Monday, July 3, 2017

Monthly Review: June 2017

Welcome to my monthly review of DivGro, my portfolio of dividend growth stocks!

I love quarter-ending months, as most companies pay dividends in these months. And June certainly did not disappoint, as I set another record for dividend income received in a single month! In fact, this is the first time I've collected more than $2,000 in a single month! No fewer than 31 of my positions paid dividends in June.

As for trading activity, June was a busy month. I opened several new positions and added shares to an existing position. Noteworthy is that I've added four non-dividend paying stocks to DivGro! I have yet to report on these trades and explain why I decided to add these stocks. Look for an upcoming article that explains my thinking.

I finally closed my STAG Industrial (STAG) position for a net gain of 62% (38% annualized). STAG was the lowest ranked stock in DivGro and its dividend growth rate has been declining, so I decided to close my position while STAG is trading at a premium to fair value.

June's trades and dividend raises increased DivGro's projected annual dividend income (PADI) by $225 to $14,917, well above my 2017 goal of $14,400. With six months left in 2017, I'll be reevaluating my 2017 goals and make adjustments as necessary. Look for my upcoming quarterly review for details.

June Highlights

I like reviewing my monthly dividend income and changes that will affect future payments. Doing so helps me stay focused on the main goal of DivGro: to generate a growing dividend income stream.

In June, I collected dividend income from 31 stocks totaling $2,081. This amount is 56% higher than the dividend income I received in June last year. So far in 2017, I've collected a total of $8,603 in dividend income.

Projected annual dividend income (PADI) is the total dividend income I expect to receive in the next 12 months. I recorded 4 buys and 1 sell. Also, 3 stocks announced dividend increases. These activities added $225 to DivGro's PADI, which now stands at $14,917.

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 June, I added shares to the following position:

• Cisco Systems Inc (CSCO) – added 200 shares, increasing my position to 300 shares

Also, I opened the following new positions in DivGro:

• Alphabet Inc (GOOG) – bought 5 shares of this non-dividend paying stock
• Amazon.com, Inc (AMZN) – bought 5 shares of this non-dividend paying stock
• Facebook (FB) – bought 30 shares of this non-dividend paying stock
• Netflix, Inc (NFLX) – bought 30 shares of this non-dividend paying stock
• NVIDIA Corporation (NVDA) – bought 10 shares; initial yield on cost is 0.37%
• Starbucks Corporation (SBUX) – bought 100 shares; initial yield on cost is 1.67%
• Hannon Armstrong Sustainable Infrastructure Capital, Inc (HASI) – bought 200 shares of this business development company; initial yield on cost is 5.71%

This month, I sold shares and reduced my position in the following stock:

• Target Corporation (TGT) – sold 40 shares, reducing my position to 300 shares

Lastly, I closed the following position:

• STAG Industrial, Inc (STAG) – sold 240 shares for a net gain of 62% (38% annualized) 

Dividend Changes

The following stocks announced dividend increases:

• UnitedHealth Group Inc (UNH) – increase of 20%
• Realty Income Corporation (O) – increase of 0.24%
• Target Corporation (TGT) – increase of 3.33%

Dividends Received

I received dividends from 31 different stocks this month, for a total of $2,081 in dividend income:

• AFLAC Inc. (AFL) – income of $21.50
• Cummins Inc (CMI) – income of $45.10
• Dominion Resources, Inc (D) – income of $75.50
• Eversource Energy (ES) – income of $28.50
• Ford Motor Company (F) – income of $150.00
• Gilead Sciences Inc (GILD) – income of $104.00
• International Business Machines (IBM) – income of $45.00
• Intel Corporation (INTC) – income of $92.65
• Nuveen Floating Rate Income Fund (JFR) – income of $33.75
• Johnson & Johnson (JNJ) – income of $45.36
• Lockheed Martin (LMT) – income of $25.48
• Main Street Capital Corp. (MAIN) – income of $207.00
• McDonald's Corp. (MCD) – income of $25.38
• 3M Company (MMM) – income of $18.80
• Microsoft Corp. (MSFT) – income of $54.60
• AGIC Equity&Convertible Income Fund (NIE) – income of $209.00
• Northrop Grumman (NOC) – income of $16.00
• Realty Income Corp. (O) – income of $10.55
• Pfizer Inc. (PFE) – income of $96.00
• Qualcomm Inc. (QCOM) – income of $228.00
• STAG Industrial, Inc (STAG) – income of $28.00
• Stanley Black & Decker (SWK) – income of $29.00
• Target Corp. (TGT) – income of $84.00
• T. Rowe Price Group (TROW) – income of $57.00
• Travelers Companies (TRV) – income of $20.88
• UnitedHealth Group Inc. (UNH) – income of $14.25
• Valero Energy Corporation (VLO) – income of $120.40
• Vanguard High Dividend Yield ETF (VYM) – income of $89.40
• Walgreens Boots Alliance, Inc (WBA) – income of $16.50
• Wal-Mart Stores Inc. (WMT) – income of $39.78
• ExxonMobil Corp. (XOM) – income of $50.05

