2017 Dogs of the Dow Quarterly Update

Last December, I made a post about THE GREAT 2017 DOGS OF THE DOW EXPERIMENT. The purpose of the experiment was to test one of the most popular investment strategies that’s been floating around since it’s creation in 1991 by Michael B. O’Higgins, a money manager based out of Miami, FL.

The basic idea is to take the list of stocks in the Dow 500, sort them by highest dividend yield and the top 10 stocks will be the Dogs of the Dow. In this investment model, it means those 10 stocks are undervalued because their dividend yields are among the highest in the Dow. Does it work? Not Always, but it’s fun to see if it does this year.

During the week that I was working on the post, I purchased $500 in each of the 2017 Dogs.

3 shares of IBM @ 165.90 5 shares of CAT @ 92.80
9 shares of MRK @ 58.80 15 shares of PFE @ 32.50
6 shares of PG @ 84.05 3 shares of BA @ 155.78
17 shares of CSCO @ 30.20 10 shares of VZ @ 53.40
5 shares of XOM @ 90.40 4 shares of CVX @ 117.65

Let’s take a look and see how they have been doing for the last 3 months or so.

IBM

IBM has fared well in the last 3 months since I’ve purchased them. I’m currently up 5.75% and have received a $4.20 dividend payment already.

The first round of news came from their reported earnings beat on January 19th that started them on an uptrend to where they currently are located. They have since been upgraded by various stock firms.

CAT

CAT benefited from the initial surge when Donald Trump took office. It shot up towards $99 a share but has since dropped below my initial cost. It’s currently down -1.5% overall. I have received a single dividend of $3.85 and also made the mistake of DRIPing another share at it’s all time high price of 98.80.

CAT posted earnings towards the end of January where they beat EPS but missed on revenue (Source). Coupled with the weaker guidance from their conference call, CAT dipped hard. Pile on top of that allegations of tax fraud, we can see why they’ve been having a hard time lately.

MRK

MRK has been doing well for itself with shares up over 7.9% since I purchased them. I have also received a single dividend in the amount of $4.23.

They posted mostly middle of the road earnings where their EPS was inline but they missed revenue for the quarter. (Source)

PFE

Pfizer has been another positive return so far for the Dogs of the Dow. It’s currently up 5.48% since they were purchased and add on top of that the $4.80 dividend that they paid in March, it’s looking pretty healthy return-wise.

They reported some not-so-great earnings that saw them missing both EPS and revenue. (Source) In the beginning of February, they announced a $5B accelerated share buyback program. (Source) It seems like the market doesn’t care much as they have been on a tear since February.

PG

With a total return of 7.4% and a single dividend payment of $4.02, Proctor and Gamble is setting itself up to be the love of my life. I’ve always heard great things about PG and knew that they would always be part of my portfolio. With the Dogs of the Dow Experiment I was able to make that a reality. I’ve already DRIP’d one share and would love to add even more if it happens to ever dip again this year.

On the news side of things, PG released positive earnings in January. (Source) There was also news of Nelson Peltz’s Trian Fund taking a 3.5 billion stake in P&G which sent shares soaring. (Source)

BA

BA has been on fire ever since Donald Trump took office and are currently up 14% in total return plus the $4.26 dividend payment in March.

They posted positive earnings (Source) Even though they posted tepid guidance for the next year, the market has been full on bullish with the stock.

CSCO

This tech stock has so far given me a total return of 12.7%, plus a dividend payment of $4.42.

Cisco beat EPS and revenue but still found the stock sliding downward. (Source) It has crawled back up in share price and has been looking pretty healthy overall.

VZ

Verizon is one of the laggards of this experiment with a total return of -6%. 

If we look through their newsfeed, it looks like the decline started with missing EPS on earnings. (Source) There was also talks of a Verizon/Charter collaboration and in a more somewhat controversial subject, Verizon has decided to bring back unlimited data. Analysts are saying it will be bad for the entire sector as a whole. Of course, it will be great for consumers. Only time will tell what happens. I wouldn’t count VZ out quite yet. I don’t think they’re going anywhere.

