It was another mixed bag for all things dividends this month.  That seems to have become the new normal, unfortunately.

On a positive note, the dividend income continues to roll in (for the most part).  I exceeded my monthly YoY growth target in July, too, so that was a noteworthy development.

However, I suffered another dividend cut this month, my worst so far, and that put a hefty dent in my forward dividend income that a couple of small raises couldn’t compensate for.

I did manage to sneak in some purchases over the past month, so that helped to further mute the losses to my forward dividend income at the hands of that dividend cut.

Despite those Portfolio gut punches in the past quarter from those cuts & suspensions, my Portfolio continues to grow in value.  The stock market seems to be defying gravity as it climbs higher.  This seems all the more amazing given the corporate earnings reports we’ve seen in the past few weeks.  There have been plenty of reports detailing significant losses in revenue and income, yet the stock market seems to shake it off and anticipate better days ahead.

Anyway, let’s get the dividend ball rolling and start by checking out the dividend income my Portfolio added in July.

 

Dividend Income

 

A tidy sum of $756.50 in dividend income was registered this July.  YoY growth was a robust 21% (exactly) when comparing this July’s dividend total to the $625.20 from July 2019.  This easily exceeded the 15% mark I like to target for YoY growth.

A total of 17 companies paid me a dividend in July.  None of them reached the triple digit level, but they all eclipsed double digits, and only a couple fell below the $25 level… so great contributions all around I’d say.

Altria (MO) led my list of dividend payers this month, delivering a solid $93.51.  With MO’s big dividend yield, my dividend reinvestment, and the dividend raise from MO this month, I anticipate I’ll be over a $100 dividend payment from MO with the first payment of 2021 (fingers crossed).

Looking at the dividend income table, one might think Sysco (SYY) was my smallest dividend payer in July, delivering $11.35.  However, I’m letting The Walt Disney Co. (DIS) wear that crown this month, as DIS was supposed to deliver its first dividend to me in July.  Understandably, DIS decided to forego a July dividend payment while they wrestle with the impact of the pandemic on their businesses.  Yet, it’s still disappointing to collect nothing from a holding in my Portfolio.

The increased dividend amounts from JPMorgan Chase & Co. (JPM), Air Lease (AL), Eastman Chemical (EMN) and Comcast (CMCSA) were helped by 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.  The dividend gains from MO, RPM International (RPM) and Illinois Tool Works (ITW) were all organic and were quite healthy.

As a result of all the REIT trimming I’ve done over the past year, I had a pair of dividend payout reductions this month.  The reductions were from W.P. Carey (WPC) and Realty Income (O).

Compared to last year, my Portfolio saw three new dividend payers this July.  The group of new payers was led by Automatic Data Processing (ADP), which is a position I’ve been building consistently since late February.  The payment does not reflect the share additions I made after the last ex-dividend date, so expect ADP to move up the payout table next quarter.  Other new payers include Cisco Systems (CSCO) and SYY.  DIS would have been part of this list had they been able to make their regularly scheduled dividend payment.

Only one stock no longer paid me a dividend in July, and that was Cardinal Health (CAH).  I sold CAH about one year ago thanks to uncertain growth prospects and dwindling dividend growth.

As usual, I reinvested all dividends into the stocks that paid them, resulting in an additional forward dividend income boost of $30.22.  I’ll happily take anything that surpasses the $25 target I set for this on a monthly basis.

As a result of the reinvested dividends, I purchased over 14.4 new shares of stock in July.  This includes over 1 share for five different stocks (more than 2 shares in the case of MO).

 

Dividend Raises

I already miss the days when dividend raises came in like clockwork.  Now it seems we’re on pins and needles most every day wondering which company might be next to forego a dividend raise, or even worse… cut or suspend it.

Well, July fell into line with a less-than-predictable parade of dividend ‘raises’.  I did have a couple of raises, but I had a couple of freezes, too… not to mention a nasty dividend cut which overwhelmed any positive gains I logged.

It was mid-month before anything transpired, but when something did get announced, it wasn’t pretty.  Wells Fargo & Co. (WFC) started off my month with a horrible dividend cut of just over 80% on the heels of a Q2 loss and a big build in their credit loss reserves.  My lost dividend income from this cut approached $200.

My best news of the month came from Skyworks Solutions (SWKS), which announced a wonderful 13.64% raise.  This was right about on pace with their 3-year dividend growth average, but it feels especially large these days.

