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!

2016 Dividend Portfolio – Year in Review

The year has finally ended and I thought it would be a good to take some time and look back at the dividend portfolio to see exactly how it performed; if there were any big clear winners or clear losers and if there are any lessons to be learned from it all.

Let’s first start our look at the overall market indexes. The S&P 500 had a positive 10% increase for the year with The Dow up over 13%. Even if you remove the post-election surge in November, the market still has a positive return for 2016.

Portfolio wise, my return has been 14.72% for the year with the majority of the returns coming from stock growth. I was lucky enough to purchase a lot of high quality dividend paying stocks on some dips and they have rebounded and have went even higher. The bulk of my return has been since the Trump rally in November however. Before that, i was up about 5%. The following image shows the graph in the Robinhood App on the yearly scale.

2016 dividend portfolio return

Let’s take a look with how much of the return is from dividends vs stock growth. The following image is just a spreadsheet where I keep track of dividends paid out on a monthly basis.

2016_dividends per month

At almost $1k in dividends being paid out to my account, this accounts for over 20% of my yearly return.  Not too shabby for passive income.

The biggest winners, growth wise, of my portfolio are MAIN, STWD, T and JNJ.

I first started my position in MAIN in December of last year and have been collecting their monthly dividends ever since. They pay 18 cents a share normally, but add on top of that they also paid a special dividend in June and December of this year, then we can see why MAIN is a fun stock to own. They have had a big year in growth as well since I’m up 26.17% on it.  At the time before this is posted, I have sold my position in MAIN to lock in the growth. I hope to maybe get back into it once it’s closer to it’s fair price.

STWD is another stock that I didn’t realize would perform so well when I first bought it in March 2015. It still has a dividend yield over 8% and I’ve received three dividend payments of 48 cents a share. On top of that, it’s also returned 21.3% growth. STWD is another stock that I need to revisit because I’m not sure if the dividend is sustainable. Most analyst have STWD as a hold right now and I believe I will follow that advice for the time being.

T is a telecommunications giant that’s been a dividend champion for 33 years. What’s also impressive is the 25% total return I have as well as the three dividend payments I received since owning it back in January 2015. The stock still has a PE Ratio under 20 and gives a dividend yield of 4.5%. My only regret is not buying more. Hindsight.

JNJ is another monster in the dividend champion list that has been raising dividends for 54 years. Since I’ve purchased them in January 2015, they have given my portfolio a 19.7% return, as well as four dividend payments. Right now, I believe they are fairly valued and I’m looking to buy more if it happens to dip on any amount. A lot of people have been talking about JNJ being one of the “Always Buys” and I can’t find any fault with that.

The biggest lost of the portfolio came from when I finally sold off my position of CSIQ. It had dropped radically and before I pulled the trigger to dump it, I had lost over 1k. This was before I was committed fully to the DGI brotherhood. But it was definitely a lesson that I needed to learn.

 

Overall, I’m happy with my dividend portfolio. I managed to cobble together a collection of stocks that have beaten the index for the year, which is no easy feat. I have a lot planned for Dividend Noob in the next year, so please stay tuned!

The Great 2017 Dogs of the Dow Experiment

The 2017 Great Dogs of the Dow Experiment

Introduction:

The Dogs of the Dow is a pretty popular investment strategy built around selecting the ten stocks whose dividend yield is the highest out of the thirty stocks that comprise the DJIA. You can read all about it on the wikipedia page if you feel so inclined. This strategy has been heavily debated in the past and I’m not here to talk about the pros and cons. I’m only here to talk about the THE NOOBS GREAT DOGS OF THE DOW EXPERIMENT.

What is the Great Dogs of the Dow Experiment? It’s where I put $500 dollars down on the dogs and see how it fairs at the end of the year— with one caveat.

  1. I already own KO and won’t be buying more. I’ll be picking the 11th place Dog of the Dow stock in its place!

You might be asking: Why only $500? It’s true that $500 doesn’t give you many shares of some of these companies but the idea will be the same. The challenge is to see if they will beat the index for the year. They’re all good quality stocks, so I’m not too worried about it on the long term. At the end of the year, I’ll see how they progressed and add  positions to the stocks that are in the new Dogs of the Dow list. I debated on swapping them out versus keeping them and decided that I’ll just keep them in the portfolio. Sounds Easy enough.