XOM

Another disappointment in the Dogs has been XOM which is currently sitting at a total return of -8% since it was purchased.

A lot of it has to do with the turbulent nature of oil right now as it dipped below $50 and continues to go down. I’m not too familiar with the intricacies of oil but our reliance on fossil fuels isn’t going anywhere anytime soon. In other news, they also missed earnings. (Source)

CVX

The last one on the list is another underperformer. So far this year, CVX has a total return of -7.8%

The analyst is mostly the same as XOM above since they’re both oil energy stocks. They too missed earnings (Source) On the plus side, revenue is up 7.7% Y/Y so its not all doom and gloom.

Conclusion

Of course, we should go ahead and show the Dow Jones Year-To-Date returns for a fair comparison

dow_jones_2017_1qtr

(Source)

Looks like 6 of the 10 stocks from the experiment are beating the YTD for the Dow. Not terrible but not great. I’ll update everybody once again halfway through the year and see if our laggards can get their butt in gear and start making me some money!

 

Cheers!

Dividend Portfolio Update for February 2017

dividend portfolio money jar

 

The market has been on a tear since Donald Trump has taken office and my portfolio is no different. Below is a screenshot of my gains for the month of February and there’s no way you can hate against it. While not all my stocks have done amazing, there’s definitely been quite a few that have stood out.

feb2017_portfoliogains

To name just a few:

AAPL is up 16% CSCO is up 11.5%
BA is up 12% PFE is up 11%
CAH is up 13% V is up 7%

Of course, short term gains don’t mean too much when we’re looking at establishing a high quality dividend portfolio, but it’s still brings a smile to my face when I see my balance go up over $1,200 bucks in a month. Can this bull market continue or will we see it regress? Only the shadow knows…

Deposits

As usual, I auto-deposited $200 each pay period into my Robinhood account. This sets me up to have $400 every month to purchase high quality dividend stocks without having to put up any effort.

I also added a one time deposit of $625 for the month. This is $375 more than my stated Goals for 2017. I’m also working towards paying off my car loan this year. I’m hoping my tax rebate this year will pay for the majority of the car off. This will let me take the payment I would normally use for the car payment and use that money to purchase even more high quality dividend stocks.

Total: $200 + $200 + $625= $1,025

Dividend Payouts

VZ 10 shares @ $0.58 = $5.78
T 25 shares @ $0.49 = $12.25
CVS 7 shares @ $0.50 = $3.50
SDIV 101 shares @$0.12 = $12.17
OHI 20 shares @ $0.62 = $12.40
PG 6 shares @ $0.67 = $4.02
AAPL 5 shares @ $0.57 = $2.85
CAT 5 shares @ $0.77 = $3.85
HCN 15 shares @ $0.87 = $13.05
CLDT 150 shares @ $0.11 = $16.50
Total for February:  $86.37

Not too bad for passive income. 

Let’s go ahead and talk about about this month’s purchases now.

Stock Purchases

I mostly DRIP’d the companies that paid out dividends to me this month. I opted not to DRIP a few of the REIT’s this month since my position in them is pretty high and I’m getting a little low on cash in the account. Also the same with AAPL since they’ve been skyrocketing lately on the news that Berkshire bought even more shares. Oh well, let’s see what I purchased. 

  • 1 shares CVS @75.97

CVS is a well known pharmacy company that operates retail drugstores, online retail pharmacy websites and its retail healthcare clinics.They’re currently trading at a P/E Ratio of 17 after a recent dip on news that they lost a contract. I still believe that CVS is here to stay and they are currently paying a 2.4% dividend yield. They have a 32 year history of paying dividends and are currently classified as a Dividend Contender with 14 years of increasing dividends. They currently sit around a 42% EPS payout ratio which means that the dividend is pretty safe. They also have a 5 year dividend growth rate of over 27%!  The board just announced an 18% increase to the annual dividend which means each share of CVS returns $2.00 in dividends a year. This adds $1.72 to my annual income!

