I've finalized the transfer of our trust account from Scottrade to Interactive Brokers where commission rates are more favorable for options trading. I still need to transfer stocks from one of my FolioInvesting accounts to Interactive Brokers so I can execute options trades on those stocks as well. Speaking of options, in January I secured $727 in options income. Recall that I tally secured options income, which is income received from closed options trades. Please see my latest options update for details.
In January I received dividend income of $1,095, essentially doubling the dividend income I received in January 2016. Additionally, I recognized past dividend income of $401 from a Roth IRA that I'm now managing as part of DivGro. DivGro's projected annual dividend income (PADI) increased to $12,398, a year over year increase of 65%!
In last month's review, I mentioned that I published my first Editor's Pick article at Seeking Alpha: Top Holdings of Dividend ETFs. The article generated lots of interest and now has topped 26,000 page views! In January, I published a similar analysis, this time looking at the holdings of established dividend growth bloggers: Top Holdings Of Dividend Growth Bloggers, 2017 Edition. While not as popular as the first analysis, I think the results are worth reviewing. In fact, based on backtesting using the Portfolio Visualizer, the 25 top holdings of DG Bloggers outperformed the 25 top holdings of Dividend ETFs.
Generating a growing dividend income stream is the main goal of DivGro. I review my dividend income regularly and consider factors that could affect future dividend payments.
In the month of January, I recorded dividend income totaling $1,496. Fifteen different DivGro stocks paid dividends. DivGro's projected annual dividend income (PADI) now stands at $12,398. Here is projected monthly dividend income (red line) plotted against monthly dividends:
Another way to see progress is to compare dividend income by month:
In January, I added shares to 3 existing positions:
• AGIC Equity&Convertible Income Fund (NIE)
• Microsoft Corp. (MSFT)
• Wal-Mart Stores, Inc (WMT)
The shares added for MSFT and WMT are positions I hold in my Roth IRA, which I'm now managing as part of DivGro.
As a result of these transactions, DivGro's PADI increased by $114.
The following stocks announced dividend increases:
• Dominion Resources, Inc (D)
• Kimberly-Clark Corporation (KMB)
• Valero Energy Corporation (VLO)
The following stock announced a dividend decrease:
• PennantPark Investment (PNNT)
DivGro's PADI decreased by $203 due to these dividend changes.
I received dividends from 15 different stocks this month, for a total of $1,496 in dividend income:
• Chubb Limited (CB) – $16.56
• Cisco Systems, Inc (CSCO) – $78.00
• The Walt Disney Company (DIS) – $177.06
• Eaton Vance Tax-Managed Global Diversified Equity Income Fund (EXG) – $58.86
• Kimberly-Clark Corporation (KMB) – $92.00
• Main Street Capital Corp. (MAIN) – $61.05
• Altria Group Inc. (MO) – $45.75
• Microsoft Corp. (MSFT) – $277.00 (from past dividends received)
• AGIC Equity&Convertible Income Fund (NIE) – $112.48
• Nike Inc (NKE) – $8.46
• Realty Income Corp. (O) – $10.13
• PennantPark Investment (PNNT) – $280.00
• Reynolds American, Inc (RAI) – $92.00
• STAG Industrial Inc (STAG) – $27.80
• Wal-Mart Stores, Inc (WMT) – $159.04 ($124.54 from past dividends received)
While I no longer compare DivGro's performance to the markets, it is worth looking at the context within which we're investing:
|Dec 31, 2016|
|Jan 31, 2017|
In January, the DOW gained 0.51%, the S&P 500 gained 1.79%, and the NASDAQ gained 4.30%. The yield on the benchmark 10-year Treasury note rose from 2.446 to 2.451%.
Below are charts showing the market activity of these indices in January, courtesy of Google Finance. (Click on the charts to see detail). Each chart shows a 20-period exponential moving average (in red). I've also included a 20-period relative strength index below the main chart.
At the end of January, DivGro's market value was $361,177. This represents an increase of 1.80% over last month's total and an increase of 76% since the end of January 2016.
|Jan 31, 2016|
|Dec 31, 2016|
|Jan 31, 2017|
Given the current market value of $361,177, my portfolio has delivered a simple return of 22.98% since inception. In comparison, DivGro's IRR (internal rate of return) is 11.43%. (IRR takes into account the timing and size of deposits since inception, so it is a better measure of portfolio performance).
Here's a chart showing DivGro's market value breakdown. Dividends are plotted at the base of the chart so we can see them grow over time.
Here is a snapshot of DivGro's state on the last day of January 2017:
I track the yield on cost (YoC) for individual stocks, as well as an average YoC for my portfolio. DivGro's average YoC decreased from 4.26% last month to 4.24% this month.
Another interesting statistic is percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 10.28%, up from last month's 9.85%.
Finally, DivGro's projected annual yield is at 4.22%, down from last month's value of 4.31%. I calculate projected annual yield by dividing PADI ($12,398) by the total amount invested ($293,695).
I've set some challenging goals this year:
- PADI: Increase projected annual dividend income to $14,400
- Dividends: Earn $12,960 in dividend income
- Options: Earn $8,400 in options income
- Seeking: Write 64 premium articles for Seeking Alpha
- DivNet: Write 6 articles for The DIVNet
Thanks to recognizing some past dividend income following the consolidation of my Roth IRA into the DivGro fold, I'm happy to say that my Dividends goal is ahead of schedule. Similarly, I'm ahead of schedule with Seeking having published 7 premium articles in January. My PADI and DivNet goals need attention.
In February I'll continue to consolidate our investment accounts. My goal is to manage all our accounts using DivGro's strategy of dividend growth investing. When completed, DivGro will be distributed over five different accounts, one trust account at Interactive Brokers and four IRA's (a traditional and a Roth IRA for me, and a traditional and Roth IRA for my wife) at FolioInvesting. I expect the retirement account consolidation to be completed in March while finalizing the trust account at Interactive Brokers will take a while longer. Meanwhile, I'm happy to be trading options at Interactive Brokers now. The commissions are quite reasonable and allow for much more flexibility, including the ability to roll options forward and to close options early.
Please see my Performance page for various visuals summarizing DivGro's performance.
Thanks for reading! How did your portfolio perform last month? Please comment below.