Monday, January 1, 2018

Monthly Review: December 2017

Welcome to the last monthly review in 2017 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. I also consider the impact on DivGro's projected annual dividend income (PADI).

Quarter-ending months are exceptional months for dividend growth investors, as many companies tend to pay dividends in these months. In December, I received dividends totaling $2,245.05 from 31 stocks in my portfolio. Incredibly, this is just 51¢ more than my previous record total of $2,244.54.

So I'm happy to report that December was another record month for DivGro!
I've collected $14,823 in dividends in 2017 or about 114% of my 2017 goal of $12,960.


DivGro's PADI now stands at $15,914, which means I can expect to receive $1,326 in dividend income per month, on average, in perpetuity, assuming the status quo is maintained. Of course, I expect the companies I'm invested in to increase their dividends over time! Also, until I retire, I hope to continue reinvesting dividends, so DivGro's PADI should continue to grow through dividend growth and through compounding.


Dividend Income


I received dividends from 31 different stocks, for a monthly total of $2,245 in dividend income:


Here is a list of the dividends I received in December:

  • Aflac (AFL) — income of $22.50
  • Cummins (CMI) — income of $47.52
  • Dominion Energy (D) — income of $77.00
  • Eversource Energy (ES) — income of $28.50
  • Ford Motor (F) — income of $300.00
  • Gilead Sciences (GILD) — income of $104.00
  • International Business Machines (IBM) — income of $45.00
  • Intel (INTC) — income of $155.33
  • Nuveen Floating Rate Income Fund (JFR) — income of $67.50
  • Johnson & Johnson (JNJ) — income of $45.36
  • Coca-Cola (KO) — income of $74.00
  • Lockheed Martin (LMT) — income of $28.00
  • Main Street Capital (MAIN) — income of $209.25
  • McDonald's (MCD) — income of $27.27
  • 3M (MMM) — income of $18.80
  • Microsoft (MSFT) — income of $58.80
  • Northrop Grumman (NOC) — income of $16.00
  • NVIDIA (NVDA) — income of $3.00
  • Realty Income (O) — income of $10.60
  • QUALCOMM (QCOM) — income of $228.00
  • Starbucks (SBUX) — income of $30.00
  • Schwab US Dividend Equity ETF (SCHD) — income of $34.48
  • Stanley Black & Decker (SWK) — income of $31.50
  • Target (TGT) — income of $186.00
  • T. Rowe Price (TROW) — income of $57.00
  • Travelers Companies (TRV) — income of $20.88
  • UnitedHealth (UNH) — income of $14.25
  • Valero Energy (VLO) — income of $126.00
  • Vanguard High Dividend Yield ETF (VYM) — income of $96.46
  • Walgreens Boots Alliance (WBA) — income of $32.00
  • Exxon Mobil (XOM) — income of $50.05
Following is a chart showing DivGro's monthly dividends plotted against PMDI. Quarter-ending months are huge outliers:


This is one reason that I now create a rolling 12-month average of dividends received (the orange bars) plotted against a rolling 12-month average of PMDI (the blue, staggered line):

While it would be nicer if dividends are distributed more evenly, it is not something that would drive my investment decisions.

Dividend Changes


In December, the following stocks announced dividend increases:

  • Realty Income (O) — increase of 0.24%
  • Schwab US Dividend Equity ETF (SCHD) — increase of 0.26%
  • AT&T (T) — increase of 2.04%
  • Vanguard High Dividend Yield ETF (VYM) — increase of 6.83%

As a result of these changes, DivGro's PADI will increase by $32.

Transactions


In December I executed no buy or sell transactions, choosing instead to build my cash reserves.

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:

DOW
S&P 500
NASDAQ
10-YR BOND
30 Nov 2017
24,272.35
2,647.58
6,873.97
2.417%
31 Dec 2017
24,719.22
2,673.61
6,903.39
2.405%

In December, the DOW gained 1.84%, the S&P 500 gained 0.98%, and the NASDAQ gained 0.43%. The yield on the benchmark 10-year Treasury note fell to 2.405%.