  • 1 share of T @ 41.99

Most people know AT&T since it’s a Dividend Champion with 33 years of increasing dividends. They currently sit around a 4.6% dividend yield with a dividend growth rate of 2.2% While not the most aggressive dividend stock, they are by far a pretty reliable. Things to watch out is they’re over 80% on their EPS payout ratio.  This adds $1.96 to my annual income!

  • 1 share of VZ @48.40

Another communications stock? Yep, it’s alright to buy shares of companies that are in direct competition with each other. I don’t think VZ or T are going anywhere anytime soon. Verizon also sits at a 4.6% dividend yield and is considered a Dividend Contender with 12 years of increasing dividends. They sit at a slightly higher Dividend Growth Rate of 3% compared to T but their EPS Payout Ratio is at a more comfortable 67%. This adds $2.31 to my annual income!

  • 1 share of XOM @82.75

Exxon Mobile is a 34 Year Dividend Champion currently sitting at a 3.6% dividend yield with a 3-year DGR of 6.6% Their eps payout ratio is higher than I’d like to see from them but they still keep paying out the dividend. This adds $3.00 to my annual income!

  • 20 shares of GILD @ 68.42

GILD is a biotech company that just recently started paying dividends. They dipped pretty hard recently so I decided to add some more shares. They currently sit at a 3% dividend yield. This is one of my more riskier plays so I don’t recommend going in them if you’re a beginner. This adds $20.80 to my annual income!

  • 1 shares of PG @ $90.66

PG is a 60-Year Dividend Champion that currently sits at a 2.9% dividend yield. There’s a reason why PG sits on top of a lot of dividend bloggers “always buy” lists. They’re a solid company that is worthy of anybody’s portfolio. This adds $2.68 to my annual income

  • 1 shares of OHI@ $31.50

OHI is a 14-Year Dividend Contender with a dividend yield of 7.5%. The have an average DGR of 8% but are high when it comes to EPS Payout Ratio. I’ll have to keep an eye out for them as well. This adds $2.48 to my annual income

  • 1 shares of CAT @ $98.80

This was a DRIP’d purchase of a 23-Year Dividend Contender. Their yield sits just over 3% with an average DGR of 9.6%. Their payout ratio is higher than I would like as well. But this adds $3.08 to my annual income.

All these stock purchases have added a grand total of $38.03 to my annual income.

Stock Sells

None.

Conclusion

We’ve added $38.03 to my annual income in this month alone. While the majority of my purchases were just DRIP’s, I’m still happy with the outcome. The portfolio won’t be exciting for a few months until the car gets paid off, but after that the sky is the limit!

I hope everybody else had a good month. See ya next time!

Dividend Portfolio Update for January 2017

dividend portfolio money jar

It’s time once again to take a look at my Dividend Portfolio and see how we fared for January 2017. A lot has happened in the United States the last few months and perhaps the biggest piece of news is that Donald Trump has been inaugurated as the 45th president of the United States. While this brings a bunch of uncertainty to the table, we should all hope for the best and that his campaign slogan, “Make America Great Again”, does in fact come true and I wish him the best.

This month marks the first month where I started to manually DRIP my dividend payouts back into the companies in order to compound my future returns in hopes of one day being able to quit my full time job and concentrate on the things that I would love to do.

Let’s take a look at what happened to the dividend portfolio last month!

Deposits

Twice a month, I usually tell my Robinhood App account to auto-deposit $150 from my checking account. I decided my goal for this year was to try and put more money into my dividend portfolio, so I went ahead and upped my auto-deposit amount to $200. So every month, the Robinhood App will autodeposit $400 from my checking account. I also managed to put an additional $500 into the account this month, $250 more than my stated Goals for 2017.

Total: $200 + $200 + $500= $900

Dividend Payouts

SDIV 100 shares @ $0.12 = $12.05
MAIN 77 shares @ $0.18 = $14.25
STWD 40 shares @ $0.48 = $19.20
CAH 20 shares @$0.45 = $8.98
CSCO 17 shares @ $0.26 = $4.42
CLDT 149 shares @ $0.11 = $16.39
Total for January:  $75.29

While it’s not as good as the monstrous income that I received last month, I can’t complain at all about receiving free passive income to the tune of $75.29. Of course, I went ahead and reinvested the dividends back into the companies to keep the return compounding in the future. This means I spent some more cash in my account to round up to full shares.

