September Dividend Income: It Used To Be A Low-Growth Month. But Now +57% YoY!!!

The third quarter is in the books, folks. Time flies when you’re having fun. And while having fun, the compounding effect of investing and reinvesting our increasing dividends is getting bigger and bigger. That’s the real beauty of the dividend investing strategy. It will take care of itself, if and only if we select high-quality businesses. But how do we know whether a company is a high-quality business or not? Well, in 90% of the cases a 50-year streak of paying increasing dividends is a pretty good indicator to start with. It’s as simple as that. Let’s see how September worked out for me.

Income Numbers

The amount of dividend income for month 2019/09 was $153.28. In this month I got raises in dividend income from Bank of America (BAC), Cummins (CMI), Norfolk Southern (NSC), Realty Income (O), Stanley Black & Decker (SWK) and Union Pacific (UNP). That’s quite a list, don’t you think? I also got my first payment by Wells Fargo (WFC).

BAC paid me 30% more than three months ago. Wow! The payment by CMI was 15% higher in comparison with June this year. NSC gave me an extra 9.30% this month. O rewarded me with the traditional, but still very welcome small hike of 0.2%, whereas SWK increased their dividend with 4.5%. This month also included the second dividend raise by UNP, a nice 10.1% increase. A very good month, imho.

Breakdown of Dividend Income

My dividend income of $192.92 for this month was generated by:

Bank of America (BAC) – $7.02

BlackRock (BLK) – $13.20

Cummins (CMI) – $13.11

Emerson Electric (EMR) – $4.90

3M (MMM) – $37.44

Norfolk Southern (NSC) – $5.64

Realty Income (O) – $3.85

PepsiCo (PEP) – $8.60

Southern Company (SO) – $21.70

Stanley Black & Decker (SWK) – $8.28

Union Pacific (UNP) – $5.82

Wells Fargo (WFC) – $13.77

Exxon Mobil (XOM) – $49.59

Progress

My passive income for the month of June 2019 was $192.92. That means an increase of 26% QoQ; that’s pretty significant for my lowest month of every quarter. This month is now really getting somewhere. The progress YoY is even more meaningful; my dividend income for September last year was $122.98. So that’s an awesome increase of 57% YoY. ME LIKE! Let’s look at the graph YTD:

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Buys In September

During this month I bought 9 shares of Johnson & Johnson (JNJ) for a price of $128.22. You can read more about this purchase in my previous article. It still trades at an attractive valuation with a P/E of 15 and a dividend yield of 2.90%.

Dividend Income YTD 2019

Including this month I collected a nice $2,131.25 YTD. My total dividend income in 2018 was $1,793.09. It looks like I’m going to close the year with a FY dividend income just shy of $3,000. Too bad I won’t cross that mark. I really like passing those psychological meaningful round numbers. But that would still imply an increase in FY dividend income of 65% YoY. I could live with that. 😎

Thanks for stopping by and feel free to comment.

Happy investing!

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Yes, I Finally Bought This Dividend King 👊🤘🏾🥂

08365815-8F7B-4AAD-9AA4-C84019AF6725YES!!!

That’s how excited I felt when I bought shares of this fantastic business two weeks ago. It was somehow inevitable to buy shares of this dividend king and own it for a very, very long time. For three years I’ve watched the share price going up and down. But finally I laid my hands on this one. I’m talking about Johnson & Johnson (JNJ). The company with 135,000 employees who serve more than 1 billion patients each day.

I bought 9 stocks of Johnson & Johnson at a price of $128.22. At this price the stock yields 2.98%. They’re paying me $0.95 per quarter. So 9 shares equals a yearly $34.20. That’s certainly a nice yield and amount to begin with. It’s below my preferred step-in-yield of 4%, but J&J screams quality all over the place. So a lower yield is fine with me.

Their EPS (ttm) was $6.02 which means I bought the stock at a P/E (ttm) of 21.3 which seems on the high side. But J&J is also trading at approximately 15 times FY2019 earnings estimates of $8.60 per share. That’s more like a reasonable P/E.

