Wednesday, January 4, 2017

Dividend Update - December 2016

dividend growth investing, financial independence, freedom, dividends
Dividend Update - December 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 end of each quarter is always a great time for dividend growth investors since many companies make payments during that time and my December haul proved to be no different.  I received a total of $858.63 in dividends in my FI Portfolio during December and another $8.69 in my Loyal3 Portfolio.  Both of those portfolios are regular taxable brokerage accounts.  My Roth IRA also provided $35.28 with all dividends being reinvested.  Across my taxable accounts my dividends totaled $867.32.  Adding in my Roth IRA dividends brings December's total to $902.60.  For 2016 I received a total of $5,962.20 across all 3 accounts.

Also, be sure to check out the infographic I made and let me know what you think.

FI Portfolio

As usual I like to look at the quarter over quarter and year over year comparisons as they stand to see how everything worked out.  However, due to varying payout schedules, positions being added/trimmed/closed and even the occasional dividend cut it's important to look at things on an adjusted basis to give a more accurate reflection of the real situation.

On the surface, December showed a 1.9% decline from September's total.  Compared to December 2015 though there was a slight 2.1% increase.

Most of the adjustments for the quarterly comparison have to do with the timing of dividend payments.  Some companies paid in September but not in December and vice versa.  Even after the adjustments the quarterly comparison still shows a 0.8% decline which was due to my trimming of two positions within 4Q although some of that was made up via dividend increases and reinvestment.

Likewise the annual comparison had similar timing issues and was also effected by the aforementioned trimming of a couple positions.  The adjusted year over year change improved to a 4.1% increase which is solid, but a little underwhelming.

Loyal3 Portfolio

Just looking at the numbers as they are it looks like a solid month for my Loyal3 Portfolio.  The quarter over quarter comparison shows a remarkable 55.5% increase and the year over year comparison shows a 45.6% jump.  As usual though there's more than meets the eye here.

For the quarterly comparison adjustments need to be made due to the timing of some payouts.  For starters PepsiCo (PEP) made a payment during September, but not in December which artificially lowers the quarterly comparison.  However, both Kraft-Heinz (KHC) and Coca-Cola (KO) did the opposite with no payments in September yet payouts in December.  Adjusting for the payout timing and only using the dividends received in both periods brings the quarterly increase down significantly to 7.7% although that's still a solid raise for one quarter.

Likewise the annual comparison needs to be adjusted.  I have no idea what's going on with Kraft-Heinz and their dividend payment.  It seems to be fluctuating quite a bit in terms of timing, but as long as it keeps getting paid and raised that's something I can deal with.  In 2015 Kraft-Heinz's 4Q payout came in November, but for 2016 it moved to December.  Excluding the Kraft-Heinz payout from 2016's total lowers the year over year increase to 9.4% which is a solid increase.

Roth IRA Portfolio

The last month of each quarter is always a welcomed return to dividends received within my Roth IRA after the mid quarter lull.  On the surface it looks like a pretty disappointing result for my Roth IRA with an 18.4% decline quarter over quarter and an 11.3% decline year over year.  

While it's never good to see declines there is a valid reason for them.  Back in late September I sold some shares of Norfolk Southern (NSC) that had showed a solid gain with the intention to reinvest the proceeds back into other dividend paying companies.  Unfortunately Mr. Market hasn't given me quite the opportunity that I'd like so the proceeds are still sitting in cash.  The entirety of the decline is due to the trimming of that position.  

Adjusting December's dividends to reflect a constant payout from Norfolk Southern paints a different picture.  The quarter over quarter comparison changes to a 0.3% increase while the year over year comparison jumps to a 9.1% increase.

Dividend Raises During the Month

Three different companies in my FI Portfolio announced dividend increases during December which is dividend growth investing at work.  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!

These raises came from a wide cross section of the economy and ranged from a retail landlord, a health care property landlord and an industrial powerhouse that rejoined the dividend growth ranks.  Combined these 3 companies increased my forward dividends over $11.  For 2016 I received 51 raises from 41 companies increasing my forward 12-month dividends by over $280.

Based on historical increase schedules, January is likely to be a slow month for increases with only 2 companies announcing raises in January 2016.

Looking Forward

My forward 12-month dividends for my FI Portfolio ended 2016 at $5,587.82.  My Loyal3 Portfolio's forward dividends are at $67.01 bringing the total forward dividends for my taxable accounts up to $5,619.47.  My Roth IRA's forward-12 month dividends ended 2016 at $242.54.  Across all 3 accounts, assuming no dividend cuts or position size changes, I can expect to receive at least $5,897.37 in dividends throughout 2017.