The only dividend that I didn’t reinvest was MAIN since I sold out of that last month. In its place, I went ahead and contributed MAIN’s dividend to buying a share of GE. 

Let’s go ahead and talk about about this month’s purchases now.

Stock Purchases

I  purchase a few new stocks in January and manually DRIP’d the companies that paid out dividends to me this month. 

  • 7 shares CVS @80.00

CVS is a well known pharmacy company that operates retail drugstores, online retail pharmacy websites and its retail healthcare clinics.They’re currently trading at a P/E Ratio of 17 after a recent dip on news that they lost a contract. I still believe that CVS is here to stay and they are currently paying a 2.4% dividend yield. They have a 32 year history of paying dividends and are currently classified as a Dividend Contender with 14 years of increasing dividends. They currently sit around a 42% EPS payout ratio which means that the dividend is pretty safe. They also have a 5 year dividend growth rate of over 27%!  The board just announced an 18% increase to the annual dividend which means each share of CVS returns $2.00 in dividends a year. This adds $14.00 to my annual income!

  • 1 share of SDIV @ 21.28

With Robinhood, buying one share of a stock with no trading fees is 100% doable. This means manually DRIPing is something that can be done if you don’t mind paying the extra capital to round it up to a full share. I went ahead and purchased one more share of SDIV, a dividend ETF. Currently, SDIV is giving a 7.3% yield. This adds $1.57 to my annual income!

  • 1 share of CAH @73.45

Another DRIP’d purchased that comes from Cardinal Health. The dividend yield sits at 2.3% and returns $1.80 per share a year. This Dividend Contender currently sits around a P/E ratio of 18 and has been paying increasing dividends for 20 years. At an EPS payout ratio of only 43%, this stock has plenty of oomph to keep raising their dividends over the years. CAH has a 5-year dividend growth rate of 15.3% too! This adds $1.80 to my annual income!

  • 2 shares of CSCO @30.75

DRIP’d. CSCO provides technology and services to its customers including cloud, video, mobility, security, collaboration and analytics. They currently sit around a P/E ratio of 14 and has been paying increasing dividends for the last 6 years. They have also been aggressively growing their dividend with their 1/3/5 year DGR at 20%/15%/40% respectively. Their EPS payout ratio currently sits at 49% with plenty of room to grow. I accidently bought 2 shares of this stock, oh well. This adds $1.04 to my annual income

  • 1 share of CLDT @ 20.25

CLDT is a REIT that specializes in premium-branded upscale extended-stay and select-service hotels. I’ve recently trimmed some shares of CLDT in the past due to being over extended but I’ve had nothing but success with them so I’m not too worried about grabbing an extra share. They currently sit at a 6.4% div yield and are classified as a Dividend Challenger with 7 years of increasing dividends. As a bonus, they pay out monthly in 3 month spurts.  This adds $1.32 to my annual income.

  • 3 shares of GE @ $30.02

GE is an industrial company that makes aircraft engines, power generation and oil and gas production equipment to medical imaging, financing and industrial products. They’re currently returning a 3.1% dividend yield and have a rocky past with being removed recently from the Dividend Challengers list for not increasing their dividend. While they don’t fit my dividend criteria, they still have been paying dividends for the last 54 years. This adds $2.88 to my annual income.

  • 30 shares of SBSI @ $36.20

SBSI is a rather unique stock that not only pays dividends in the form of cash quarterly, but they also pay out a dividend in stocks in the form of a 21:20 split every year in April. At on top of that they have been paying a special dividend in the last quarter of the year, the return on them have been amazing. They are a Dividend Contender has been increasing dividends for the last 22 years. They’re currently sitting at a P/E ratio of 19 and have a 2.7% dividend yield with an EPS payout ratio of 53%. This adds $30.00 to my annual income.

