August was another eventful month in my Portfolio.  After registering a mixed bag of dividend-related happenings in July (including a dividend cut that set me back), August also brought some ups and downs with respect to my dividend Portfolio.

Let’s begin with some good news though.  I collected a good total of dividends in August… over $800.  How far was I over $800?… stayed tuned, you’ll know shortly.

It was a better dividend total than last year, but my growth compared to last August was short of my monthly goal, and my lowest YoY growth percentage for any month in 2020.  We’ll soon see what growth I was able to capture.

I’m thrilled to report that I avoided any dividend cuts and suspensions in August, and had a couple of my holdings announce a dividend raise no less.  That’s more like it.

However, In August I sold my entire position in one holding that had a top 5 dividend weighting in my Portfolio, and that took a big chunk of my forward dividend income away.  It’s almost like a self-inflicted dividend cut.  I ended up adding to a few positions in August, too, but I couldn’t generate enough new forward dividend income to compensate (by a wide margin) for what was lost in the sale.

To finish on a good note, however, my Portfolio value rose again in August.  That’s now 5 months of gains in a row.  In fact, late in the month my Portfolio exceeded the highs it reached back in February.  It’s certainly been a good run.

Still, you’re here to see those August dividends, so let’s get to it…

 

Dividend Income

 

I rang the register with $829.14 in dividend income in August.  YoY growth was a decent 10.36%, when comparing this August’s dividend total to the $751.30 from August 2019.  This came up short of the 15% mark I like to target for YoY growth.  This was also my lowest monthly YoY gain for the year, so that was a tad disappointing.  Still, I did manage double digit growth, so that’s something to be happy about.

A total of 15 companies paid me a dividend in August, with a couple of them reaching a triple-digit amount.  All payers provided at least $25 or more, except one.

Abbvie (ABBV) led my list of dividend payers this month, delivering a whopping $144.58.  Man, $150 is right around the corner, especially if ABBV delivers a dividend raise in October.  Procter & Gamble (PG) was my other triple-digit payer in the month, providing me with $102.57.

The increased dividend amounts from ABBV, General Dynamics (GD) and Starbucks (SBUX) 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 PG, Fastenal (FAST), Nexstar Media Group (NXST) and Texas Instruments (TXN) were all organic, and all posted YoY increases in the $8-$12 range.

Lowe’s Companies (LOW) dividend didn’t show much of an advance compared to last year since they chose to forego a dividend raise in May, and they have one of the lower yields in my Portfolio.  However, LOW was able to boost their dividend in August, so next year we should see a better jump in the dividend.  How big of a raise was it?  You’ll find out in no time, just keep reading.  LOW is in my Portfolio to provide some nice capital appreciation, and some above-average dividend growth.

I had a pair of dividend payout reductions this month that were due to partial sales of the positions over the past year.  Those were from Hormel Foods (HRL) and Realty Income (O).

Compared to last August, my Portfolio only had a single new dividend payer this time around.  That new payer was Caterpillar (CAT), which was added to my Portfolio in late August of 2019.

Three stocks no longer paid me a dividend in August, and those companies are: Cognizant Technology Solutions (CTSH), Zions Bancorp (ZION) and D.R. Horton (DHI).  These stocks were all sold in late 2019 for various reasons, and should disappear from my table by next quarter.

As usual, I reinvested all dividends into the stocks that paid them, resulting in an additional forward dividend income boost of $27.94.  I was able to surpass my $25 monthly target again this month, but the monthly totals have been quickly dropping as the stock market climbs higher in value.  That’s a fair trade off though, right?

As a result of the reinvested dividends, I purchased roughly 10.5 new shares of stock in August.  This includes over 1 share each for ABBV, FAST, and Omega Healthcare Investors (OHI).

 

Dividend Raises

Thankfully, I only see green in the ‘% Increase’ column of my table below.  For years, it was the only color I’d see there.  However, once 2020 started, red (indicating dividend cuts) made an appearance.

While the number of dividend raises is still at a comparatively small level, at least a couple of them came my way this month.  Mid to upper single digit raises sound terrific these days, so both of the ones announced in August put a grin on my face.

Illinois Tool Works (ITW) was the only company I was expecting to hear from in August, and they delivered.  It was a 6.54% raise leading to a $17.13 increase in my forward dividend income.

LOW on the other hand, was a surprise.  Back in May, with plenty of uncertainty in the business environment due to the pandemic, LOW kept their dividend steady, bypassing their normal time for a dividend raise.  It wouldn’t have been surprising to see LOW wait until next year to raise their dividend again.  However, they came through with a raise in 2020 after all.  Their business has been better than expected as people seem to be focused on improving their homes given they are spending so much time there these days.

It was a 9.09% raise from LOW, resulting in $17.69 of additional forward dividend income for me.

 

 

These two dividend raises increased my forward dividend income by $34.82.  I’m back to positive numbers and thrilled about it.  Let’s hope it lasts for more than one month.