MO also announced a raise in July, too… 2.38%.  It was certainly smaller than the one from SWKS, but any raise in this environment is more than welcome.

I was expecting the SWKS and MO raise announcements in August, but they pulled them forward a bit and they ended up in July.  Good thing for me, too.  If neither of these two had announced earlier than expected, I would have been shut out of any raises for the month – a disturbing occurrence from recent months that I don’t wish to continue.

As for the freezes. I was expecting possible raises from Union Pacific (UNP) and TCF Financial (TCF), too.  However, given how both their businesses have been negatively impacted by the pandemic, foregoing any raise at this time is understandable.  At least the payout was maintained!… which is more than I can say for WFC.

 

 

After adding it all up, the dividend changes decreased my forward dividend income by a whopping $155.78.  So much for that positive number from last month!

I’d have to invest $5,706.23 at my Portfolio’s current average yield of 2.73% in order to recover the lost forward dividend income from this month’s “raises”.  Ouch.  Needless to say, WFC is in my Portfolio doghouse right now.

Looking ahead to August, the month no longer has the potential it once did.  This is due to a couple of companies on my raise list announcing a bit early (in July), as noted earlier.  That leaves only ITW as a holding that I might expect a raise from.  Hopefully, ITW can deliver something positive, and I can avoid any further cuts/suspensions, getting me back to gains in forward dividend income next month.

 

Dividends Due To New Investment

I had a few transactions in July, after no activity in June.

There were 3 purchases and 1 sale.  All the purchases were additions to existing Portfolio stocks, and two of the three purchases were of the same company.  Meanwhile, the sale was of a company that I’d discussed purging from my Portfolio several times over the past few months.

You can read all about these transactions in the following two posts:

Recent Buys – GD & ADP

Recent Transactions – KTB & ADP

Accounting for all the transactions, it ended up being a net investment of $1,916.08.  Additionally, my forward dividend income from capital investment came in at $58.40.  This was my biggest monthly boost to forward dividend income from new capital investment since March.

The one sale eliminated a stock from my Portfolio, so the number of holdings now stands at 49.

 

Tallying Up The Additional Forward Dividend Income

In 2020, I continue tracking my additional forward dividend income generated each month from the trifecta of sources: reinvested dividends, dividend raises, and new capital investment.

I’ll be showing 2019’s totals, too, so that we can compare as the year progresses.

 

 

Sadly, overall there was no additional forward dividend income generated in July.  Instead there was a reduction of $67.16, all thanks to WFC.  This was my 2nd reduction in the past 3 months.

As you can see from the bottom row of the table, when it comes to additional forward dividend income, I’ve basically been treading water for the past 4 months.  Not good!

In addition, the forward dividend income from Dividend Raises is now my weakest contributor for the year.  At the end of Q1 it was easily the strongest contributing category.  What a difference a few months can make!

Investment of Capital led the charge to add forward dividend income for me this month, and Reinvested Dividends put up another strong showing in July.  Despite this, Dividend Raises weighed down my advances in July, and they threaten to leave me short of my forward dividend income goals for the year.

 

Progress Charts

The following are progress charts, also available on my Dividends page.  Solid YoY gains continue… hard not to like that.

 

 

On an annual basis, here’s what the dividend totals look like.  I have nearly accumulated as much dividend income in the first 7 months of 2020 that I did in the entirety of 2017.  Not too shabby!

 

 

Summary

There was some good and bad on the dividend front in July.

I raked in over $756 in dividends from 17 different dividend payers.  YoY growth came in at a very nice 21%, too.

Reinvested dividends stayed strong, as well.  My forward dividend income was raised by more than $30 as a result of reinvestment.

Let’s not forget I was also able to invest some capital in July.  Essentially, $1,916 was put to work in my Portfolio.  That led to another $58 of additional forward dividend income.

That’s the good stuff.

As for the bad stuff, it mostly stemmed from a dividend cut at the hands of WFC.

The 80% cut led to a significant reduction in my forward dividend income.  The pair of dividend raises I was able to secure didn’t erase much of the loss either.  Therefore, I registered a big negative number in the dividend raise category.  This wiped out the gains I had from reinvestment and new investment as well, resulting in another negative month for additional forward dividend income overall (-$67)

As for my Portfolio value, it was a 4th straight month of gains, so that takes away some of the sting from the dividend cut.

 

It’s been difficult to sustain any positive momentum in this environment of dividend freezes, cuts & suspensions.  Do you think the worst is over, or are we just getting started?  Please share in the Comments!

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