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, as we saw above, and eventually some positions will get dropped, but the long-term trend is what matters.  My monthly average for 2016 was $469.73.  That's about a $22 decrease from where my year to date average was at the end of 2015.  Considering all that has changed over the last year that's a win.


dividend growth investing, dividends, financial independence, freedom
Monthly Comparison of Dividends Received From FI Portfolio
Dividends Received Breakdown


FI Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
Wells Fargo (WFC) $20.91 --
Bank of America (BAC) $12.14 --
McDonald's (MCD) (Analysis Here) $79.81 --
Halliburton (HAL) $25.17 --
Phillips 66 (PSX) $5.22 --
Emerson Electric (EMR) $29.67 --
Walgreens Boots Alliance (WBA) $17.28 --
Harris (HRS) $32.07 --
Cummins (CMI) $23.90 --
Target Corporation (TGT) $77.00 --
Aflac (AFL) $31.57 --
BP (BP) $51.79 1.568
Microsoft (MSFT) $16.05 --
Chevron (CVX) $63.61 0.560
Exxon Mobil (XOM) $50.73 0.478
Realty Income (O) (Analysis Here) $18.52 --
IBM (IBM) $42.31 --
Visa (V) $11.24 --
Johnson & Johnson (JNJ) (Analysis Here) $60.17 --
Unilever plc (UL) $10.59 --
Starbucks Corporation (SBUX) $14.05 --
3M Company (MMM) (Analysis Here) $19.98 --
United Technologies (UTX) $9.24 --
Ventas (VTR) $18.11 --
T. Rowe Price Group (TROW)$11.13 0.146
Becton, Dickinson and Company (BDX) $5.84 --
Ross Stores (ROST) $7.58 --
Hershey (HSY)$6.80--
Coca-Cola Company (KO) $57.24--
Centerpoint Energy (CNP) $28.91 1.183
December 2016 Total $858.63
2016 Total $5,636.77


Loyal3 - Dividend Income
Company Dividend Amount DRIP Shares
V.F. Corporation (VFC) $1.48 --
Hershey $1.28 --
Kraft-Heinz Company (KHC) $2.16 --
Unilever $1.72 --
The Coca-Cola Company $2.05 --
December 2016 Total $8.69
2016 Total $65.84



Roth IRA - Dividend Income
Company Dividend Amount DRIP Shares
Bank of America $7.74 0.342
Wells Fargo $10.84 0.209
Norfolk Southern $16.70 0.154
December 2016 Total $35.28
2016 Total $259.59

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

How were your dividends in December?  Did you meet your dividend goals for 2016?

Let me know in the comments below!

Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

11 comments:

  1. Awesome job as usual PIP. My dividends in DEC were great but not high enough to help me hit my 2016 goal, lol. Still, onwards onwards!

    ReplyDelete
    Replies
    1. PID,

      Even though you came up a bit short of your I'm sure you won't be turning down that cash flow! 2017 should be another great year for investors.

      Thanks for stopping by!

      Delete
  2. Congrats on a great month. You beat me by a couple hundred dollars. I really like the names in your portfolio, strong companies.

    ReplyDelete
    Replies
    1. IH,

      I'm pretty stoked about pulling in over $900 across the 3 accounts. If only the 1st and 2nd month of each quarter were close to that. There's a few companies I'm contemplating on closing my positions to try and concentrate my portfolio a bit, but I also like the diversification. Decisions, decisions.

      Thanks for stopping by!

      Delete
  3. Hi JC,
    Congrats on an awesome end to the year! Some great companies paying you this month, and over $900 as well. The options income also helps I'm sure.
    Best wishes,
    -DL

    ReplyDelete
    Replies
    1. DL,

      December was an awesome month in terms of income generation. $900 in dividends + ~$800 from options means nearly $1,700 in investment income. That's great to see.

      Thanks for stopping by!

      Delete
  4. You did really well for 2016. Your monthly average ticked down just a bit but overall you are set up pretty nicely going into 2017. You have a stable of solid dividend payers that should give you raises along with fresh buys and reinvestment should take care of your '17 growth. Keep up the good work! Look forward to following your '17 progress.

    ReplyDelete
    Replies
    1. DH,

      The monthly average did tick down, but I'm actually excited to see that it was only $22 per month. Considering there was essentially no new capital invested, a dividend cut and subsequent closing of my KMI position (that was providing >$400 per year in dividends prior to the cut) and a couple position trims and I still only ended up down $22 on average. That's pretty good and speaks to the power of the organic dividend growth the companies provide.

      Thanks for stopping by!

      Delete
  5. That's some pretty impressive income for a month. It's also a pretty impressive list of companies paying out. Many people's house payment could be made from what you've earned during December. Onward and upward in 2017!

    ReplyDelete
    Replies
    1. Chris,

      Our mortgage payment for December just about got covered by the dividend payments which is exciting. That's how financial freedom is built. One expense at a time being covered by passive income.

      Thanks for stopping by!

      Delete
  6. Congrats on a great month - almost crossed that awesome $1K mark. Looking forward to tracking your progress in '17. I plan to include your monthly income updates in my dividend income tracker.

    ReplyDelete