They’ve increased their dividends for 57 in a row, which makes them a true dividend king. Another fun fact: JNJ has a streak of 35 consecutive years of adjusted operational earnings growth. Man, this is a high-quality business! In fact, the company is one of the only two companies with a AAA credit rating, the other one being Microsoft (MSFT). Their latest dividend raise was still a nice 5.6%. The 5-year yield on cost of JNJ sits around 3.85% according to GuruFocus.

The dividend payout ratio based on analysts consensus of earnings of $8.60 in 2019 and a ftm dividend of $3.80 comes down to 44%. This gives the company enough opportunities to continue increasing their dividends in the future. Over 20 years, they’ve managed to only increase their payout ratio about 10 percentage points. Talking about value creation and capital allocation! Many large and old corporations get inefficient along the way; they miss the boat, because they took things for granted for too long. But not with this giant: 25% of sales come from products launched in the past 5 years. That’s quite an achievement for such an established company.

GuruFocus states that the current return on capital (Joel Greenblatt) was 110.35%. This means the management of JNJ creates tremendous value for its shareholders. Their RoC is even ranked higher than 95% of the 1011 companies in the Drug Manufacturers industry. That is beyond comprehension, especially for such a large corporation. As a dividend growth investor I like dividend reliability and dividend growth. But, I also like to buy shares of better-than-average companies trading at below-average valuations. Buying JNJ at a forward P/E of 15, a RoC above 100% and a dividend yield of 3% means we’re into something good, folks.

In December 2018 the Board of Directors also announced they had authorized the repurchase of up to $5 billion of the company’s common stock.

I’m very excited about this purchase. It’s a new position for me and I will be watching the stock price closely to buy even more shares. The earnings streams are durable, reliable and stable because of their business diversification. Just like you want with a recession coming our way. J&J has been around for more than 130 years, so they weathered a countless number of economic and market cycles. I’m confident they will also ride this one brilliantly.

What did you buy lately and have you considered buying shares of JNJ?

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Still Going Strong: A 58% YoY Growth In Dividends For August

Everything is back to normal over here; the summer vacation is over, our kids are back to school and the usual wet and windy weather has returned. Time has flown by. Meanwhile, the dividends haven’t stopped from rolling in ☺️. August was a month of several big price drops which gave us as long term investors some pretty good opportunities to buy good companies at reasonable prices. Fortunately, I had some cash at hand to take advantage of these price swings. Here’s my score of the month of August.

Income numbers

For this month my total amount of dividend income was $331.12. This is the highest amount of monthly dividend income so far and it’s also my first month above the $300 threshold. Hallelujah! This is so inspiring.

Three companies paid me more than last quarter as a consequence of a raise or larger position. The dividend payment I received from Abbvie (ABBV) has increased from $18.19 in May to a nice $56.71 in August. Realty Income (O) paid me $3.85, just a penny more than in May. Delta Air Lines (DAL) increased its quarterly dividend with 15.00% which resulted in a dividend of $9.26 for this month. Here’s the breakdown:

Apple (AAPL) – $16.94

Abbvie (ABBV) – $56.71

CVS Caremark (CVS) – $17.00

Delta Air Lines (DAL) – $9.26

Realty Income (O) – $3.85

Omega Healthcare (OHI) – $66.00

Starbucks (SBUX) – $16.92

Tanger Factory Outlets (SKT) – $51.83

AT&T (T) – $85.68

Texas Instruments (TXN) – $6.93

This makes the total amount of dividend income for this month a nice $331.12. My dividend income in May 2019 was $291.38 so that’s an increase of 14% QoQ. My passive income for August 2018 was $209.12, so that’s a very welcome 58% YoY growth. This means another high double-digit growth number, I love it! Here is the graph that shows all monthly dividends YTD as compared to last year:

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Transactions during August

I added to three positions at lower prices than my average buy price, locking a higher dividend yield than I already had. This leads to a higher yield on cost. I bought 7 stocks of Abbvie (ABBV), 3 stocks of 3M (MMM) and 10 stocks of Altria (MO). The details are as follows:

F9CE049A-441D-4EE0-9384-541EB5BC6F71I now own 60 stocks of Abbvie (ABBV), 29 shares of 3M (MMM) and 97 pieces of Altria (MO). That’s getting serious.