Historically, the Dogs have been doing pretty good when compared to the overall index.

dogsofthedow_returnalltime

Courtesy: http://www.dogsofthedow.com/doggish.htm

The highest return of the chart is what they deem the “Small Dogs” or the bottom five stocks in the top 10.  

Below is the current list of DOGS as of 12/31/16. 

Current Dogs of the Dow

Symbol Company Sector Yield
VZ Verizon Technology 4.30%
PFE Pfizer Healthcare 3.94%
CVX Chevron Basic Materials 3.65%
BA Boeing Industrial Goods 3.60%
CSCO Cisco Systems Technology 3.41%
KO Coca-Cola Consumer Goods 3.37%
IBM International Business Machines Technology 3.36%
XOM ExxonMobil Basic Materials 3.31%
CAT Caterpillar Industrial Goods 3.27%
MRK Merck Healthcare 3.16%

 

As I said before, I’ll be swapping out KO with another stock – in this case it’ll be PG. I made the following purchases:

 

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.

Let’s see how the next year folds out with a new president as well as the market hitting all time highs. It’s always exciting for a new investor to get into new stocks and this experiment will be fun. I’ll be giving progress reports for the stocks quarterly as well as doing some basic due diligence on the 2017 Dogs of the Dow in the coming weeks.

 

Dividend Noob Portfolio Update for November 2016

money_jar

The goal of my dividend growth stock portfolio is simple and I contribute to it every month in order for it to continue returning passive income straight to my account. It currently returns over $1,500 a year and I, in turn, use that money to purchase additional shares of good, strong companies. This creates a snowball effect that piles up bigger and bigger the longer it happens. You might have heard of Dave Ramsay’s Debt Snowball? Well this is even better!

The biggest news item for the month of November was the United States Presidential Election where Donald Trump won the majority of the Electoral College votes but failed to win the popular vote. This will be the fifth person to become president despite losing the popular vote in America. This has caused a pretty divisive split between Americans and we’re far from seeing the last of the fallout due to it. But this blog isn’t about politics, it’s about making passive income in the form of dividend growth stocks!

Let’s see what happened to the portfolio for the last month and I’ll try and give you my thought process for why I did things.

Deposits

In order to help increase the funds available to purchase high quality dividend stocks, I set up for my Robinhood account to pull $150 from my checking account twice a month(7th and 21st).  I set up the withdrawal dates to coincidence on the dates that my paycheck clears into my account. This sets me up with $300 a month without having to do a thing.

I also scheduled a $500 deposit at the beginning of November. One of my goals was to keep adding additional funds to the account every month, on top of the $300 that’s auto-deposited. The amount of money is different every month and depends on how much free cash I have after bills are paid. $500 is a great amount and I continue to strive to meet and or beat this every month!

The next deposit was a speculative decision based off the presidential election. If you followed any of the media concerning the election, many media outlets said the stock market would “crash” or dip hard on a Donald Trump victory. If the stock market did dip then I would be in a good position if I had extra funds in my account to purchase stocks. I transfered $8k from my savings account over into my Dividend Portfolio in case it did happen. After Donald Trump won the election, the stock market ended up rallying and going to new highs which trumped my plans on buying these dividend champions on sale. Oh well.

.Total: $150 + $150 + $500 + $8,000 = $8,8000

Dividends

It was a pretty weak month in terms of dividend payouts with the portfolio only returning $55.67 in income. The following table lists them out.

 

T 25 shares @ $0.48 = $12.00
AAPL 5 shares @ $0.57 = $2.85
SDIV 100 shares @ $0.12 = $12.05
MAIN 77 shares @ $0.18 = $14.25
CLDT 132 shares @ $0.11 $14.52
Total for November:  $55.67


One of my goals in the future is to start looking at good quality dividend stocks that pay their dividends on the weaker months.

Purchases

I purchased quite a bit in November.