  • 10 shares of GILD @ $70.95

GILD is a biotech company that focuses on the discovery, development and commercialization of medicines in areas of unmet medical needs. They’ve had a rough year and the price has driven the dividend yield to 2.6%. They are also new to the dividend game since they only just started in June of 2015. This is one of my more risky dividend plays. This adds $18.80 to my annual income.

  • 15 shares of TGT @ $63.95

I’ve jumped in and out of TGT in the last year mostly due to the retail sector being hit pretty hard lately. I decided that it was a good time to get into this Dividend Champion. They have 49 years of increasing dividends! Add on to that they have a 3/5/10 year DGR of 13%/16%/18% respectively. Currently, they sit on a EPS payout ratio of 44% This adds $36.00 to my annual income!

  • 27 shares of QCOM @ $55.20

QCOM is a a digital communication company that has recently been hit pretty hard due to a pending lawsuit where the company dropped 12% in a day. I figure it was a good time to take a bite. They currently trade at a P/E Ratio of 16% and offer a dividend yield of 3.9%. They are a dividend contender with 14 years of increasing dividend and currently sit at a 3/5/10 Dividend Growth Rate of 16%/19%/16% respectively. With an EPS Payout ratio of 54%, QCOMM still has room for more growth. This adds $57.24 to my annual income!

  • 1 share of STWD @ $22.60

STWD is a REIT that I got into last year and have been very happy with in terms of growth and yield. The one share purchased is DRIP’d from their dividend. Since I’ve purchased them, the share price has gone up almost 20% with 4 dividend payments of $0.48 a share. While they don’t raise their dividend every year like other stocks, they are at least consistent with a dividend yield of 8.5%. I don’t recommend them right now since they don’t follow our goals but I’m going to stick with them until they do something I don’t like. This adds $1.92 to my annual income.

All these stock purchases have added a grand total of $166.56 to my annual income.

Stock Sells

None.

Conclusion

We’ve added $166.56 to my annual income in this month alone. This is outstanding and I wish I can keep up this pace for the entire year. I hope with frugal living and passive income from alternate sources, that I can continue to add more into my account in order to keep purchasing more high quality dividend growth stocks. I hope everybody else had a great month and I’ll see you next time!

Dividend Portfolio Update for December 2016

money_jar

December is known to be one of the biggest holiday months of the year and no matter what holiday you celebrate, I hope everybody found some time to be with your love ones and enjoy the season. The month is also known as the month of giving and as it relates to dividends, it was a very blessed month with some high quality dividend stocks giving back plenty to my account. (That was cheesy, I know)

Let’s take a look at what happened to the Dividend Portfolio last month!

Deposits

As always, I set up my Robinhood account to auto-deposit from my checking account to the tune of $150 twice a month. This coincides with the date that my paycheck from my day job clears into my account. This puts me with at least $300 a month to invest each and every month.

I had anticipated that the month of December would wain heavily on my additional deposit that I try to accomplish every month on top of the auto-deposit. With that being said, I still managed to deposit and additional $250 into the account. No idea what to buy just yet, but I’m sure there’s some good quality dividend stocks for a beginner like me to find.

.Total: $150 + $150 + $250 = $550

Dividends

It was a very strong month in terms of payouts with the dividend portfolio returning $230.23 in dividend income. The following table lists them out.

PSX 15 shares @ $0.63 = $9.45
F 50 shares @ $0.15 = $7.50
JNJ 10 shares @ $0.80 = $8.00
SO 15 shares @ $0.56 = $8.40
SDIV 100 shares @ $0.12 = $12.05
MAIN 77 shares @ $0.18 = $14.25
KO 62 shares @ $0.35 = $21.70
FLO 150 shares @$0.16 = $24.00
DUK 20 shares @ $0.86 = $17.10
MAIN 77 shares @ $0.28= $21.18
TROW 46 shares @ $0.54 = $24.84
ARCC 100 shares @ $0.38 = $38.00
CLDT 216 shares @ $0.11 $23.76
Total for December:  $230.23


This definitely makes up for the lack of income from November! 

