Happy New Year, everybody!

You know what else I’m happy about?  Reporting another month of dividend income.  Wrapping up the dividend totals for the year is great, too.

While I didn’t set a personal monthly dividend income record, I came close, and was able to cross a significant level.  More on that in just a bit.

With regard to additional forward dividend income… I set a record for the most generated for a month due to my reinvested dividends.  However, this was offset by my worst monthly amount as a result of dividend raises.  Finally, I had good forward dividend income generated due to new capital investment, as the dip in stock prices this month led me to more purchasing than normal.

In the midst of all the December transactions, I saw one company leave my Portfolio, and two new ones arrive.  Some fresh faces in the Portfolio!

Due to my escalated transaction activity, the Portfolio page will once again have a few more updates than usual, so be sure to check that out, too.

Let’s see how I closed out December, and 2018 overall…

 

Dividend Income

December’s dividend income just crossed the $1K mark, at $1000.41.  This my just my 3rd month over $1K, falling about $32 short of my all-time high set back in June, and about $3 short of September’s total.  Had Starbucks (SBUX) paid on the first day of December, as opposed to the last day of November this year, I would have set a record.  Not to fret though, as I’m sure a new record is not too far off.

This dividend total resulted in a healthy 20.85% YoY increase compared to the $827.84 from December 2017.

A total of 17 companies paid me a dividend this month.  The largest amount came from Qualcomm (QCOM), eclipsing $120.  The smallest amount came from Portfolio newcomer D.R. Horton (DHI) at $15.

The dividend amounts from Exxon Mobil (XOM), Blackrock (BLK), Gilead Sciences (GILD), Skyworks Solutions (SWKS) and Realty Income (O) mainly increased, or were significantly helped, thanks to additional purchases over the past year.

Increased amounts for the other companies were a result of dividend increases and reinvested dividends over the past year.  Those swelling amounts from QCOM, T. Rowe Price (TROW), Aflac (AFL), Union Pacific (UNP) were primarily thanks to either one large dividend raise, or two dividend raises over the past year.

I had a pair of new dividend payers arrive this December compared to last year.  This includes Hanesbrands (HBI) and DHI.  The HBI dividend will be short-lived, as I sold my entire position this past week when doing some tax loss harvesting.

Unfortunately, two dividend sources disappeared this December.  This first was SBUX, which I previously mentioned moved their payment date compared to last year.  The second was Hershey (HSY), which I chose to sell in 2018 as I looked for companies with stronger earnings growth.

In the “Add’l Fwd Inc” column, I show the amount of additional annual forward dividend income that resulted from reinvesting each of this month’s paid dividends.  December saw an addition of $34.81 from this category – a new record!  The falling stock prices this month helped my reinvested dividends purchase more shares, providing a better than normal monthly boost to my annual forward dividend income.  At least there’s one benefit to lower prices!

 

Dividend Raises

I was holding out hope that I could somehow get some unexpected dividend raises in December and reach my unwritten goal of a $1K boost in annual forward dividend income due to dividend raises.  Alas, I only received the dividend raises I was expecting, and they weren’t nearly enough to reach my goal.

I had 2 Portfolio companies raise their dividend.  Both are REITs which are currently raising no less than quarterly.

W.P. Carey (WPC) was the first to deliver a raise.  The raise was 1/2 cent, translating to 0.49%.  Assuming WPC continues to raise 1/2 cent each quarter, the annualized raise amount is about 2%.  This puts WPC near the bottom of my Portfolio for dividend growth.  I hope their dividend growth picks up in 2019.

My next dividend raise was my 2nd (and last) of the month, and it came from O.  This was O’s fifth raise of the year.  They typically deliver their best raise of the year in January, followed by smaller raises in each of the quarter-ending months.  This raise was 1/20th of a cent, or roughly 0.23%.  Over the course of the year, all of O’s raises resulted in a total YoY increase of 4.0%.

 

These raises contributed $1.79 to my annual forward dividend income.  I would have needed $78 to reach the $1K mark for the year.  While the raises were small this month, every raise helps.

I’d have to invest $59.67 at my portfolio’s average yield of 3.00% in order to equal the same boost to my annual forward dividend income that these dividend raises provided.  By the way, that yield of 3.00% is the highest it’s ever been for my Portfolio.

Looking ahead, January was one of my best months of 2018 for dividend raises (delivering over $123 in an annual forward dividend income boost).  Thus, I’m hoping the less-than-stellar result from December will soon be forgotten.  I’m expecting January raises from Bank OZK (OZK), BLK, O, Fastenal (FAST), AFL, Air Products & Chemicals (APD) and maybe 3M (MMM), depending on timing.

 

Dividends Due To New Investment

Just like last month, December saw another sizable collection of Portfolio transactions – 12 in total.  This broke down as 9 purchases and 3 sales.  Two of purchases introduced new stocks to my Portfolio, while one of the sales liquidated an entire position.  I’ll briefly summarize these dozen transactions here.  You can read more about them by following the provided links.

 

This first three transactions took place over the 1st half of December, and were covered in my Recent Buys (GILD, JPM, TGT) post.

On 12/3, I added 13 shares of Gilead Sciences (GILD) at $71.17/sh, adding $29.64 in annual forward dividend income.