I’d have to invest $1,370.87 at my Portfolio’s current average yield of 2.54% in order to receive the same boost to my forward dividend income as this month’s raises.

Looking ahead to September, I’m planning to hear about raises from a couple of Technology names in TXN and Microsoft (MSFT).  There should also be a couple of small quarterly raises from W.P. Carey (WPC) and O if all goes according to plan.

 

Dividends Due To New Investment

The big news in August for me on the transaction front was my sale of Exxon Mobil (XOM).  I left open the possibility of purchasing some of it back after realizing my capital loss.  However, as the month has passed, I’m thinking I won’t start a position in XOM again.  I think my investment dollars are better off invested elsewhere.

Unfortunately, the sale put a big dent in my forward dividend income.  I made a couple of purchases after that to start the process of recouping that lost income, but it wasn’t nearly enough.

I’ll have to use the remainder of my sale proceeds, and plenty of additional cash before I manage to get back to where I started.  My XOM yield was nearly 8% when I sold, and it was a top 5 position in terms of dividend weighting, so it will require a huge effort to regain my previous forward dividend income level.

Anyway, in total, there were 2 purchases and 1 sale in August.  The sale eliminated my XOM position, and the two purchases were additions to existing Portfolio stocks.

You can read all about these 3 transactions in the following post:

Recent Transactions – XOM, AFL, MMM

Accounting for all the transactions, it ended up being a net withdrawal of $2,585.94.  Additionally, my net forward dividend income from capital investment was a negative $357.59.  OUCH!  As you can see, there’s plenty of work to do to recoup all that dividend income.

The one sale eliminated a stock from my Portfolio, so the number of holdings now stands at 48.  In addition, I no longer have a holding in the Energy sector.  So that’s now no Energy positions, and no Utility positions.

 

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.

 

 

Looking at another negative number for the month of August doesn’t make me too happy.  This was all due to my XOM sale, otherwise it would have been a decent month with regard to forward dividend income.  Three of the past four months have now resulted in decreases in my forward dividend income.  This is not a trend I wish to continue.  At least, I like the dividend safety in my Portfolio much more now that XOM has departed.

You can see I have a negative number in my Investment of Capital category for the year (that’s despite investing a net $2,465.26 since the beginning of the year).  I absolutely plan to make this a positive number by year’s end.  I’ve made lots of transactions in 2020, but it hasn’t resulted in a big investment of capital.  Instead it’s been a re-balancing and clean-up of positions within my Portfolio.

Dividend Raises were my best category in August, after being my weakest in July.  At least I have an increase in the Dividend Raise category for the year.  That’s a decent accomplishment considering all the dividend cuts and suspensions in 2020.

Reinvested Dividends is looking like it might finish the year as my best performing category for additional forward dividend income.  The lower stock prices late in the 1st quarter and throughout the 2nd quarter led to some nice totals each month.

It certainly looks like I won’t come anywhere close to last year’s additional forward dividend income total.  However, I’ll look to finish out 2020 as best I can.

 

Progress Charts

The following are progress charts, also available on my Dividends page.  My streak of YoY gains may come to an end in December if I can’t recoup the lost income from the XOM sale.

 

 

On an annual basis, here’s what the dividend totals look like.  I’d say I’m on pace for about $11,250 in dividend income for 2020.

 

 

Summary

It was another mixed bag for all things dividends in August.  This followed a similar effort from July.

On the bright side, I collected over $829 in dividends from 15 different dividend payers.  However, YoY growth came in at a little over 10%… my lowest percentage of the year.

My reinvested dividends continued their strong showing though.  My forward dividend income was raised by nearly $28 as a result of reinvestment.

I suffered no dividend freezes/cuts/suspensions in August.  On the other hand, I did have a couple of nice dividend raises.  The two raises led to almost $35 of additional forward dividend income.

Selling my entire XOM position resulted in a monster decrease in my forward dividend income.  It’ll take weeks or months before I probably recoup all the lost dividend income.  Despite two purchases as well, the sale dominated the purchases and I was subjected to a significant decrease of over $357 of additional forward dividend income due to “new investments”.

Overall, as far as additional forward dividend income for all categories was concerned, I recorded my 3rd loss in the past 4 months.  It was my worst effort of the year, showing a retreat of about $295.  I’m hoping the negative numbers are behind me at this point, and I look forward to future months being in the black.

While dividends have been up and down, my Portfolio value continued it’s upward climb, rising for a 5th straight month of gains.

 

Have you been reluctant to purge a stock from your portfolio for fear of losing the dividend income it provides?  If so, what higher-yielding stocks have possibly overstayed their welcome in your portfolio?  Please share in the Comments!

I have updated the Portfolio & Dividends pages in conjunction with this monthly update.  Something new… I’ve added a Portfolio Treemap to the Portfolio page, too.  Check it out!