Friday, September 8, 2017

Monthly Review: August 2017

Welcome to the August review of DivGro, my portfolio of dividend growth stocks! The goal of these monthly reviews is to share updates to my portfolio and to provide a summary of dividends collected.

DivGro's projected annual dividend income (PADI) increased to $15,353, which means I can expect to receive $1,279 in dividend income per month, on average, in perpetuity.

Of course, with a statement like that, I'm assuming that nothing will change! In actual fact, as a dividend growth investor, I expect the companies I've invested in to continue to pay and to increase dividends! Also, until I retire, I hope to continue to reinvest the dividends I collect... so DivGro's PADI should continue to grow through dividend growth and through compounding.

In August I received dividends totaling $923 from sixteen stocks in my portfolio, a year over year increase of 17%. So far in 2017, I've collected $10,258 in dividends or about 79% of my 2017 goal of $12,960.

August was another quiet month for trading activity. I added 200 shares to my existing position in Cisco Systems (CSCO) due to an option assignment. This buy increased my CSCO holding to 500 shares and DivGro's PADI by $232.

August was quite lean as far as dividend raises are concerned. Only two stocks in my portfolio announced dividend increases. Main Street Capital (MAIN) announced a modest increase of 2.7%, while Altria Group ((MO) increased its dividend by 8.2%. These increases translate to $42 in extra dividends every year.

August Highlights

The main goal of DivGro is to generate a growing dividend income stream. That's why I like to review my dividend income and any changes that would affect future payments.

In August, I collected dividend income from 16 stocks totaling $923. This amount is 17% higher than the dividend income I received in August last year. So far in 2017, I've collected a total of $10,258 in dividend income.

Projected annual dividend income (PADI) is the total dividend income I expect to receive in the next 12 months. DivGro's PADI increased by 1.82% to $15,353 due to stock trades and dividend changes. 2 stocks announced dividend increases and I recorded 1 buy.

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 August, I added 200 shares to CSCO, an existing position. I now own 500 CSCO shares.

Dividend Changes

The following stocks announced dividend increases:

• Altria Group (MO) – increase of 8.2%
• Main Street Capital (MAIN) – increase of 2.7%

Dividends Received

I received dividends from 16 different stocks this month, for a total of $923 in dividend income:

• Apple (AAPL) – income of $63.00
• AbbVie (ABBV) – income of $128.00
• CVS Health (CVS) – income of $20.00
• General Dynamics (GD) – income of $29.40
• Hormel Foods (HRL) – income of $17.00
• Nuveen Floating Rate Income Fund (JFR) – income of $33.75
• Main Street Capital (MAIN) – income of $83.25
• National Retail Properties (NNN) – income of $71.25
• Realty Income (O) – income of $10.58
• Omega Healthcare Investors (OHI) – income of $192.00
• Procter & Gamble (PG) – income of $68.96
• Raytheon (RTN) – income of $19.14
• Starbucks (SBUX) – income of $25.00
• AT&T Inc (T) – income of $82.81
• United Parcel Service (UPS) – income of $20.75
• Verizon Communications (VZ) – income of $57.75

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:

Jul 31, 2017
DOW: 21,891.12S&P 500: 2,470.30NASDAQ: 6,348.1210-YR BOND: 2.29%
Aug 31, 2017
DOW: 21,948.10S&P 500: 2,471.65NASDAQ: 6,428.6610-YR BOND: 2.12%

In August, the DOW gained 0.26%, the S&P 500 gained 0.05%, and the NASDAQ gained 1.27%. The yield on the benchmark 10-year Treasury note fell to 2.12%.

Below are charts showing the market activity of these indices in August, courtesy of Google Finance. (Click on the charts to see detail). Each chart shows a 20-period exponential moving average (in red).


Market Value

In August 2017, DivGro's market value increased by 1.65% to $462,259. Year over year, the market value increased by 39%.

Market ValueCash DepositsSimple Return
Aug 31, 2016
$331,373.20$278,284.2519.08%
Jul 31, 2017
$454,748.66$334,822.5535.82%
Aug 31, 2017
$462,258.98$336,213.1737.49%

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.


Given the current market value of $462,259, my portfolio has delivered a simple return of 37.49% since inception. In comparison, DivGro's IRR (internal rate of return) is 14.9%. (IRR takes into account the timing and size of deposits since inception, so it is a better measure of portfolio performance).

Portfolio

Here is a snapshot of DivGro's state on the last day of August 2017:


I track the yield on cost (YoC) for individual stocks, as well as an average YoC for my portfolio. DivGro's average YoC increased from 3.78% last month to 3.79% this month.

Another interesting statistic is percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 9.60%, up from last month's 9.52%.

Finally, DivGro's projected annual yield is at 4.57%, up from last month's value of 4.50%. I calculate projected annual yield by dividing PADI ($15,353) by the total amount invested ($336,213).

Goals Review

I've set some challenging goals for 2017:
  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 243 out of 365 days:


I'm ahead of schedule with all my goals except for DivNet, a goal that is increasingly unlikely to be achieved in 2017.

Looking Ahead

In July I started publishing guest posts on DivGro. After an initial surge in submissions, the rate has dropped off quite a bit. I'm hoping to publish one or two guest posts per month, so please visit my Guest Posts page and consider submitting an article! The page includes some ideas for articles in each of three possible categories: Dividend Growth and Value Investing, Financial Independence and Frugal Living, and Using Options to Boost Dividend Income. I hope to hear from you soon!

September is a quarter-ending month, which is great for dividends! I'm looking forward to another great month!

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

Thanks for reading and take care, everybody!

8 comments :

  1. Great work Ferdi. I love your "Dividend Income Per Month" chart showing the last 5 years of growth...my favorite - clearly showing your awesome progress! I can't wait to have 5 years of data to do something similar. Only in year 2 for me!

    ReplyDelete
    Replies
    1. Thanks, Passive Income Dude -- that chart is one of my favorites. Even with just 2 years of data, it is a useful chart, so I suggest you create one for your reports. All the best and just keep going... you'll be happy you did in a few years!

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  2. Love the comprehensive report, FerdiS. Looks like OHI and ABBV did some great dividend work for you in August. Nice price movement for ABBV this past week, too! Just an incredible portfolio... thanks for sharing.

    ReplyDelete
    Replies
    1. Thanks for your kind words, Engineering Dividends! As "mid-sized" positions, OHI and ABBV both produce solid dividends. ABBV has exploded in the past few weeks. I'm happy with that, but it seems to be moving a little fast...

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  3. Thanks. I had missed the news on MO raise. That is a tIRA holding for me. Also: gogogogogogogo!

    ReplyDelete
    Replies
    1. MO's raise is more than welcome -- for a stock yielding north of 4%, the 8% increase is great!. Thanks for your continued encouragement!

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  4. Excellent to see that monthly forward dividend increase over time. Looks fantastic.

    ReplyDelete
    Replies
    1. That's what dividend growth investing is all about... having compounding work in your favor! Thanks for your kind words and best of luck!

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