On 12/6, I bought 25 shares of JPMorgan Chase & Co (JPM) at $103.75/sh.  This is a new position, adding $80 in annual forward dividend income.

On 12/13, I added 10 shares of Target (TGT) at $66.50/sh, adding $25.60 in annual forward dividend income.

 

The next group of three transactions all occurred on the 18th, and were discussed in my Recent Transactions (OHI, ABBV, MO) post.

On 12/18, I sold 20 shares of Omega Healthcare Investors (OHI) at $35.86/sh, reducing my annual forward dividend income by $52.80.

On 12/18, I added 14 shares of Abbvie (ABBV) at $84.06/sh, adding $59.92 in annual forward dividend income.

On 12/18, I added 20 shares of Altria (MO) at $51.3405/sh, adding $64 in annual forward dividend income.

 

The last group of six transactions transpired on the final trading day of the year, and were examined in my Recent Transactions (HBI, MMM, CAH, JPM, MO, CMCSA) post.

On 12/31, I sold 309.331 shares of HBI at $12.40/sh.  This was a complete liquidation, reducing my annual forward dividend income by $185.60.

On 12/31, I bought 25 shares of 3M Company (MMM) at $189.50/sh.  This is a new position, adding $136 in annual forward dividend income.

On 12/31, I sold 60 shares of Cardinal Health (CAH) at $44.3201/sh, reducing my annual forward dividend income by $114.31.

On 12/31, I added 20 shares of JPM at $96.90/sh, adding $64 in annual forward dividend income.

On 12/31, I added 10 shares of MO at $48.95/sh, adding $32 in annual forward dividend income.

On 12/31, I added 25 shares of Comcast (CMCSA) at $33.70/sh, adding $19 in annual forward dividend income.

 

More buying than selling this month.  These transactions resulted in a net capital investment of $7,207.09, and a net increase of $157.45 in my annual forward dividend income (my 2nd biggest amount for any month in 2018).

 

Annual Totals

I saw terrific progress in growing my annual income totals…

Dividend Income

In 2017 I recorded $6,705.87, while in 2018 I totaled $8,460.35.   This was an increase of $1,754.48, providing YoY growth of 26.16%.

The monthly average for 2018 was $705.03.  I like it!

 

Forward Dividend Income

I ended 2017 with $7,316.98 in projected forward dividend income.  That number ballooned to $9,276.42 by the end of 2018… an increase of $1,959.44, showing YoY growth of 26.78%

The current projected monthly average for 2019 will be no less than $773.04, but I of course expect this to climb higher given reinvested dividends, dividend raises, and investment of new capital over the course of 2019.

I was tracking annual forward dividend income prior to 2018, but at the start of 2018 I started breaking down where the additions were coming from, and created a table to show it.  I think it’s been revealing to see how the annual total grows thanks to each of the 3 sources.  This trifecta of sources (as I like to call it) boost my forward dividend income.  The sources are reinvested dividends, dividend raises, and new capital investment.  Check out how I finished up the year.

 

One can see I derived the majority of 2018’s additional forward dividend income from dividend raises, at nearly $924.  Add the amount from reinvested dividends and I was essentially at $1,189.  What’s nice about this total is that it provides an example of what I might be able to expect on a yearly basis for additional forward dividend income, even if I don’t invest any new capital.  Basically, the Portfolio is large enough that it can grow fairly significantly without any help from me.  What an awesome feeling!

Of course, I can accelerate that growth by adding fuel to the fire, which is investing new capital in the Portfolio.  In 2018, I did just that.  I added $33,865.52 in new capital, resulting in nearly $770 in additional forward dividend income.  I’m thrilled to have accomplished the gains I did for 2018, and look forward to pushing the numbers higher in 2019, even if the growth is more modest.

Note – my reported additional forward dividend income totals vary a bit ($1,959.44 vs. $1,958.60).  The first number is just a difference of end-of-year and beginning-of-year numbers, while the second number (from the table) is a summation of all 3 sources in each of the months of the year.  The difference could be rounding adjustments adding up over the course of the year, or a result of the when I made the calculations relative to the number of shares I had at that moment (which is always in flux).  I may take a closer look at this moving forward and see if I can catch where the discrepancy is creeping in by perhaps looking at these totals on a monthly basis as opposed to an annual one.  In any case, the numbers are close enough for government blogging work.  🙂

 

Summary

Despite all the market gyrations in 2018, I closed out the year with good December income ($1K), and record annual income ($8,460).  YoY dividend income growth was fantastic, at over 26%.  What’s not to like about that!  I’m excited to see what I can achieve in 2019!  I hope you’ll join me for the ride.

In the next few weeks I hope to have posts for:

• reviewing my 2018 goals
• establishing my 2019 goals
• the annual review of my Portfolio’s performance in 2018, and
• an examination of my Portfolio’s weighted dividend growth for 2018

Hopefully, I can get all that out.  Stay tuned.

 

Did your dividend portfolio grow as you’d hoped in 2018?  Or did you outperform your expectations instead?  If so, what put you over the top?  Please feel free to share in the comments!

I have updated the Portfolio & Dividends pages in conjunction with this monthly update.