Friday, February 3, 2017

Dividend Update - January 2017

dividend growth investing, stocks, financial independence
Dividend Update - January 2017
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.


I honestly can't believe that it's already 2017 let alone that the first month is already over and done.  Time waits for no one, right?  Well, luckily for me the companies I've invested in keep moving forward too and even paid me some cold hard cash to literally do nothing for the company except own a very tiny portion of it.

January got the year started off right with $266.85 in dividends received in my FI Portfolio.  My Loyal3 Portfolio chipped in another $8.69 bringing the total taxable account dividends to $275.54.  My Roth IRA provided another $25.16 during January bringing the total monthly dividends to $300.70.

Be sure to check out the infographic for January 2017's dividends and let me know what you think!

FI Portfolio

On the surface my FI Portfolio doesn't paint the cleanest of pictures.  Compared to October 2016 dividends received showed a 10.7% increase; however, the year over year comparison was a 0.7% decline.  I prefer to dig a bit deeper than just the raw totals to see what exactly is going on.

The divergence is largely due to the timing of payouts such as The Coca-Cola Company paying in October, but not January or Wal-Mart not paying in October, but paying in January.  All told the quarterly culprits were Coca-Cola, Wal-Mart, Pepsico and Care Capital Properties.  

To adjust for that I remove any dividends from the monthly totals that were paid in one of the months, but not the other.  This reduces the quarter over quarter comparison to just a 1.20% increase.

The year over year comparison only had 2 companies to adjust for.  One was an offender in the quarterly comparison, Care Capital Properties, the other was W.P Carey (WPC) which I had closed my position after receiving the January 2016 dividend.  Adjusting for these two payouts changes the annual comparison from a 0.7% decline to a 6.0% increase.

Loyal3 Portfolio

Just glancing at the numbers it looks like my Loyal3 Portfolio is all over the place.  Compared to October 2016 January's dividends showed a 15.6% increase.  Although when looking at January 2016 there was an 11.6% decline.

It's all about the timing.  The Walt Disney Company (DIS) as well as Kraft-Heinz Company (KHC), The Coca-Cola Company (KO) and Pepsico, Inc. (PEP) led to the surface comparison issues due to the timing of their payouts.  Walt Disney pays a semi-annual dividend in January and July while Kraft-Heinz continues to be a thorn in my side for my comparisons.  Whereas both Coca-Cola nd Pepsico just employ odd payout schedules.

Adjusting the dividends received to reflect a constant payout, i.e. only use companies that paid in both periods, is the best way I've found to normalize the growth from one period to the next.  Removing Disney's dividend from January 2017's payout and Kraft-Heinz's dividend from October 2016's payout reduces the quarterly growth to 3.3%.

Likewise the year over year comparison needs to be adjusted.  After adjusting for constant payouts the year over year growth improved significantly to 12.0% compared to the 11.6% decline in the un-adjusted scenario.

Roth IRA Portfolio

My Roth IRA portfolio gives a purer view of dividend growth investing at work since I have not contributed capital to the portfolio since October 2012.  Since the account, and therefore dividends, are small I opt to just automatically reinvest the dividends instead of pooling them with new capital.  

At face value my Roth IRA provided a 0.9% increase compared to October 2016 although there was a 9.8% decrease year over year.  All of the change is due to the closing of my Wal-Mart Stores (WMT) position in early 2016 after receiving the January dividend payment.


If I exclude the Wal-Mart payout from January 2016's comparison the year over year change jumps up to a 8.8% increase.  The growth is entirely attributable to both dividend increases and reinvestment over the past year.

Dividend Raises During the Month

January turned into a much more fruitful month of dividends increases than expected.  Going into the month I was expecting just 1 of the companies I own to announce a raise, but in total 3 of them boosted up my pay.  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 real estate landlord, and an industrial gas provider.  These 3 raises combined to boost my forward 12-month dividends by $18.57.

Based on 2016's increases I expect 6 of the companies in my FI Portfolio to announce dividend raises during February.

Looking Forward

The forward 12-month dividends for my FI Portfolio are at $5,579.47.  Forward dividends in my Loyal3 portfolio ended the month at $67.18 bringing the total taxable account forward dividends to $5,646.65.  My Roth IRA's forward 12-month dividends are at $243.42.

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.  

