With December’s dividend totals now complete, we finally get to put a bow on 2020.  The year certainly didn’t unfold like we planned, that’s for sure.

The arrival of the pandemic led to a massive stock market decline starting in late February, only to be followed by an unexpected rebound that started in late March.  What was lost in 1 month took several months to recover.

While the market started recovering in late Q1, the dividend damage was just starting.  The middle months in 2020 saw a good number of companies either cut or suspend their dividends.  Countless others froze their dividend.  In addition, the dividend raises we saw were muted compared to the recent past.

However, by September or so, dividends were on the mend.  The dividend cuts and suspensions slowed and seemed to fade by year’s end – we could focus on the dividend raises again.

When all was said and done, 2020 returned solid double-digit gains for my Portfolio, and I finished the year with 4 months in a row where my Portfolio saw good forward dividend income gains.  However, before we put a cap on the year, let’s talk about December.

Going into the final month of the year, I thought I was going to have my lowest YoY growth month of the year.  Every month during 2020 showed better than 7% YoY growth, but I was expecting only 1% or so in December.  However, thanks to a couple of unexpected events, December turned out much better than expected.  So much better, that I set a new monthly dividend record… more on that below.

December dividend raises were good, as I managed a handful of them.  However, one stood out above the others, as you’ll see.

I didn’t invest any fresh capital in December, but I did make a few minor transactions in my Portfolio – 4 to be exact, with 1 of those introducing a new holding to my Portfolio.

The best part of December had to be reaching a big milestone.  In the later half of the month, about the time of the Broadcom (AVGO) dividend raise, I crossed the $12K plateau with regard to annual forward dividend income.  This means I can now expect, on average, over $1K/month in dividends moving forward.

So, let’s start by taking a closer look at my dividend totals from December, and then see how I wrapped up the year.

 

Dividend Income

 

It was a new monthly record!  In December, I recorded an unexpected dividend total of $1,333.35.  This ended up being more than I expected thanks to:

1. The special dividend from Fastenal (FAST)
2. Nike (NKE) moving their early January dividend payment into the last week of December.

These two events were enough for me to establish a new monthly record, beating out the previous best of $1,327.51 from last March.

In addition, I surpassed my monthly YoY growth target goal of 15%, with 15.83% growth when comparing this December’s dividend total to the $1,151.12 from December 2019.  Note – my YoY growth would have been less than 2% without the FAST and NKE dividends.

A total of 20 companies paid me a dividend in December… with 4 of them delivering triple-digit dividend amounts!

Qualcomm (QCOM) was my top dividend payer this month, sending me $135.57.  Due to QCOM’s great price appreciation in 2020, it’s now easily my largest Portfolio holding, yet it’s still behind AbbVie (ABBV) as my top dividend payer overall.

The other triple-digit dividend payers for me in December were FAST, AVGO, and T. Rowe Price Group (TROW).  I was able to get AVGO to triple-digit income through some aggressive buying during the market downturn in the spring.  Perhaps Johnson & Johnson can join the triple-digit dividend payer group for me sometime next year.

My smallest December dividend came from Microsoft (MSFT), at $5.63.  I’d like to see this payout be bigger, but adding more shares is causing me some angst, as MSFT seems overvalued today (doesn’t it always?).  So, I’m contemplating dollar cost averaging, 1 share a month, into Microsoft during the course of 2021, to build up my position and increase that dividend payout.

The increased dividend amounts from Aflac (AFL),  3M Co. (MMM) and UnitedHealth Group (UNH) 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 YoY dividend gains from QCOM, TROW and BlackRock (BLK) were all over $10, and all organic (combination of dividend raises and dividend reinvestment).  JNJ and Skyworks Solutions (SWKS) both posted nearly $8 YoY organic dividend gains for me as well.

Sadly, I did have 4 dividend payout reductions in December.  For Gilead Sciences (GILD), TCF Financial (TCF) and Realty Income (O), the dividend reductions were due to partial sales of mine earlier in the year.  I used the proceeds to establish new positions I’d been wanting, and the market’s falling stock prices in the spring were the catalyst for me.  The dividend reduction from Main Street Capital (MAIN) was due to MAIN not paying their bi-annual special dividend.  Hopefully, the special dividends from MAIN will resume in 2021.