Portfolio Statistics


Based on the total capital invested and the portfolio's current market value, DivGro has delivered a simple return of about 50% since inception. In comparison, DivGro's IRR (internal rate of return) is 17.4%. (IRR takes into account the timing and size of deposits since inception, so it is a better measure of portfolio performance).

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 3.97% last month to 3.98% this month.

Another interesting statistic is percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 11.27%, up from last month's 10.72%.

Finally, DivGro's projected annual yield is at 4.49%, down from last month's value of 4.50%. I calculate projected annual yield by dividing PADI ($15,914) by the total amount invested.

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:


Looking Ahead


This month I'm celebrating DivGro's 5-year anniversary! Although I wrote my first article on 10 January 2013 and bought my first stock on 8 January 2013, I consider 1 January 2013 to be the day I founded DivGro.

I've set tough goals for 2018, and I'm looking forward to the challenge!

Soon I'll publish my 20th quarterly review and 5th annual review of DivGro.

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

Thanks for reading and I wish you all a HAPPY and PROSPEROUS new year! Take care, everybody!

16 comments :

  1. Thats huge div. Congrats on a fantastic year and hitting all your goals. Keep it up. Look forward to seeing what 2018 brings for you.

    ReplyDelete
    Replies
    1. Thanks, Passivecanadian! I'm very happy with DivGro's performance so far and look forward to the challenges that 2018 will bring. Take care and happy investing!

      Delete
  2. Thats some amazing results. I'm glad to see you surpassing your dividend income goal for the year. You have alot of heavy hitters working for you. Great job and I look forward to reading your quarterly review. Thanks for sharing.

    ReplyDelete
    Replies
    1. Thanks, More Dividends! I'm very happy that I achieved (most of) my 2017 goals, especially the dividend income goal. Now onto 2018, and with a 38% increase in my dividend income goal, it will be a challenging yet exciting journey. Take care and happy investing (and happy new year!)

      Delete
  3. Wow. Have a great 2018. Happy New year.

    ReplyDelete
    Replies
    1. Thanks so much, sgx nifty! Happy New Year to you, too!

      Delete
  4. Nice to see the steady dividend growth. Here's to a great 2018!

    Troy

    ReplyDelete
    Replies
    1. Thanks for commenting, Troy! I enjoy creating and looking at the dividend growth charts, 'cause those inspire me to continue. All the best for 2018!

      Delete
  5. Absolutely fantastic year for you in 2017. You've done really well. I am jealous of some of those numbers!

    ReplyDelete
    Replies
    1. Thanks, Buy, Hold Long -- I appreciate your comment! Hopefully, the numbers you're looking at would inspire you to continue on the path as a dividend growth investor. I started 5 years ago from essentially zero (though I was a hobbyist trader before). Best of luck!

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  6. Great job, Divgro. That growth is incredible. I can't wait until my portfolio grows to the size yours is at.

    ReplyDelete
    Replies
    1. Hi, Dividend Reaper -- I appreciate your comment. Please just stay on the DGI path. I started this journey 5 years ago and it has topped my wildest expectations. All the best!

      Delete
  7. Hey good job on accomplishing most of your goals. Keep up the good work and looking forward to see your portfolio grow.

    ReplyDelete
    Replies
    1. Hi, Jay -- thanks for visiting and commenting. When I started, I committed for 10 years, so I'm half-way now. (I'll probably go on after 10 years...) I'm looking forward to seeing where the portfolio will go after 5 more years!

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  8. Nice work. You had a great year it looks like all around. Hit most of your goals and had nice growth numbers. Lots of companies paying you in December. That is what I like to see. Keep up the good work!

    ReplyDelete
    Replies
    1. Thanks for your kind words, Dividend Daze -- I'm looking at some challenging goals for 2018, so, hopefully, I'll achieve those in 2018. About December dividends -- I just love quarter-ending months. I usually make new records for monthly income in those months.

      Take care and happy investing in 2018!

      Delete

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