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:

May 31, 2017
DOW: 21,008.65S&P 500: 2,411.80NASDAQ: 6,198.5210-YR BOND: 2.21%
Jun 30, 2017
DOW: 21,287.03S&P 500: 2,419.70NASDAQ: 6,144.3510-YR BOND: 2.27%

In June, the DOW gained 1.33% and the S&P 500 gained 0.33%, but the NASDAQ dropped 0.87%. Yield on the benchmark 10-year Treasury note rose to 2.27%.

Market Value

This month, DivGro's market value increased by 1.19% to $444,254. Compared with June 2016's market value of $319,411, the year over year increase is 39%.

Market ValueCash DepositsSimple Return
Jun 30, 2016
$319,411.35$273,702.2716.70%
May 31, 2017
$439,017.07$331,816.2332.31%
Jun 30, 2017
$444,253.52$333,442.1233.23%

Given the current market value, my portfolio has delivered a simple return of 33.23% since inception. In comparison, DivGro's IRR (internal rate of return) is 14.39%. IRR takes into account the timing and size of deposits since inception, so it is a better measure of portfolio performance.

The following chart shows DivGro's market value breakdown. Dividends are plotted at the base of the chart so we can see them grow over time.



Portfolio

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


I track the yield on cost (YoC) for individual stocks, as well as an average YoC for my portfolio. DivGro's average YoC decreased from 4.03% last month to 3.78% this month. The decrease is due to selling STAG and buying several non-dividend paying stocks.

Another interesting statistic is percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 9.41%, down from last month's 9.62%.

Finally, DivGro's projected annual yield is at 4.47%, up from last month's value of 4.43%. I calculate projected annual yield by dividing PADI ($14,917) by the total amount invested ($333,442).

Goals Review

I've set some challenging goals this year:
  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 181 out of 365 days:


I'm ahead of schedule with all my goals except for DivNet, which remains stuck at 0%! I'm hoping to get around to writing a few articles for The DivNet soon.

Looking Ahead

I'm looking forward to publishing guest posts on DivGro. Writers are invited to submit articles related to Dividend Growth and Value Investing, Financial Independence and Frugal Living, and Using Options to Boost Dividend Income. Please refer to my Guest Posts page for submission guidelines.

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

Thanks for visiting! Please feel free to comment on this review article below.

30 comments :

  1. Awesome job as always Ferdi! You're crushing your goals and getting over $2k in one month is incredible. I tend to only hit that in December, though I have a chance at September this year as well, we'll see. Incredible job on the YoY growth too. I'm sorry your tech stocks have recently moved the wrong way. Looking forward to seeing your thoughts on them. I like CSCO pick up. Take care!

    ReplyDelete
    Replies
    1. Thanks for reading and commenting, Passive Income Dude !

      Getting $2k in a month is great and I hope you get to that mark in September!

      The tech-heavy Nasdaq had a down month in June and it seems like the downturn is continuing into July. So certainly something to keep an eye on. It could forecast a downturn for the stock market, especially if the Trump agenda of tax reform gets sidelined. I'm hoping for the best, but, if that happens, I'll get to add to my positions at lower prices!

      All the best and happy investing!

      Delete
  2. That is fantastic. You are kicking goals!
    It's great to see that hard work pays off. Keep increasing those dividends and you are the one who wins in the long run. This month was absolutely huge for you, 2k in a month from dividends, that beats my whole year haha.
    Well done keep it up!

    ReplyDelete
    Replies
    1. Thanks, BHL -- I appreciate your comment. All I can say is stick with your plan... soon enough you'll earn the same kind of dividends! It is amazing to see the power of compounding work in your favor. I started a few years ago with tiny monthly dividend income. Reinvesting dividends, adding capital every month, and dividend growth have all contributed to where DivGro is today.

      Delete
  3. That's a rocking awesome amount. I'll be ecstatic when I hit 1000 a month I'm not anywhere close. Good job keep it up.

    ReplyDelete
    Replies
    1. Hi, Dividendsandhobbies -- as I mentioned to BHL above, just stick with your plan. The power of compounding really works, especially if you reinvest dividends, add new capital every month, and invest in solid dividend growth companies. All the best to you and happy investing!

      Delete
  4. A 15K PADI is really great. That creates a solid basis already. Add to that 8K of options income and you have a possibility to be FI in certain areas in the world. Top results

    ReplyDelete
    Replies
    1. Thanks, Amber -- I appreciate that 15K plus 8K would be enough for FI elsewhere, but, alas, not where we live. The Bay Area is quite expensive and getting more so it seems. All the best to you!