If we ignore FAST and NKE (for the special reasons outlined above), I had 3 new dividend payers this year compared to last December.  These were AVGO, Walgreens Boots Alliance (WBA) and MSFT.  As you can see, AVGO debuted in my list at a high level.  WBA wasn’t too far behind, but MSFT debuted at the bottom due to my smaller investment and the stock’s lower than average yield.

Making it hard to establish a new record in December was the fact that I had 4 stocks that no longer paid me a dividend in December.  All 4 were stocks I sold during the year.  I sold Exxon Mobil (XOM) for poor performance and a questionable dividend moving forward.  Crown Castle International (CCI) was sold during the paring down of my REIT holdings.  Target (TGT) was sold due to an assigned call option I wrote.  Lastly, Kontoor Brands (KTB) was sold shortly after its dividend suspension… partly because of that suspension, and also because it was my smallest position, and one that I didn’t foresee adding to.

As usual, I reinvested all dividends into the stocks that paid them, resulting in an additional forward dividend income boost of $35.76.  I easily bested the $25 target I have on a monthly basis, but that’s expected during the quarter-ending months where my dividend income is larger than in other months of the quarter.

As a result of the reinvested dividends, I purchased over 14.6 shares of stock in December.  This includes over 2 full shares of FAST, and over 1 full share of the following stocks: AFL, WBA, GILD and TCF.

 

Dividend Raises

The 5 dividend raises I got last month were followed with another 5 in December.  However, the raises were not close to being equally weighted, with one stock doing the heavy lifting and establishing most of my $ increase for the month.

The month started off with a 4.55% raise announcement from Eastman Chemical (EMN).  This is about half the normal raise from recent years, but I’ll provide a pass considering the uncertain economic environment the company had to navigate this year.

The next two raises were the small quarterly ones from a couple of my REITs.  O and W.P. Carey (WPC) delivered raises of 0.21% and 0.19%, respectively.  For the year, O’s five dividend raises totaled 3.08%, while the four from WPC totaled 0.77%.  Needless to say, the O total was significantly better.  Dividend growth for WPC has been under 2.5%, and falling, for 5 years in a row now, which is disappointing.

My best dividend raise of the month came from AVGO, which boosted their dividend by 10.77%.  This nice raise percentage coupled with AVGO being one of my largest dividend payers, led to a good bump in my forward dividend income, at nearly $45.

One of my newer holdings didn’t take long to boost their dividend.  Amgen (AMGN) announced a double-digit dividend raise for me in December, exactly 10.0%.  However, since my position is so small, the forward dividend income boost was rather tame, at less than $4.  Hopefully, I can increase the size of my AMGN position during the course of 2021, so that if another 10% dividend raise shows up next December, it’s impact on my forward dividend income will be more significant.

 

 

These 5 dividend raises increased my forward dividend income by $57.15.  This was my 5th best monthly raise total of the year, and better than my average month as well.

I’d have to invest $2,411.39 at my Portfolio’s current average yield of 2.37% in order to receive the same boost to my forward dividend income as this month’s raises.

Looking ahead to January, plenty of raise announcements are expected, as this is still the most wonderful time of the year for dividend raises.  I hope to hear at least 7 dividend raise announcements.  These include O’s primary dividend raise of the year, as well as annual raises from FAST, BLK, Comcast (CMCSA), Air Products & Chemicals (APD), Quest Diagnostics (DGX) and Nexstar Media Group (NXST).  I hope 2021 dividend raises get off to a good start!

 

Dividends Due To New Investment

While I did make 4 transactions in December, they didn’t result in a net investment.

I ended up making a couple of stock swaps… 2 sales with corresponding buys… and these resulted in a slight net withdrawal from my Portfolio.  On the plus side, my forward dividend income went up marginally.

The sales had me lighten up a bit on my overall Industrial weighting, while boosting my Consumer Discretionary and Healthcare weighting.

The first swap saw me sell a portion of my Caterpillar (CAT) stake, and invest the proceeds into more of Lowe’s Companies (LOW).

The second swap saw me sell a small portion of my Air Lease (AL) position, and invest the proceeds into a new stock, Merck (MRK).

You can read all about these December transactions in the following post…

 

Recent Transactions – Portfolio Tweaks

 

In total, I made an net withdrawal of $19.65.  However, my forward dividend crept higher by $0.40.

With the introduction of MRK to my Portfolio, my number of holdings now stands at 50.

