Tuesday, March 13, 2018

Monthly Review: February 2018

Welcome to the February review of DivGro, my portfolio of dividend growth stocks. I present details of any buys or sells, and I provide a summary of dividends collected. Additionally, I look at how the month's activities have impacted DivGro's projected annual dividend income (PADI).

In February, I opened two new positions and added shares to five existing positions. Nine DivGro stocks announced dividend increases in February. The net result of these changes is that PADI increased by about 6.7% in February. Year over year, PADI increased by 40.1%.

As for dividend income, in February I received dividends totaling $1,127 from 16 stocks in my portfolio, a year over year decrease of 23%. So far in 2018, I've collected $2,055 in dividends or about 11% of my 2018 goal of $18,000.

Assuming the status quo and given DivGro's PADI of $17,838, I can expect to receive $1,487 in dividend income per month, on average, in perpetuity. Of course, most of the stocks I own are dividend growers, so I expect my dividend income to increase over time! Furthermore, I plan to reinvest dividends until I retire, so DivGro's PADI should continue to grow through dividend growth and through compounding.

Dividend Income


I collected dividends totaling $1,127 from 16 different stocks in February:
Here is a list of the dividends I received in February:
  • Apple (AAPL)income of $63.00
  • AbbVie (ABBV)income of $142.00
  • CVS Health (CVS)income of $50.00
  • General Dynamics (GD)income of $29.40
  • Hormel Foods (HRL)income of $18.75
  • Nuveen Floating Rate Income Fund (JFR)income of $33.75
  • Main Street Capital (MAIN)income of $85.50
  • National Retail Properties (NNN)income of $71.25
  • Realty Income (O)income of $10.95
  • Omega Healthcare Investors (OHI)income of $330.00
  • Procter & Gamble Company (The) (PG)income of $68.96
  • Raytheon (RTN)income of $19.14
  • Starbucks (SBUX)income of $30.00
  • AT&T (T)income of $84.50
  • Texas Instruments (TXN)income of $31.00
  • Verizon Communications (VZ)income of $59.00
The chart below shows DivGro's monthly dividends plotted against PMDI. Clearly, quarter-ending months are huge outliers:
For this reason 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 I would prefer receiving more evenly distributed dividends, I wouldn't let that influence my investment decisions.

Dividend Changes


In February, the following stocks announced dividend increases:
  • AbbVie (ABBV)increase of 35.21%
  • Cisco Systems (CSCO)increase of 13.79%
  • Eversource Energy (ES)increase of 6.32%
  • Gilead Sciences (GILD)increase of 9.62%
  • Coca-Cola Company (The) (KO)increase of 5.41%
  • T. Rowe Price (TROW)increase of 22.81%
  • United Parcel Service (UPS)increase of 9.64%
  • Wal-Mart Stores (WMT)increase of 1.96%
  • Xcel Energy (XEL)increase of 5.56%
These changes will increase DivGro's PADI by $362.

I like seeing dividend increases above 7%, so I'm pleased to see that five of the nine increases top my expectations. ABBV's 35% increase is spectacular and TROW is not far behind with its increase of nearly 23%. CSCO rounds out the double-digit percentage increases with its increase of about 14%.

Transactions


Here is a summary of my transactions in February:
  • Quest Diagnostics (DGX)new position of 25 shares
  • Xilinx (XLNX)new position of 35 shares
  • Hannon Armstrong Sustainable Infrastructure Capital (HASI)added 350 shares and increased position to 550 shares
  • Realty Income (O)added 25 shares and increased position to 75 shares
  • AT&T (T)added 31 shares and increased position to 200 shares
  • United Parcel Service (UPS)added 10 shares and increased position to 35 shares
  • Walgreens Boots Alliance (WBA)added 20 shares and increased position to 100 shares
These transactions increased DivGro's PADI by about $757.

Markets


Here is a summary of various market indicators, showing the changes over the last month:

DOW
30
S&P
500
NASDAQ
Composite
10-YR
BOND
CBOE
VIX
Jan 31, 201824,272.352,647.586,873.972.417%13.54
Feb 28, 201825,029.202,720.947,273.012.868%19.85

In February, the DOW 30 gained 3.1%, the S&P 500 gained 2.8%, and the NASDAQ gained 5.8%. The yield on the benchmark 10-year Treasury note rose to 2.868%, while CBOE's measure of market volatility, the VIX, increased by 46.6%.

Portfolio Statistics


Based on the total capital invested and the portfolio's current market value, DivGro has delivered a simple return of about 51% since inception. In comparison, DivGro's IRR (internal rate of return) is 16.5%. (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 4.07% last month to 4.18% this month.

Percentage payback relates dividend income to the amount of capital invested. DivGro's average percentage payback is 13.2%, up from last month's 12.9%.

Finally, DivGro's projected annual yield is at 4.99%, up from last month's value of 4.69%. I calculate projected annual yield by dividing PADI ($17,838) 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


I'm happy with DivGro's performance given the increased volatility in the markets. So far this year, five of my holdings achieved home run status (stocks with total returns exceeding 100%) and two more are on the verge of doing the same!

I'm very busy at work as we're in crunch time on Incredibles 2, so I'm not getting much time to research and analyse stocks. Hopefully, things will quiet down some time in April.

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

Thanks for reading and take care, everybody!

2 comments :

  1. That looks like a great month to me. You received some nice dividend income during this off month. You also added some fresh capital into some good companies. That is quite a nice income stream that your building. Thanks for sharing!

    ReplyDelete
    Replies
    1. Thanks for visiting and commenting, More Dividends! Good to hear from you!

      Yes, February was a good month and I'm quite pleased that I collected more than $1k in an "off" month. March is a quarter-ending month and I'm excited to see if I can set a new record for dividend income. We'll see how it goes.

      All the best
      FerdiS

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