      Delete
  5. Hi,
    Would you explain why you chose GOOG instead of GOOGL?
    Thanks

    ReplyDelete
    Replies
    1. Hi, jj -- GOOG is Class C shares without voting rights. Because of that reason, the market discounts GOOG slightly. I don't care to vote and would rather pay slightly less for the shares.

      Delete
  6. Wow some nice non dividend paying stocks that you purchase,are we going to see an article on them.I did buy NVDA in june but i did ended up paying premium price for it.

    ReplyDelete
    Replies
    1. Yes, I'll write about my non dividend paying stock purchases soon. I'm quite busy but hoping the slower summer months would give me a chance to catch up! Take care and happy investing!

      Delete
  7. Very curious to hear about adding the non-dividend paying stocks. I have a couple of non-dividend payers before I switched over to a Dividend Growth strategy. But wondering why you made the purchases after following your established plan for so long. Looking forward to hearing why soon.

    Great month and quarter as well. Congrats.

    ReplyDelete
    Replies
    1. Hi, Mike -- I write about those purchases soon. Thanks for your comment and happy investing!

      Cheers
      FerdiS

      Delete
  8. Hi FerdiS,

    congrats on flying past the 2k for the month of June. That are some awesome numbers. I like the purchase of 100 more Cisco shares. I just opened a small position in CSCO and plan on adding.
    My dividend income for June came in as 288,42$, a YOY increase of 215%...

    Cheers,
    DividendSolutions

    ReplyDelete
    Replies
    1. Hi, DividendSolutions -- thanks for your comment!

      A YOY increase of 215% is stunning, congratulations and keep up the good work. You'll see you dividends increase in no time; just keep at it!

      Happy investing!

      Delete
  9. $2000 in one month is amazing, I can't wait to catch up to where you are. I was just shy of $850 for the first time and am excited to be close to breaking $1000 for the first month from dividends hopefully in the near future. Keep up the inspirational journey!

    ReplyDelete
    Replies
    1. Thanks, Duncan! Your income total of nearly $850 is great -- and just about where I was a couple of years ago (Jan '15). Hang in there and you'll break the $1k barrier soon enough. Take care and happy investing!

      Delete
  10. Truly impressive dividend income total. I'm getting close to $1,000. $2,000 is serious cash. Nice work Ferdi.

    ReplyDelete
    Replies
    1. Thanks, Investment Hunting -- keep going and you'll hit those marks soon enough. On the first chart in this article, you can see when I hit various levels for the first time. For example, I crossed $1,000 for the first time in March 2016.

      Delete
  11. Great month. That snowball is rolling pretty fast now!

    Can't wait to read about how the FANG stocks fit into the DivGro portfolio. I mean if they did pay a dividend, you would expect it to be a growing one considering the way they crank out FCF...but they don't...

    ReplyDelete
    Replies
    1. You're right, catfishwizard -- the snowball is gathering some serious extra layers quickly!

      As for the FANG stocks, I'll write something soon. (For the time being, just think of my investment as a premature investment in future dividend paying stocks :-))

      Delete
    2. I look forward to the post. I don't doubt that Facebook and Google will eventually start paying a dividend.

      Netflix I wonder if their moat is wide enough to sustain this position. There are lots of other content providers nowadays.

      IDK about Amazon. A company pays a dividend because they don't have (or don't think they have) anything better to do with the capital than return it to shareholders. Jeff Bezos strikes me as someone who will always consider himself smartest guy in the room. For better or worse, I'd be surprised if he ever pays a distribution.

      Delete
    3. You might be right about Netflix and the competition is creeping up, though Netflix has years on the competition! As for Amazon, it will be a while before the company pays dividends. AAPL was like that with Steve Jobs at the helm, but now the company pays a dividend. Perhaps we'll have to wait until Bezos retires!

      Delete
    4. Yes, it could be a long time...

      Delete
  12. Wow awesome month. Keep up the good work. Very impressive

    ReplyDelete
    Replies
    1. Thanks for visiting and commenting, Freezeman24! All the best and happy investing.

      Delete
  13. Good job Ferdi! I love all the tracking you're doing and that's a great increase, you're really getting a lot of dividends now. We'll be lucky to get half your monthly total in a whole year :D

    Mr DDU

    ReplyDelete
    Replies
    1. Thanks, Mr DDU -- Everybody's got to start somewhere, it's just a matter of time in the market! I started with DGI in January 2013, so I've been at it for more than 4 years. Just keep at it and you'll get there soon enough!

      Delete

Contact Form

Name

Email *

Message *

Follow by Email