In order to smooth out changes I'm going to start including a rolling 12-month average for the current reporting period to compare with the monthly average for the previous years.  The current rolling 12-month average for my FI Portfolio only sits at $468.41 which is essentially even with the 2016 monthly average.
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
EOG Resources, Inc. (EOG) $1.36
Medtronic plc (MDT) $39.61
Phillip Morris International, Inc. (PM) $65.11
Wal-Mart Stores, Inc. (WMT) $31.71
Realty Income (O)  $18.57
General Electric (GE) $41.09
Bank of Nova Scotia (BNS) $11.99
Toronto-Dominion Bank (TD) $8.02
Pepsico, Inc. (PEP) $46.32
January 2017 Total $266.86
2017 YTD Total $266.86


Loyal3 Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
Walt Disney Company (DIS) $3.84 --
Dr. Pepper Snapple Group (DPS) $1.41 --
Mondelez International (MDLZ) $1.62 --
Pepsico, Inc. (PEP) $1.43 --
Nike, Inc. (NKE)  $0.39 --
January 2017 Total $8.69
2017 YTD Total $8.69


Roth IRA - Dividend Income
Company Dividend Amount DRIP Shares
JP Morgan Chase & Co. (JPM) $11.02 0.127
Phillip Morris International, Inc. $14.14 0.155
January 2017 Total $25.16
2017 YTD Total $25.16

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

Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

After January are you on track to meet your goals for 2017?

16 comments:

  1. Great work, JC! Collecting ever-increasing dividend checks is what DGI is all about!

    I'll probably only get around to writing my January update this weekend. I'm a little behind and trying to get back on track. My annual review for 2016 is up next, followed by another options update.

    Take care and all the best for the rest of 2017!

    ReplyDelete
    Replies
    1. Ferdi,

      I hear ya. I've got so many different posts on the back burner but never enough time to work on them. And the end of one month just makes things super busy with the monthly recaps.

      All the best.

      Delete
  2. PIP,

    Off to a pretty good start this year. It's always great when you can see a greater returns with dividend raises. It's that added feature that I love so much about dividend growth investing. Shared with you in WMT and GE. LONG as can be.

    ReplyDelete
    Replies
    1. DR,

      January was a solid start but I'll be relying mainly on dividend growth and select reinvestment to provide dividend income growth this year. I can't wait until 2018 when we should be able to start investing heavily once again.

      All the best.

      Delete
  3. Great start to the new year, JC. Keep up the great work and thanks for sharing

    R2R

    ReplyDelete
    Replies
    1. R2R,

      I can't complain about pulling in over $300. So I'm pretty happy with that. I'm really looking forward to the dividend increases to be announced this month. February is one of my busier month for raises so it should make for an exciting month.

      All the best.

      Delete
  4. Great work getting over $300 for January. I wonder why some companies do not pay out dividends on exactly 3 month intervals. Either way, congrats on your progress.

    ReplyDelete
    Replies
    1. DM,

      Yeah I don't really know what's up with that either. But I can deal with it if they just have a weird schedule like KO or PEP. What's really annoying is when they move a payment by a month for no real reason. SBUX did that with the last payment during 2016 and KHC has been moving payments all over the place too. In the end it doesn't really matter as long as they still get paid, but it's more just a thorn in my side.

      All the best.

      Delete
  5. Replies
    1. D&H,

      $300 is solid but sadly February will be a pretty big dip from that. Luckily March will really move things forward since it's my biggest paying month.

      All the best.

      Delete
  6. Well done, over the long run this will do better and better. 2017 looks like it is going to be an absolute ripper for you. All the best.

    ReplyDelete
    Replies
    1. BHL,

      That's the great thing about dividend growth investing. Even if I don't get to invest any new capital or reinvest dividends January 2018's dividends should be at least $315 assuming an average of 5% raises for these payers. That's awesome.

      All the best.

      Delete
  7. Just over $300 for the month - NICE! Thanks for sharing and keep it up.

    ReplyDelete
    Replies
    1. DD,

      I definitely can't complain about an extra $300 coming my way.

      Thanks for stopping by!

      Delete
  8. Can't complain about bringing 3 bills for the month of January. Congrats on a solid showing even with changes in payout schedules. I know the KHC dividend schedule threw off some January income among our peers. It's all good as long as a minimum of four payments are made in a year I'm happy. Keep up the good work!

    ReplyDelete
    Replies
    1. Keith,

      Yeah KHC has been moving their payouts around which doesn't really matter other than it just throws off the comparisons. $300 is a good start and to the year.

      All the best.

      Delete