October 2015 there was a 6.0% decline and YTD 2016 showed a 2.9% decline as well.  

The comparison to July is a bit disappointing, although it's understandable.  Of the 8 holdings that paid dividends during October only 3 of them gave small increases and one of those was more than offset by currency exchange.  

The year over year decline is a bit more concerning and warrants further discussion.  For starters there were 3 extra dividend payments received in October 2015, but not during October 2016 due to closing of those positions.  That accounted for about $30 in extra dividends making it an unfair comparison.  Adjusting for those paints a better picture with the dividend growth coming in at 4.8% despite small raises, no raises and negative currency exchange.

The YTD comparison faces similar issues with positions being closed over the last year.  Although, honestly it's quite difficult to adjust for all of the changes to give a clearer picture of the organic dividend growth from my portfolio.  I'll leave you with this one bit of information though and that's through October 2015 I had received over $300 from Kinder Morgan, Inc. (KMI) and $0 this year since I closed my position after the drastic dividend cut.  Adjusting just for that position alone leads to nearly a 7% swing with the YTD comparison swapping to a 4.1% increase.

Loyal3 Portfolio

Just glancing at the numbers it looks like my Loyal3 Portfolio is all over the place.  Compared to July dividends showed a 30.1% decline, but a 53.2% increase compared to October 205.  The YTD total muddies the water further with a 49.0% decline.  So what gives?

You can thank The Walt Disney Company (DIS) for the quarterly  issues and Kraft-Heinz (KHC) for the YTD issues.  Disney swapped to paying a semi-annual dividend in 2015 and the latest payment was in July while October saw nothing.  Adjusting for the Disney payout changes the comparisons significantly.  Compared to July it works out to a 3.6% increase as opposed to a 30% decline.  

The year over year comparison was unchanged and the large increase was primarily due to new purchases over the past year with dividend increases contributing extra growth.

Kraft-Heinz continues to make me adjust and I'll be glad when 2017 comes along.  Don't get me wrong I loved receiving the special dividend from the merger, but it makes for inaccurate comparisons on the surface.  Removing the special dividend from 2015, which gives a better view of how the regular dividend payments look, changes the YTD comparison from a 55.8% decline to a 17.2% increase.

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 October's dividends showed a 2.0% increase compared to July 2016 and a 9.0% 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 October 2015 my dividends received total for this portfolio was $223.52.  So far in 2016 the total is $224.31.  I'm pretty happy to see a small 0.4% increase for the YTD total considering there's been changes with my portfolio.

Earlier this year I closed my Wal-Mart (WMT) position in this portfolio because I had a bit too much exposure to them when you look at all my investments.  So there's an additional $14 of dividends received in 2015 that weren't received this year since I sold Wal-Mart.  Adjusting for Wal-Mart position pushes the YTD growth up to 7.1%.

Dividend Raises During the Month

October turned into a much more fruitful month of dividend increases than expected.  Going into the month I was expecting 4 raises, but turns out I got 5 and that was with one of them not announcing a raise.  What's not to like about dividend raises?  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 raises came from a wide variety of sectors of the economy: a healthcare REIT, a payments processor, a widows and orphans company, an oil super major and an insurer.  One company, Starbucks Corporation (SBUX), was due to announce based on last years raise, but they didn't.  I'm not worried though because I expect them to announce it when they report earnings later this week.  These 5 raises combined to boost my forward 12-month dividends by $20.13.

Looking Forward

The forward 12-month dividends for my FI Portfolio are at $5,403.05.  Forward dividends in my Loyal3 portfolio ended the month at $65.46 bringing the total taxable account forward dividends to $5,468.51.  My Roth IRA's forward 12-month dividends are at $241.75.

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 $478.31.  That's about a $14 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. (PM) $65.11
Medtronic plc (MDT) $39.61
Realty Income (O) (Valuation Analysis Here) $18.52
General Electric (GE) $39.38
Bank of Nova Scotia (BNS) $11.76
Toronto-Dominion Bank (TD) $8.02
October 2016 Total $241.00
2016 YTD Total $4,512.62

Loyal3 Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
Mondelez International (MDLZ) $1.62 --
Dr. Pepper Snapple Group (DPS) $1.41 --
The Kraft-Heinz Company $2.16 --
The Coca-Cola Company $2.05 --
Nike, Inc. (NKE) (Valuation Analysis Here) $0.28 --
October 2016 Total $7.52
2016 YTD Total $55.79

Roth IRA - Dividend Income
Company Dividend Amount DRIP Shares
JP Morgan Chase & Co. (JPM) $10.95 0.159
Phillip Morris International, Inc. $13.99 0.145
October 2016 Total $24.94
2016 YTD Total $224.31

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

Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

Was October a good start for your dividends to kick off the last quarter of the year?  Are you on track to meet your goals for 2016?

2 comments:

  1. Great report for October. Your infographic already reflected some nice dividend increases and solid forward dividend income. As always I enjoy reading these reports and seeing quite a few names in common paying us both. Keep up the good work.

    ReplyDelete
  2. Keep it up JC. Solid companies paying you. Slow and steady, the consistency you show will pay off so just keep at it and we will crush all of our goals and dreams for sure.
    Enjoy the little girl my friend. Kids are great. Cheers.

    ReplyDelete