Wednesday, October 28, 2015

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

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!

8 comments :

  1. Good report FerdiS. I picked up QCOM & STAG also recently. I expect to be right about where you are now next year so its exciting to see your report.

    ReplyDelete
    Replies
    1. QCOM and STAG are solid dividend growth stocks! I'm looking forward to hearing about your journey... best of luck with your portfolio and making progress to financial freedom!

      Delete
  2. Very nice and steady growth Ferdi! Amazing result in just 2 years.
    Any tips on how to get to $2500/mo of fresh capital perhaps? :)

    Keep it up!
    Best wishes, DfS

    ReplyDelete
    Replies
    1. Thanks, Dividend for Starters! Well, I've been at it for nearly 3 years now (1 January 2016) would be DivGro's 3rd anniversary...

      How to get $2,500/mo question of fresh capital is a tricky question. Saying "make more and spend less" probably isn't very helpful :-)

      For me, the answer is some combination of the following: Work hard. Work smart. Dream big. Express yourself. Be lucky. Choose right. Love life.

      Cheers
      FerdiS

      Delete
  3. Looks like another solid quarter for the DivGro portfolio. Consistent capital investments and dividend are a powerful combination. Best of luck to close out the year on a strong note. Great to see the progress of others as it just helps to motivate me even more.

    ReplyDelete
    Replies
    1. Thanks, Passive IncomePursuit. I agree, it is important to deploy new capital while you can and reinvest dividends to accelerate growth. I'm happy to hear that what I'm doing is motivational -- I've certainly been inspired and motivated by you and other bloggers in this field.

      Delete
  4. Thanks for putting together this quarterly summary, it has been a busy one for you. Your dividend income is fantastic. You are at the point now where if you chose to, you could fund new investments purely of of dividends instead of new capital. your post is inspiring. Thanks for sharing.

    ReplyDelete
    Replies
    1. Hi Investment Hunting! Thanks for reading and commenting. I like the fact that my monthly dividend income can contribute to new purchases. For DivGro, though, I like investing in lots of $2,500 each, so it will be a while before my dividend income can stand in for a monthly buy.

      I'm glad that my writing inspires you -- I've benefitted in the same way from many other dividend growth investment bloggers!

      Take care and good luck!

      Delete

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