Quarterly Review, Q3-2015

The third quarter of 2015 has been volatile, yet quite quiet for DivGro. The market correction in August saw the S&P 500 drop from its 52-week high of 2,135 down to 1,868 – or about 12.5%. As I write this article, the S&P 500 sits at 2,066, so much of the losses have been recovered.

For longterm investors, market corrections create opportunities to buy shares of great companies at deflated prices. While it feels weird to celebrate a market correction because your portfolio may show losses, those losses usually are temporary and certainly unrealized unless you sell.

For dividend income investors, the situation is rosier. As long as the fundamentals of your stocks do not change, market corrections have no impact on your dividend income. Dividends are paid per share, independent of the current share price. In fact, when prices drop, you could use dividend income or fresh capital to buy more shares at a discount.

Dividend growth investors have it even better. While the markets may be correcting, most dividend growth stocks continue to pay and regularly increase dividends. As a dividend growth investor, doing nothing except owning dividend growth stocks results in increasing income over time.

So, while things may have been quieter for DivGro (the blog), DivGro (the portfolio) has been purring nicely, like a well-oiled (dividend income generating) machine.

In my previous quarterly review (Q2-2015), I reported projected annual dividend income of $6,338 and year-to-date dividend income of $3,118. These numbers no stand at $6,956 and $4,836, respectively. My year-end goals are to increase projected annual dividend income of $7,500 and to earn $6,000 in dividend income. Happily, I'm on track with both of these goals!

Dividend Income

DivGro's dividend income in Q3-2015 totaled $1,718, slightly lower than last quarter's total of $1,781 but up 38% from the year-ago quarter, Q3-2014.


DivGro's average percentage payback is 6.44%, up from 5.83% at the end of Q2-2015. Percentage payback relates dividend income to the total amount of capital invested.

Transactions

I've deposited capital funds in the amount of $8,114 to DivGro this past quarter, including three regular monthly deposits of $2,500 each and passive income deposits totaling $614. Along with reinvested dividend income, these deposits allowed me to initiate several new positions in DivGro:

Company	Ticker	Date	Transaction
Qualcomm Inc	QCOM	16 Jul	bought 38 shares at $64.43 per share
Stag Industrial Inc	STAG	29 Jul	bought 140 shares at $18.94 per share
Apple Inc	AAPL	30 Jul	bought 22 shares at $121.98 per share
Apple Inc	AAPL	10 Aug	bought 22 shares at $118.43 per share
Philip Morris International	PM	25 Sep	bought 34 shares at $81.27 per share
ExxonMobil Corp	XOM	25 Sep	bought 35 shares at $73.27 per share

Additionally, I sold 27 shares of PartnerRe Ltd (PRE) after the company agreed to be acquired.

I also sold all my shares of both Baxter International (BAX) and Baxalta Interntional (BXLT). After spinning-off BXLT, the company became the target of an unsolicited takeover offer, while BAX announced a significantly reduced dividend.

DivGro now contains 46 stocks.

Dividend Adjustments

Ten of DivGro's holdings announced dividend increases in Q2-2015:

Company	Ticker	Increase	Annual Div	New  YoC
Walgreens Boots Alliance, Inc	(WBA)	6.67%	$1.44	2.54%
Cummins Inc	(CMI)	25.00%	$3.90	2.90%
Omega Healthcare Investors, Inc	(OHI)	1.85%	$2.20	5.82% and 6.16%
ConocoPhillips	(COP)	1.37%	$2.96	4.57%
Energy Transfer Partners, LP	(ETP)	1.97%	$4.14	8.73%
Macquarie Infrastructure Company	(MIC)	3.74%	$4.44	5.16%
Microsoft Corporation	(MSFT)	16.13%	$1.44	4.53%
Philip Morris International	(PM)	2.00%	$4.08	5.02% and 5.02%
Realty Income Corporation	(O)	0.26%	$2.29	4.51% and 4.83%
Altria Group, Inc	(MO)	8.65%	$2.26	6.40%

Although Nippon Telegraph and Telephone Corp (NTT) increased their dividend, in US dollar terms it actually declined. The net result of these transactions is that DivGro's projected annual dividend income increased by $618 to $6,956, an increase of 9.75% over Q2-2015. Average yield on cost (YoC) is 4.42%, up from 4.39% at the end of Q2-2015.

Market Value

At the end of Q3-2015, DivGro's market value of $146,707 represented a simple loss of 1.07% on $148,287 invested. Of course, a simple loss does not take into account the timing and size of cash deposits. DivGro's time-weighted return since inception is 15.97%.

Other Highlights

Following are some additional highlights of Q3-2015. 

Page Views

On 25 September 2015, DivGro crossed the 310,000 page view mark, adding a little more than 50,000 page views in Q3-2015. The daily average page views continues to steadily climb:

	30 June 2015  daily average page views since inception: 286
	13 July 2015  daily average page views since inception: 293
	27 July 2015  daily average page views since inception: 299
	13 August 2015  daily average page views since inception: 304
	3 September 2015  daily average page views since inception: 308
	25 September 2015  daily average page views since inception: 311

Currently, DivGro averages about 575 page views per day.

Popular Posts

In Q3-2015, I wrote 22 articles, including 9 premium articles for Seeking Alpha and 1 article for The DIV-Net. Here are links to the 3 most popular premium articles published on Seeking Alpha in Q3-2015:

• 10 July: 10 Dividend Growth Stocks For July 2015 (4,641 page views to date)
• 23 July: My 3 Loyal Sons: How A Wacky Idea Inspired My Sons... (3,098 page views to date)
• 20 July: 6 Dividend Increases, July 13 To July 17, 2015 (2,845 page views to date)

The 3 most popular articles posted exclusively on my blog are:

• 15 July: Baxter Spins-Off Baxalta (820 page views to date)
• 2 June: Recent Sell: Baxter and Baxalta (708 page views to date)
• 30 April: Added Real Estate Sector To My Watch List (707 page views to date)

Outlook For Q4-2015

I have big plans for Q4-2015, including doing some portfolio maintenance. I'll probably sell some stocks I no longer believe should be in my portfolio and try to counterbalance some capital gains I earned in the 2015 tax year. Furthermore, I'm thinking about merging the holdings of another portfolio I own (at Scottrade) with those in DivGro. The stocks in my Scottrade account used to be a mixture of speculative and dividend stocks, but I've now transitioned to holding only dividend stocks. I still need to figure out exactly how to merge and how to present details about these stocks on this blog. If you have ideas about how to do this, please share them in the comments below!

Thanks for reading!