Purchases

I purchased quite a bit in the December.

  • 10 shares V @75.50

Visa has been on a dip since November and I decided to pick some shares up. Thankfully I seemed to have gotten the shares near the bottom and it has been increasing slowly back towards its price. The current yield is pretty low at just .84% but I’m confident that they will continue to grow as credit card’s continue to be the way a lot of people pay for things. V adds $6.60 to my annual income!

  • 7 shares DUK @72.60

I continue to add to my position of DUK as it took a dip. Not a big addition but a cheap one nonetheless. It has since seen a bump back up and I’m only regretful that I didn’t purchase more at that price. I wanted to be careful and not overextend myself. @72 a share, that put DUK’s yield up towards 4.7% which is amazing.   DUK adds $23.94 to my annual income!

  • 15 shares HCN @61.48

Welltower Inc is an independent equity REIT that engages in senior living and health care properties. They too also recently hit a dip and rebounded. I managed to purchase them near the low of that dip as well. I feel I might be overinvesting with REIT’s lately but the yields can be alluring. Evening out investments in other sectors in the future, I hope will alleviate the issue. HCN is currently over a 5% yield still. HCN adds $51.60 to my annual income!

  • 10 shares OHI @ 28.70

Omega Healthcare Investors is another REIT that specializes in long-term healthcare facilities. Another case of a stock taking a rather vicious hit and rebounding. This was to add to the positions I had already. OHI adds $24.40 to my annual income!

  • 10 shares DEO @ 100.00

It wouldn’t look like it but DEO just oozes name recognition with their various labels of alcohol. With names like Smirnoff, Captain Morgan, Baileys, Guinness and Crown Royal, they definitely have been ingrained in our culture. They also hit their new 52 week low for the year and I decided to take a bite. Another good sense of timing as the stock has since went back up. I managed to snag it with a yield of 3.1%. This adds $31.20 to my annual income!

I also started a new Dogs of the Dow Experiment that you can read up on if you haven’t yet. The stock found me buying ten additional stocks that I’ll quickly outline below.

3 shares of IBM @ 165.90 5 shares of CAT @ 92.80
9 shares of MRK @ 58.80 15 shares of PFE @ 32.50
6 shares of PG @ 84.05 3 shares of BA @ 155.78
17 shares of CSCO @ 30.20 10 shares of VZ @ 53.40
5 shares of XOM @ 90.40 4 shares of CVX @ 117.65

These 10 stocks add $149.18 to my annual income.

Sells

  • 4 shares TSLA @ 200.25

I did a little flip of TSLA for a little over 6% profit. Not that big of a profit considering I only had 4 share, but enough to purchase an additional share of something in the future. I’m sure this flipping will come back to haunt me but anytime I see a stock undervalued, it makes me anxious to flip it. I need to stop that.

  • 67 shares of CLDT @ 20.69

I had a good run with CLDT. It dipped pretty hard for awhile and I average down to compensate, all while taking their monthly dividends. It’s since rebounded to give me about a 11% return in growth. I felt I was way too heavy into CLDT (It was about 13% of my portfolio). I like CLDT though, so if they happen to dip back down to $16/$17 again I might take a nibble. This drops my annual income by $88.44.

  • 77 shares of MAIN @ 36.78

Main was one of the first few stocks that I purchased once my Dividend Growth Portfolio was up and running. The attractive yield, monthly payments and growth is what originally attracted me to it. They have since exploded in share price. The stock price grew about 24% as well as awarded me monthly dividends for the entire year. On average, I was getting about $14 dollars a month in dividends alone! They also paid out 2 special dividends for the year! Right now, I feel they are very expensive for the price and I decided to go ahead and cash out. I wouldn’t mind going back into them if they ever dipped back below $30.

Conclusion

You can always view my current dividend portfolio.

That’s it for the month of December!  Next month is a whole new year with a new president. Not sure what to expect but I’ll do what I can  in order to achieve the passive income dream!

~Noob