Wednesday, May 10, 2017

Dividend Update - April 2017

dividend growth investing, stocks, financial independence
Dividend Update - April 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.


And just like that April has come and gone.  This year certainly seems to be flying by, but the great thing is that by investing in excellent companies there's passive income coming in each month in the form of dividends.  

My FI Portfolio provided $280.44 in dividends while my Loyal3 Portfolio chipped in another $5.72.  That brings the two taxable accounts' dividends to $286.16 for the month.  My Roth IRA generated $35.26 bringing the total monthly dividends across all accounts to $321.42.

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

FI Portfolio

On the surface my FI Portfolio showed decent gains both quarter over quarter and year over year.  Compared to January 2017 April's dividends increased by 5.1% and a 4.8% improvement compared to April 2016.  While those are both heading in the right direction a deeper look is still warranted.

The quarterly comparison was bitten by the timing bug.  Some companies stick to a regular dividend payment schedule, although it's not always a regular schedule on the calendar.  Coca-Cola for example did not pay a dividend in January, but did pay one in April.  Since PepsiCo can't do anything the same as Coca-Cola they make a payment in January, but not April.  Likewise, Care Capital Properties (CCP) followed PepsiCo's lead and Versum Materials (VSM) paid their first ever dividend in April since being spun off from Air Products & Chemicals (APD).  Normalizing the dividends to represent only those paid in both time periods changes the quarterly increase to a rather paltry 0.8% increase.

The year over year comparison was only effected by Versum's aforementioned first dividend payment and currency exchange.  The normalized year over year comparison showed an increase of 4.7%.

Loyal3 Portfolio

Just looking at the numbers as they stand it appears that something went terribly wrong.  The quarter over quarter change was -34.2% while the year over year change was -21.2%.  While it appears that things went poorly for my Loyal3 Portfolio, a deeper look at the results tells a different story.

The quarterly comparison jumps to a 3.8% increase after normalizing the numbers.  The problem is that all of the companies that paid in January didn't also pay in April.  Walt Disney Company (DIS) pays a semi-annual dividend which was paid in January and PepsiCo (PEP) also paid in January, but not April.  Likewise, Coca-Cola does not pay in January, but does pay in April.

The year over year comparison also paints a different picture after being adjusted.  Kraft-Heinz Company (KHC) is in the process of adopting a new dividend payment schedule which altered the results since they paid in April 2016, but not this year.  On a normalized basis the year over year comparison improves to a 10.2% increase.

If you haven't heard the Loyal3 brokerage will be folding in to FolioFirst.  As such, I'm in the process of closing out of some of the positions in my Loyal3 Portfolio in order to set myself up to transfer the whole shares of positions and cash into one of my other brokerage accounts.  

Roth IRA Portfolio

My Roth IRA portfolio gives a purer view of dividend growth investing at work since I have not contributed additional 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. 

The raw numbers show that my Roth IRA dividends increased 40.1% quarter over quarter and 51.1% year over year.  Those numbers are excellent; however, dividend growth and reinvestment doesn't justify those kind of increases.

The large improvements were due to trimming my position in Norfolk Southern (NSC) last year in order to allocate the capital to another company, McCormick & Company (MKC).  I received my first dividend payment from McCormick last month which skews the results.  

I like to normalize my dividend payments to give a more accurate view of the comparison periods.  On a normalized basis the quarter over quarter comparison showed a solid 2.8% increase while the year over year comparison is 10.8%.  Those improvements are from dividend growth and reinvestment alone which is quite encouraging.

Dividend Raises During the Month

April was an absolutely fantastic month for dividend increases with 6 companies announcing they would pay me a little bit more just to own their shares.  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, two consumer staple giants, an energy behemoth, blue chip tech and a healthcare conglomerate.  Combined these 6 raises increased my forward 12-month dividends by $43.35.  Through the first 4 months of the year I've received 19 increases from 17 of the companies in my FI Portfolio that have increased my forward 12-month dividends by $110.52.

Looking Forward

The forward 12-month dividends for my FI Portfolio are at $5,664.72.  Forward dividends in my Loyal3 portfolio ended the month at $70.26 bringing the total taxable account forward dividends to $5,734.97.  My Roth IRA's forward 12-month dividends are at $286.85.  Total forward 12-month dividends across all 3 accounts are at $6,021.82.

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've included 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 $468.86 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) $32.34
Realty Income (O)  $19.48
General Electric (GE) $41.09
Bank of Nova Scotia (BNS) $11.91
Toronto-Dominion Bank (TD) $8.58
Coca-Cola Company (KO) $60.51
Versum Materials (VSM) $0.45
April 2017 Total $280.44
2017 YTD Total $1,653.99


Loyal3 Portfolio - Dividend Income
Company Dividend Amount DRIP Shares
Mondelez International (MDLZ) $1.62 --
Dr. Pepper Snapple Group (DPS) $1.54 --
Coca-Cola Company $2.17 --
Nike, Inc. (NKE) $0.39 --
April 2017 Total $5.72
2017 YTD Total $23.95


Roth IRA - Dividend Income
Company Dividend Amount DRIP Shares
JP Morgan Chase & Co. (JPM) $11.55 0.130
Phillip Morris International, Inc. $14.31 0.127
McCormick & Company (MKC) $9.40 0.094
April 2017 Total $35.26
2017 YTD Total $96.46

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

Image courtesy of Stuart Miles on FreeDigitalPhotos.net.

Did April's dividends impress or disappoint?

7 comments:

  1. Looks like you're doing well, PIP. I'm also long KO and WMT. Your portfolio does however hold some others that I have been eyeing such as DPS. It's just a wonder to me that YOY, it has done better than KO and PEP. Goes to show that you never really can tell what's ahead, you can only take educated guesses. Cheers.

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  2. I agree with you that the year feels like it is flying by. This is why we all shoot for FI to slow things down.
    Solid numbers for the month of April.

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  3. Wow $6,000 in dividends over the year is amazing. Is there an app that can help calculate forward looking dividends? That would be helpful but I'm guessing you track this offline in a spreadsheet?

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  4. PIP -

    Nice work here, and you'll be trending in the right direction with the 12 month roll soon enough. Damn amazing div increases! Also - SBRA is set to acquire Care Capital, right? I am sure you got a nice bump there!!

    -Lanny

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  5. Congratulations, JC -- looking very good!

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  6. Great results for the month of April. It seems like we all had a wonky April because of payout schedule changes. In all, it doesn't really matter as long as those dividends keep rolling in. Nice to see that VSM starting to pay us something too!

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  7. Good April PI. That is a good chunk from a taxable account.
    Cheers,
    DFG

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