Monthly Review Of DivGro: June 2021

Every month, I review my portfolio of dividend growth stocks, DivGro. My goal is to share updates and provide a summary of the dividends I collected. I also monitor DivGro's projected annual dividend income (PADI) and its monthly counterpart, PMDI. 

In June, I added a position due to a spinoff and reduced my holdings in one position. Five DivGro stocks announced dividend increases in June. The net result of these changes is that PADI decreased by about 0.3% in June. Year over year, PADI increased by 10.3%.

As for dividend income, in June I received dividends totaling $5,308 from 47 stocks in my portfolio, a new record for monthly income! So far in 2021, I've collected $18,417 in dividends or about 53% of my 2021 goal of $34,500.

DivGro's PADI now stands at $33,899, which means I can expect to receive $2,825 in dividend income per month, on average, in perpetuity, assuming the status quo is maintained. Of course, I expect the companies I've invested in not only to continue to pay dividends but to increase them 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 collected dividends totaling $5,308 from 47 different stocks in June:

June's dividend income is a new record for DivGro, though the total includes the value of spinoff shares received from Merck & Co., Inc (MRK).

Here is a list of the dividends I collected in June:

• Archer-Daniels-Midland Company (ADM) — income of $74.00
• Aflac Incorporated (AFL) — income of $33.00
• Amgen Inc (AMGN) — income of $158.40
• Anthem, Inc (ANTM) — income of $11.30
• Atmos Energy Corporation (ATO) — income of $62.50
• Broadcom Inc (AVGO) — income of $108.00
• American States Water Company (AWR) — income of $28.48
• BlackRock, Inc (BLK) — income of $144.55
• Cummins Inc (CMI) — income of $67.50
• Chevron Corporation (CVX) — income of $134.00
• Digital Realty Trust, Inc (DLR) — income of $52.20
• Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO) — income of $142.50
• Eaton Vance Tax-Advantaged Dividend Income Fund (EVT) — income of $145.00
• Gilead Sciences, Inc (GILD) — income of $142.00
• The Home Depot, Inc (HD) — income of $99.00
• Honeywell International Inc (HON) — income of $65.10
• International Business Machines Corporation (IBM) — income of $164.00
• Intercontinental Exchange, Inc (ICE) — income of $33.00
• Intel Corporation (INTC) — income of $69.50
• Johnson & Johnson (JNJ) — income of $133.56
• Lockheed Martin Corporation (LMT) — income of $104.00
• Main Street Capital (MAIN) — income of $53.30
• McDonald's Corporation (MCD) — income of $64.50
• 3M Company (MMM) — income of $111.00
• Merck & Co., Inc (MRK) — spinoff shares valued at $1084.14
• Microsoft Corporation (MSFT) — income of $56.00
• NextEra Energy, Inc (NEE) — income of $38.50
• AllianzGI Equity & Convertible Income Fund (NIE) — income of $380.00
• Northrop Grumman Corporation (NOC) — income of $62.80
• Realty Income Corporation (O) — income of $35.25
• Public Service Enterprise Group Incorporated (PEG) — income of $51.00
• PepsiCo, Inc (PEP) — income of $150.50
• Pfizer Inc (PFE) — income of $117.00
• Pinnacle West Capital Corporation (PNW) — income of $166.00
• Public Storage (PSA) — income of $120.00
• QUALCOMM Incorporated (QCOM) — income of $47.60
• Raytheon Technologies Corporation (RTX) — income of $30.60
• Snap-on Incorporated (SNA) — income of $73.80
• The TJX Companies, Inc (TJX) — income of $52.00
• T Rowe PriceT. Rowe Price Group, Inc (TROW) — income of $216.00
• The Travelers Companies, Inc (TRV) — income of $88.00
• Tyson Foods, Inc (TSN) — income of $22.25
• UnitedHealth Group Incorporated (UNH) — income of $87.00
• Union Pacific Corporation (UNP) — income of $51.36
• United Parcel Service, Inc (UPS) — income of $51.00
• Visa Inc (V) — income of $28.80
• Valero Energy Corporation (VLO) — income of $98.00

The following chart shows DivGro's monthly dividends plotted against PMDI. Quarter-ending months are huge outliers:

To smooth things out a bit, I 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 great if dividends were distributed more evenly, I don't want to change my investment decisions based on the timing or frequency of dividend payments.

Dividend Changes

In June, the following stocks announced dividend increases:

• FedEx Corporation (FDX) — increase of 15.38%
• Realty Income Corporation (O) — increase of 0.21%
• Raytheon Technologies Corporation (RTX) — increase of 7.37%
• UnitedHealth Group Incorporated (UNH) — increase of 16.00%
• W. P. Carey Inc (WPC) — increase of 0.19%

As a result of these changes, DivGro's PADI will increase by $88.

I like seeing dividend increases above 7%, so three of the five increases top my expectations. The arithmetic average of this month's dividend increases is 7.8%, which easily beats inflation.

Transactions

Here is a summary of my transactions in June:

• Taiwan Semiconductor Manufacturing Company Limited (TSM) — sold 100 shares and reduced position to 100 shares

This transaction decreased DivGro's PADI by about $176 and follows the assignment of a covered call. I'm thinking about entirely closing my TSM position as a transition a little away from Cyclical to Defensive super sector stocks. 

Over the next few months, I'd like to continue rebalancing my portfolio based on my recently adopted factor-based target weights. This action should help to improve DivGro's super sector distribution, too, which still is significantly overweight in the Sensitive Sectors:

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
May 31, 2021	34,529.45	4,204.11	13,748.74	1.581	16.76
Jun 30, 2021	34,502.51	4,297.50	14,503.95	1.443	15.83

In June, the DOW 30 dropped 0.1%, the S&P 500 gained 2.2%, and the NASDAQ gained 5.5%. The yield on the benchmark 10-year Treasury note fell to 144.300%, while CBOE's measure of market volatility, the VIX decreased by 5.5%.

Here's a chart showing how the stocks and funds in DivGro performed over the past month:

In June, DivGro underperformed the S&P 500.

Portfolio Statistics

Given DivGro's current market value and the total capital invested, the portfolio has returned about 99% since inception. But calculating the IRR (internal rate of return) gives a better measure of portfolio performance, as IRR takes into account the timing and size of deposits since inception. DivGro's IRR is 16.8%.)

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 3.65% last month to 3.68% this month.

Percentage payback relates dividend income to the amount of capital invested. DivGro's average percentage payback is 20.4%, up from last month's 19.7%.

Finally, projected annual yield is calculated by dividing PADI ($33,899) by the total amount invested. DivGro's projected annual yield is at 4.96%, down from last month's value of 4.99%.

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 looking forward to the second half of 2021. I'm somewhat behind on my PADI goal, which is to increase DivGro's PADI to $37,500. On the other hand, I'm happy to note that DivGro's year to date dividend income is at 53% of my year-end goal of $34,500. We'll see how it goes over the next six months.

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

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Thanks for reading and take care, everybody!
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