  • 5 shares AAPL @110.75

At a dividend yield of 2.06% and a p/e ratio around 13, I thought it was a decent entry point to start my position in AAPL. There were plenty of opportunities to pick up AAPL at the lower price but I was always cautious on their ability to deliver innovation. It’s hard to bet against this giant though and I decided to start a small position for the long term. I’ll be buying a few more shares on the dips as it transitions into a dividend growth stock (hopefully). This position adds $11.40 to my annual income.

  • 84 shares CLDT @16.95

Chatham Lodging Trust is an equity real estate investment trust with the majority of their holdings in upscale extended-stay hotels. One of the highlights of this REIT is the high yield (~7%) and that they pay dividends on a monthly basis. It trades around a Price/FFO ratio of 8.5 times. Hotels tend to not do very well during recessions and with the market at an all time high, I’m going to have to keep an eye on it but I’m pretty confident in them for the time being. This position adds $110.88 to my annual income!

  • 10 shares OHI @28.35

Omega Healthcare Investors is another REIT that invests in long-term care facilities located in the U.S. and U.K. The prime factors in my decision to purchase shares were the solid 14 years of increasing dividends, the current yield of 8.28%, and the latest price drop due to earnings.  This position adds $24.40 to my annual income!

  • 6 shares SO @ 47.10

The Southern Company generates and distributes electricity through coal, nuclear, oil, gas and hydro resources in the AL, GA, FL and Miss. They currently sit at a p/e ratio of around 17 with a current dividend yield of 4.78%. They are new to the dividend payout game and had only just started paying out in 2013. Energy sector has been getting hit pretty hard lately so I felt it was a good time to add to my position on the dip. This position adds $13.44 to my annual income!

  • 10 shares NGG @ 57.10

National Grid plc is another energy stock that distributes electricity and natural gas to the U.K and the U.S. It currently sits at a dividend yield of 5% and just like SO, has been paying dividends since 2013. This position adds $29.60 to my annual income!

  • 3 shares DUK @ 73.84

DUK is another energy stock that’s been getting hit pretty heavily lately which drove it’s p/e ratio to 17.7 and yield to 4.6%. I used my auto-deposit cash to purchase these shares. This position adds $10.26 to my annual income!

Sells

  • 25 shares TGT @ 71.67

I sold out of my shares of TGT after a big bump after earnings to lock in profits. It’s since skyrocketed even higher and I’m a little jealous that I pulled the trigger too early. Oh well, at least i made a decent chunk of profit from it regardless. This reduces my annual income by $60.00.

You can always view my current portfolio.

That’s it for the month of November! Coming up next month is Christmas and the spendthrift nature of the entire month. Here’s hoping I have some amount of money left at the end in order to keep adding to my portfolio!

~Noob

October Dividend Payouts and Portfolio Update

It was another good month for the dividend portfolio as I made $85.55 without doing a single thing. I love passive income, I really do.  It was a big month for purchasing stocks as I had nine buying transactions and only a single selling transaction.

October Portfolio Update

  1. Bought 4 shares of DUK @ $77.35.
  2. Bought 7 shares of KO @ $41.70.
  3. Bought 15 shares of CLDT @ $18.96.
  4. Bought 25 shares of SDIV @ $20.85.
  5. Bought 4 shares of DUK @ $76.07.
  6. Bought 25 shares of CLDT @ $18.15.
  7. Bought 15 shares of SO @ $49.30.
  8. Sold 30 shares of RAI @ 54.88.
  9. Bought 16 shares of TROW @ 63.28.
  10. Bought 10 shares of CAH @ 66.00.

In total, this adds an annual income of $211.96. The portfolio is now generating $1,505.78 a year in income!

October Monthly Dividend

KO 55 shares @ $0.35 = $19.25
RAI 20 shares @ $0.46 = $9.20
SDIV 75 shares @ $0.12 = $9.04
MAIN 77 shares @ $0.18 = $14.25
CAH 10 shares @ $0.45 = $4.49
STWD 40 shares @ $0.48 = $19.20
CLDT 92 shares @ $0.11 $10.12
Total for October:  $85.55

Next month, I expect to make a big deposit into my dividend portfolio account in order to prepare for the election month. I’m not sure exactly what to expect but if there’s a chance to purchase some quality stocks at a discounted price, I will do what I can to take advantage of it!

Until next time!

You can check out my portfolio to see my latest holdings.