Monthly Review of DivGro: June 2017

Welcome to my monthly review of DivGro, my portfolio of dividend growth stocks!

I love quarter-ending months, as most companies pay dividends in these months. And June certainly did not disappoint, as I set another record for dividend income received in a single month! In fact, this is the first time I've collected more than $2,000 in a single month! No fewer than 31 of my positions paid dividends in June.

As for trading activity, June was a busy month. I opened several new positions and added shares to an existing position. Noteworthy is that I've added four non-dividend paying stocks to DivGro! I have yet to report on these trades and explain why I decided to add these stocks. Look for an upcoming article that explains my thinking.

I finally closed my STAG Industrial (STAG) position for a net gain of 62% (38% annualized). STAG was the lowest ranked stock in DivGro and its dividend growth rate has been declining, so I decided to close my position while STAG is trading at a premium to fair value.

June's trades and dividend raises increased DivGro's projected annual dividend income (PADI) by $225 to $14,917, well above my 2017 goal of $14,400. With six months left in 2017, I'll be reevaluating my 2017 goals and make adjustments as necessary. Look for my upcoming quarterly review for details.

June Highlights

I like reviewing my monthly dividend income and changes that will affect future payments. Doing so helps me stay focused on the main goal of DivGro: to generate a growing dividend income stream.

In June, I collected dividend income from 31 stocks totaling $2,081. This amount is 56% higher than the dividend income I received in June last year. So far in 2017, I've collected a total of $8,603 in dividend income.

Projected annual dividend income (PADI) is the total dividend income I expect to receive in the next 12 months. I recorded 4 buys and 1 sell. Also, 3 stocks announced dividend increases. These activities added $225 to DivGro's PADI, which now stands at $14,917.

Following is a chart showing DivGro's projected monthly dividend income (red line) against monthly dividends received:

The following chart presents a rolling 12-month average of dividends received (the orange bars) plotted against a rolling 12-month average of DivGro's projected monthly dividend income, or PMDI (the blue staggered line):

Lining up dividend income by month is informative and shows year over year progress nicely:


Transactions

In June, I added shares to the following position:

• Cisco Systems Inc (CSCO) – added 200 shares, increasing my position to 300 shares

Also, I opened the following new positions in DivGro:

• Alphabet Inc (GOOG) – bought 5 shares of this non-dividend paying stock
• Amazon.com, Inc (AMZN) – bought 5 shares of this non-dividend paying stock
• Facebook (FB) – bought 30 shares of this non-dividend paying stock
• Netflix, Inc (NFLX) – bought 30 shares of this non-dividend paying stock
• NVIDIA Corporation (NVDA) – bought 10 shares; initial yield on cost is 0.37%
• Starbucks Corporation (SBUX) – bought 100 shares; initial yield on cost is 1.67%
• Hannon Armstrong Sustainable Infrastructure Capital, Inc (HASI) – bought 200 shares of this business development company; initial yield on cost is 5.71%

This month, I sold shares and reduced my position in the following stock:

• Target Corporation (TGT) – sold 40 shares, reducing my position to 300 shares

Lastly, I closed the following position:

• STAG Industrial, Inc (STAG) – sold 240 shares for a net gain of 62% (38% annualized) 

Dividend Changes

The following stocks announced dividend increases:

• UnitedHealth Group Inc (UNH) – increase of 20%
• Realty Income Corporation (O) – increase of 0.24%
• Target Corporation (TGT) – increase of 3.33%

Dividends Received

I received dividends from 31 different stocks this month, for a total of $2,081 in dividend income:

• AFLAC Inc. (AFL) – income of $21.50
• Cummins Inc (CMI) – income of $45.10
• Dominion Resources, Inc (D) – income of $75.50
• Eversource Energy (ES) – income of $28.50
• Ford Motor Company (F) – income of $150.00
• Gilead Sciences Inc (GILD) – income of $104.00
• International Business Machines (IBM) – income of $45.00
• Intel Corporation (INTC) – income of $92.65
• Nuveen Floating Rate Income Fund (JFR) – income of $33.75
• Johnson & Johnson (JNJ) – income of $45.36
• Lockheed Martin (LMT) – income of $25.48
• Main Street Capital Corp. (MAIN) – income of $207.00
• McDonald's Corp. (MCD) – income of $25.38
• 3M Company (MMM) – income of $18.80
• Microsoft Corp. (MSFT) – income of $54.60
• AGIC Equity&Convertible Income Fund (NIE) – income of $209.00
• Northrop Grumman (NOC) – income of $16.00
• Realty Income Corp. (O) – income of $10.55
• Pfizer Inc. (PFE) – income of $96.00
• Qualcomm Inc. (QCOM) – income of $228.00
• STAG Industrial, Inc (STAG) – income of $28.00
• Stanley Black & Decker (SWK) – income of $29.00
• Target Corp. (TGT) – income of $84.00
• T. Rowe Price Group (TROW) – income of $57.00
• Travelers Companies (TRV) – income of $20.88
• UnitedHealth Group Inc. (UNH) – income of $14.25
• Valero Energy Corporation (VLO) – income of $120.40
• Vanguard High Dividend Yield ETF (VYM) – income of $89.40
• Walgreens Boots Alliance, Inc (WBA) – income of $16.50
• Wal-Mart Stores Inc. (WMT) – income of $39.78
• ExxonMobil Corp. (XOM) – income of $50.05

Markets

It is worth looking at the markets to understand the environment we're investing in, even though I no longer compare DivGro's performance to those of the markets:

May 31, 2017	DOW: 21,008.65 S&P 500: 2,411.80 NASDAQ: 6,198.52 10-YR BOND: 2.21%
Jun 30, 2017	DOW: 21,287.03 S&P 500: 2,419.70 NASDAQ: 6,144.35 10-YR BOND: 2.27%

In June, the DOW gained 1.33% and the S&P 500 gained 0.33%, but the NASDAQ dropped 0.87%. Yield on the benchmark 10-year Treasury note rose to 2.27%.

Market Value

This month, DivGro's market value increased by 1.19% to $444,254. Compared with June 2016's market value of $319,411, the year over year increase is 39%.

	Market Value Cash Deposits Simple Return
Jun 30, 2016	$319,411.35 $273,702.27 16.70%
May 31, 2017	$439,017.07 $331,816.23 32.31%
Jun 30, 2017	$444,253.52 $333,442.12 33.23%

Given the current market value, my portfolio has delivered a simple return of 33.23% since inception. In comparison, DivGro's IRR (internal rate of return) is 14.39%. IRR takes into account the timing and size of deposits since inception, so it is a better measure of portfolio performance.

The following chart shows DivGro's market value breakdown. Dividends are plotted at the base of the chart so we can see them grow over time.



Portfolio

Here is a snapshot of DivGro's state on the last day of June 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 4.03% last month to 3.78% this month. The decrease is due to selling STAG and buying several non-dividend paying stocks.

Another interesting statistic is percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 9.41%, down from last month's 9.62%.

Finally, DivGro's projected annual yield is at 4.47%, up from last month's value of 4.43%. I calculate projected annual yield by dividing PADI ($14,917) by the total amount invested ($333,442).

Goals Review

I've set some challenging goals this year:

1. PADI: Increase projected annual dividend income to $14,400
2. Dividends: Earn $12,960 in dividend income
3. Dividends: Earn $8,400 in options income
4. Seeking: Write 64 premium articles for Seeking Alpha
5. DivNet: Write 6 articles for The DIVNet

Here is a set of gauges representing the progress I've made towards achieving these goals. The last gauge is a reference – it indicates where the other gauges should be after 181 out of 365 days:


I'm ahead of schedule with all my goals except for DivNet, which remains stuck at 0%! I'm hoping to get around to writing a few articles for The DivNet soon.

Looking Ahead

I'm looking forward to publishing guest posts on DivGro. Writers are invited to submit articles related to Dividend Growth and Value Investing, Financial Independence and Frugal Living, and Using Options to Boost Dividend Income. Please refer to my Guest Posts page for submission guidelines.

Please see my Performance page for various visuals summarizing DivGro's performance.

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