 

Tallying Up The Additional Forward Dividend Income

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

I showed 2019’s totals, too, so that we could compare as the year progressed.

 

 

A 4th consecutive month of positive numbers in all 3 categories led to a decent monthly total of $93.31.

Dividend Raises paced the categories for 3rd month in a row, and it finished on top for the entire year as well.  It was nice to cross the $500 level for the year, too, even though it was well off last year’s total.  The stunted dividend raises during the year, and the handful of cuts/suspensions I had, were the culprits in my YoY decline in this category.

Investment of Capital totals were reduced in 2020 as well.  Despite investing a comparable amount of capital in 2019 and 2020, I found myself selling a few higher-yielding stocks over the course of 2020 which made it more difficult to boost my forward dividend income.

Reinvested Dividends was my only category to surge ahead compared to 2019.  When the market downturn occurred in the spring, my reinvested dividends were buying more shares, which resulted in generating more forward dividend income than anticipated.  In this case, I was able to eclipse the $400 mark for the year, a healthy bump up from 2019.

For the year, the table shows an additional forward dividend income boost of $1,230.43.  However, it actually ended up being slightly higher than that ($1.42 higher at $1,231.85), as during the year a few announced dividend raises didn’t apply to the next dividend payment, and the adjustments to account for that boosted the number just a bit.

The good news is this $1,200+ amount was enough to allow me to reach a big milestone, which I’ll detail a bit later.

 

Progress Charts

The following are progress charts, also available on my Dividends page.  It was a new monthly record in December, and the continuation of a long streak (60 months) of monthly YoY gains.

 

 

On an annual basis, here’s what the dividend totals look like.  I’ve got a nice stairstep going here, with the anticipation that in 2021 I’ll be climbing even higher.

 

 

Annual Growth

With the close of 2020, let’s take a look at the YoY growth of my actual dividend income, as well as my forward dividend income.

Actual Dividend Income

The annual numbers for actual dividend income can be seen in the chart just above.  I finished 2019 with $10,049.68 in dividends, while I finished 2020 with $11,634.54 in dividends.  This was YoY growth of 15.77%.  This growth percentage continues a downward trend from previous years, but this is to be expected as the dividend numbers continue to grow.  Any double-digit growth is welcomed, and I’d like to see if I can get my dividend totals to double in 6 years from now.

Forward Dividend Income

Let’s now examine my annual forward dividend income numbers.  I finished 2019 with $10,804.29 in forward dividend income, while I finished 2020 with $12,036.14 in forward dividend income.  Yes, this was the big milestone… $12K in forward dividend income, or a cool $1K/mo. on average.  How sweet it is!  This was YoY growth of 11.40%.  This was a more noticeable step down in growth compared to what I had with actual dividend income, but I hope to improve on this growth in 2021 with better numbers from Dividend Raises and Investment of Capital.

 

Summary

It was a record dividend total in December, thanks to a pair of unexpected dividend amounts.  Even better, my annual dividend totals were records as well, although that’s usually the case when looking at an entire year.

December brought 4-digit dividend income, healthy YoY growth, a nice collection of dividend raises, a new Portfolio holding, and additional forward dividend income.

To be more specific, I collected over $1,333 in dividends from 20 different dividend payers.  YoY growth in December exceeded my monthly 15% target by reaching 15.83%.

Forward dividend income due to reinvested dividends closed out a strong year with almost $36 more in December.

I recorded another 5 dividend raises in December, the same total as last month, however, the boost to my additional forward dividend income was smaller at $57.  The dividend raise from AVGO provided the majority of this boost.

I made a pair of minor Portfolio tweaks.  These tweaks resulted in a minuscule $0.40 of additional forward dividend income, and a new Portfolio stock… MRK.

Tallying up the December contributions from all categories, I saw over $93 in additional forward dividend income.   For all of 2020, I had over $1,231 in additional forward dividend income.

Lastly, I enter 2021 with a forward dividend income of $12,036.14, or $1,003.01/mo., which was a special milestone, as I was hoping to reach $1K/mo. before the end of 2020.

Here’s hoping that our dividend results are even stronger in 2021…

 

It was an up and down year.  Did you finish with positive results (more dividend income, higher Portfolio value, something else)?  What stood out to you with regard to your Portfolio?  Please share in the Comments!

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