Looking Forward

I earned $1,938.34 in dividend income YTD, which means I surpassed the FY 2018 dividend income of $1,793.09.

Some companies in my portfolio are still trading for low or reasonable valuations. at the moment. In addition to the three bunsiness above, I can think of CVS Caremark (CVS), AT&T (T), Exxon Mobil (XOM) and Wells Fargo (WFC). I’ve also had my eyes on Bank of Montreal (BMO), Johnson & Johnson (JNJ), Simon Property Group (SPG) and the Toronto-Dominion Bank (TD).

Altria (MO) and Philip Morris (PM) confirmed their talks about a potential all-stock “merger of equals.” A combined company could be worth more than $200 billion. I’m curious how this one will play out.

Did you buy a number of companies during the price swings in August? Please let me know.

Thanks for for your time.

Happy investing!

A Hot 66% Increase In Dividend for July 2019

For me, the first month of every quarter is a month with strong growth rates YoY. I’m very curious how things evolved in July. Let’s find out.

The Numbers

My dividend income for July was $275.02. In this month I got two raises as compared to the dividend payment three months ago. This month included the usual small dividend increase from Realty Income (O), but also the 5.3% raise from Leggett & Platt (LEG). July was also the first month in which I got a payment from the REIT Iron Mountain (IRM), $11.00 to be exactly. Also Walt Disney (DIS) contributed a semiannual, but welcome $4.40. This sums up to:

Bank of Nova Scotia (BNS) – $29.73

Walt Disney (DIS) – $4.40

Iron Mountain (IRM) – $11.00

Illinois Tool Works (ITW) – $6.00

JP Morgan (JPM) – $4.80

Kimco Realty (KIM) – $70.00

Leggett & Platt (LEG) – $8.40

Altria (MO) – $69.60

Realty Income (O) – $3.85

Philip Morris (PM) – $30.78

Ventas (VTR) – $36.46

This makes the total amount of dividend income for this month a nice $275.02. My dividend income for April 2019 was $258.53 so that’s an increase of a very small 6% QoQ. My passive income for the month of July in 2018 was $165.45 so that’s an increase of 66% YoY. That’s quite a growth rate! Here is the graph YTD:

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Transactions during July

This month I bought 27 stocks of Wells Fargo (WFC) for a price of $48.45. I owned this stock before, but sold it because of the low prospects of shareholder returns after the infamous scandal. But after the last stress test of the Fed, things have changed as we can lock in a 4.25% dividend yield right now and a buy back up to $23.1B of stock. I would love to double this position if the price drops to the $42-43 range.

Looking Forward

We’re on our way to crush the number of $300. I would love to start 2020 with $300 as a new baseline. Stock prices are climbing again after the recent drop in August. My total dividend income YTD is $1,607.22, already close to the number of FY 2018 $1,793.09.

Please let me know which stocks you bought and whether July was a good month in terms of dividend income numbers. Thanks for reading.

Happy investing!

June – A Month Of Increasing Growth Numbers

The first six months of 2019 are already behind us. This gives me a nice opportunity to stand still for a moment and consider the progress made so far in 2019. Some things come to my mind:

1. A broader diversification in business sectors / industries as I put more money in the healthcare sector: Abbvie (ABBV) and CVS Caremark (CVS). In 2019, I would love to add Johnson & Johnson (JNJ) to these two names.

2. Averaging down on several existing positions thereby increasing my yield on cost and lowering my average buy price for 3M (MMM), Abbvie (ABBV), Altria (MO), CVS Caremark (CVS) and Philip Morris (PM).

Not bad, it seems. I still have some work to do to balance my portfolio. Fortunately, opportunities will continue to come by in and beyond 2019. Think of market uncertainties regarding a trade deal between USA and China, a looming Brexit in October and continued talks about the chances of an economic recession in 2020. These uncertainties will lead to enough opportunities to buy wonderful stocks at low or reasonable valuations. But for now, let’s see how June turned out to be.

Income Numbers

The amount of dividend income for month 2019/06 was $153.28. In this month I got raises in dividend income from Realty Income (O), PepsiCo (PEP), Southern Company (SO) and Exxon Mobil (XOM) as compared to the dividend payment three months ago.

