DRIP with Robinhood App – The Manual Way

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Does the Robinhood App allow investors a chance to DRIP? If you’re looking for the Robinhood App to provide a dividend reinvestment plan, you’re out of luck. At the time of this post, Robinhood does not provide any way to do it. They also don’t allow partial shares, so if they are going to implement it in the near future, they’ll have to radically change their overall design for Robinhood. Hopefully they’re working towards adding it in the future but until then, what do we plan on doing with our dividends from our high quality dividend growth stocks?

What I’m going to start doing is manually reinvesting the dividends back into the company. Yep, a manual DRIP so to speak. Every time I get a dividend from a stock in my portfolio, I’ll take that money and apply it to an additional share(s) in the company. While not quite the definition of DRIP, it’s the closest thing we can do with the Robinhood App. And considering it’s free trades, it sort of acts the same.

There’s a few cons to this approach, let’s go ahead and discuss them.

  1. No Partial Shares – With the Robinhood App not allowing partial shares, we’re going to have to provide the transaction with extra equity in order to round it up to a full share. While this is true, I always keep a percentage of cash in my account and I can cover the single share with no problem. I know this might not be the case for everybody, so the cash dividend will have to sit in your account until you accumulate enough to do a transaction.
  2. Not Automatic – The beauty of a DRIP is that it’s automatic. That means you can go about your life and not worry about the money that your stocks pay out to you. For those hands off investors, this is a god send. That just means we’re going to have to do a little extra work. This comes with some added benefit though–if we believe a stock is way overvalued, we can put their dividends to use in a separate stock that we feel is undervalued. Again, this might not be for everybody, but its something to think about.

While not perfect, I believe this is a decent way to get started with doing a Robinhood DRIP. Let me know in the comments if there’s a better way!

You can always check out my current portfolio here. You can also follow me on Twitter.

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!

Dividend Portfolio Update for December 2016

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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

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.

 

Goals for 2017 – Learning to be S.M.A.R.T.

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Goals are important to help an individual grow in both their professional and personal lives. We hear about them everywhere: I want to lose weight, I want to get that promotion, I want to make extra money this year, etc. Some goals are easy to achieve and others are near impossible unless someone plans a course of action before stepping out to do it.

But what makes a goal reachable? There are different sets of rules to help you, and like all rules out there, there is a mnemonic acronym tied to each one. The one I like to use is the S.M.A.R.T. criteria.

  • Specific – target a specific area for improvement.
  • Measurable – quantify or at least suggest an indicator of progress.
  • Achievable– sanity check on if it can be done.
  • Realistic – state what results can realistically be achieved, given available resources.
  • Time-related – specify when the result(s) can be achieved.

There are different words that can be swapped in SMART but for the most part, it should help everyone create goals for themselves.

With the new year coming, I like to go ahead and spend some time and figure out what I would like to do. My actions are based on these goals, and using the SMART system, I make sure that I can do them. I divide my goals to fall under either Personal or Professional.

Personal

Pay off the Jeep:  At the time of this post, I owe about $8,400 on my car loan. I have enough to pay it off but I haven’t been in a hurry since the interest rate is pretty low.  The minimum payment on the loan is $450 dollars but I’ve already been paying $600 a month. I am financially able to pay it off this year if I add some extra cash on top of the extra cash I  already put on it. I will be adding an extra $100 dollars a month ($700) and my goal is to pay it off in 2017, which should free that $600 a month when its done!

Increase Deposits for 2017: I currently auto-deposit $300 dollars a month and put an additional deposit of 100-500 dollars depending on how the month goes. Some months are good while others I skimp on the extra deposit. My goal is to put at least an extra $250 bucks into the account. If I consistently do this every month, then my goal is to add an additional $3k for the year. This number is do-able I believe, even with the extra $100 going to the car loan noted above.

Get In Shape: I’ve been neglecting my health for the last few years and I need to make a change in order to get back into a healthy shape. Good health is the best investment that one can make. I will be enrolling in a local gym in my area. The cost should be around $15 dollars a month. An expense that I believe is worth it. I’m setting a goal to go three times a week.

Professional

Start Posting Weekly on DividendNoob – I like to build the website more and the way to do that is to post more quality content on a consistent basis. I’ve been posting weekly  for the month of December and have been getting good results from it.  For instance I’ve hit over 500 page views for the website and before that, I would be lucky to hit 50. Interaction on twitter and other dividend blogs should also help Dividend Noob grow as well.

Youtube – Sometimes information is easier to digest in video/audio form for some people. I would like to get a youtube channel up and going where I talk about my portfolio and bring up some potential investments that are on my watchlist and go through my thought process while doing my due diligence. The time requirement for this is pretty heavy at first but my goal is to start with at least one video every monthly portfolio update.

 

Those are my goals and I hope everybody has a good New Years and I’ll see you in 2017!