O paid me a penny more than three months ago; slowly,  but surely. The payment by PEP was a small, but nice 3% higher in comparison with March. SO rewarded me with a 3.3% quarterly dividend hike. This month also included a higher dividend payment by XOM, a nice 6.1% increase.

My dividend income of $153.28 for this month was generated by:

Bank of America (BAC) – $5.85

BlackRock (BLK) – $13.20

Cummins (CMI) – $11.40

Emerson Electric (EMR) – $4.90

3M (MMM) – $15.84

Norfolk Southern (NSC) – $5.16

Realty Income (O) – $3.84

PepsiCo (PEP) – $8.60

Southern Company (SO) – $21.70

Stanley Black & Decker (SWK) – $7.92

Union Pacific (UNP) – $5.28

Exxon Mobil (XOM) – $49.59

Breakdown of Dividend Income

My passive income for the month of March 2019 was $141.68. That means an increase of 8% QoQ; not that great, but at least my income for my lagging third month of a quarter is rising. The progress YoY is more meaningful; my dividend income for June last year was $127.27. So that’s an increase of 20% YoY. I love double digits! This comes down to the next graph:

C48F9653-25FD-4BD8-B9D9-4CFFA6FE9576.jpeg

Buys In June

During this month I bought me two chunks of Abbvie (ABBV): 8 stocks for a price of $75.90 and 16 shares for the trading price of $67.25. I also initiated a position in a new REIT: Iron Mountain (IRM). This one has been on my radar for a while. I finally bought 18 stocks for $31.40. In total these three buys added $146.64 to my dividend income on a yearly basis.

Dividend Income YTD 2019

Including this month I collected a nice $1,332.20 YTD. My total dividend income in 2018 was $1,793.09. It looks like I’m going to hit a FY dividend income of $3,000. Sweet!

Come What May… A 90% Increase & A Record High 🥂

The month of May. Well, it wasn’t exactly the month of Theresa May. To say the least… But May was certainly a good month for me. Last month I wrote that a monthly dividend income higher than $200 seemed to be the new normal. In fact, I hope to touch the amount of $300 any time soon. That would be a huge milestone for me; just steamrolling forward 💪

Income numbers

For this month my total amount of dividend income was $291.38. As I wrote a record high and the fourth month in 2019 above the $200 threshold. Crossing the $300 barrier is well within reach, hopefully in August. I already notice the snowball effect taking place; every month I have more money to invest, because of the increasing number of stocks and higher dividend amounts per share.

Three companies paid me more than last quarter as a consequence of a raise. Apple (AAPL) increased its quarterly dividend from $0.73/share to $0.77/share, representing a 5.5% annual dividend increase. May included the first payment of $0.77/share. Good ol’ Realty Income (O) paid me $3.84, just a penny more than in February. Tanger Factory Outlets (SKT) paid me $0.355/share, which comes down to a 1.4% increase from prior dividend of $0.35. Delta Airlines (DAL) switched their month of pay date so that’s a bit of a cheat. They paid me $8.05 for this quarter.

The only business paying me more than a quarter ago because of a bigger position was CVS Caremark (CVS) which paid $17.00 (instead of $6.00). Here’s the breakdown:

Apple (AAPL) – $16.94

Abbvie (ABBV) – $18.19

CVS Caremark (CVS) – $17.00

Delta Airlines (DAL) – $8.05

Realty Income (O) – $3.84

Omega Healthcare (OHI) – $66.00

Starbucks (SBUX) – $16.92

Tanger Factory Outlets (SKT) – $51.83

AT&T (T) – $85.68

Texas Instruments (TXN) – $6.93

This makes the total amount of dividend income for this month a nice $291.38. My dividend income in February 2019 was $270.71 so that’s a small increase of 8% QoQ. My passive income for May 2018 was $153.68 so that’s an increase of 90% YoY. This means another high double-digit growth number, I love it! Here is the graph that shows all monthly dividends YTD as compared to last year:

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Transactions during May

I bought 22 stocks of 3M (MMM) in only two weeks. I like this company very much; they have a streak of 61 years increasing their dividends. Including this transaction I now own 26 stocks for an average price of $172.44. My first stocks were bought at a price slightly above $192. I added to my small position in four different chunks:

9F141247-4E21-4C3A-8D08-892667F1DFA4Looking Forward

This is my fourth month with a dividend income above $200. And I’m already on my way to realize the target of getting my first dividend income of $300+ in 2019.

My stake in the tobacco industry has come under pressure again after Nielsen tracking data indicated that cigarette industry volume fell 11.2% in the 4-week period ending on May 18 to mark a deceleration from the -9.5% 12-week pace, according to Wells Fargo. Not a good sign, but I’m sure MO and PM will prosper eventually. MO looks very attractive again at these price levels.

I earned $1,178.93 in dividend income YTD. That’s a big number, imho. I collected this income number three months earlier than in 2018.

Please let me know which stocks you bought. Did you buy 3M (MMM)? Was May a good month in terms of dividend income numbers?

Thanks for reading.

March 2019 – A Growing Dividend Income, Again 👊

This post is already about the last month of the first quarter of 2019. January and February are in the books, both with a dividend income above the $200 and double-digit growth numbers. Each month the numbers are getting bigger and bigger. This is great and it really feels like I’m getting closer and closer to my goal of financial independence. Let’s find out if the last month of this quarter was also a month of a record high number!

Income Numbers

The amount of dividend income for month 2019/03 was $141.68. In this month I got three raises in dividend income from BlackRock (BLK), Norfolk Southern (NSC) and Union Pacific (UNP) as compared to the dividend payment three months ago. This was the second raise in one year for all three companies. What a fantastic businesses!

BlackRock (BLK) continued its streak of rising dividend payouts and rewarded its investors with a 5.4% quarterly dividend hike. The low payout ratio of 35% indicates that the current dividend is well-covered by the company’s earnings. BlackRock’s current dividend payout ratio is also lower than the company’s 40% average ratio over the past five years. Very nice! Norfolk Southern (NSC) announced in January that its board of directors approved an 8% increase in its quarterly dividend, from 80 to 86 cents per share. Their payout ratio sits around a low 34%. Union Pacific increased their dividend from $0.80 to $0.88 a share, a nice 10% increase. This comes down to a very conservative payout ratio of 40%. Union Pacific (UNP) recorded their ninth consecutive year of dividend increases.

This month also included a higher dividend payment by BlackRrock (BLK) and Exxon Mobil (XOM), because of my bigger stake in these companies. I really like to increase my positions in these companies. My dividend income for the month of March was generated by:

Bank of America (BAC) – $5.85

BlackRock (BLK) – $13.20

Cummins (CMI) – $11.40

Emerson Electric (EMR) – $4.90

Norfolk Southern (NSC) – $5.16

Realty Income (O) – $3.83

PepsiCo – $8.35

Southern Company (SO) – $21.00

Stanley Black & Decker (SWK) – $7.92

Union Pacific (UNP) – $5.28

Exxon Mobil (XOM) – $46.74

Breakdown of Dividend Income YoY

My passive income in the month of March last year was $130.14 so that’s an increase of 9% YoY. That’s on the low side for me. Especially after the YoY growth numbers of January and February. The progress QoQ was a bit lower, just 7%. The dividend income for March 2019 leads to the next graph:

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Buys In March

During this month I added 10 stocks to my position in CVS Caremark (CVS) for a price of  $55.39. This additional buy brought down my average buy price. It’s now slightly above $61 and the yield on cost from this position has gone up to 3.27%.

I also initiated a position in JP Morgan Chase (JPM). This one has been on my radar since 2016. It was trading in the $55 – 60 range back then, but I wanted it get down to the low $50’s. Well, now I finally bought 6 stocks for $103.81. ☺️ I stepped in at a dividend yield of 2.80%. When it gets below the $100, I’m on it. I want this to be a meaningful position.

Dividend Income YTD 2019

Including the month of March I collected a nice $629.02 YTD. My total dividend income in 2018 was $1,793.09. It sure looks like I’m going to crush this number. What a feeling 👍