Ahh, the first month of a new year.  Time to be full of optimism and excited about all we might accomplish.

2020 was challenging in many ways, but we’ve got reasons to believe that 2021 can be better… in life overall, and in our finances.

One thing I expect to be better in 2021 is the progress in my Portfolio.  While I don’t expect to invest any extra capital compared to last year, I do expect dividend raise percentages to improve.  Since dividend raises are my primary source of additional forward dividend income, solid dividend raises will translate into solid dividend growth in my Portfolio.

If you didn’t see them yet, I laid out my 2021 Portfolio Goals a couple of weeks ago.  Reading those, you can get a sense of how optimistic I might be for the coming year.

So, how did I kick off the new year?  Did January deliver the dividend goods?

Dividend income was good… not as much growth as I’d like to see, but I had a couple of outlier events which impacted that.  I’ll detail those shortly.

January is typically one of my best months of the year for dividend raises, and it did not disappoint this time around.  I didn’t have as many raises as I usually have, but the ones I did have delivered handsomely.

As for transactions, I was able to invest a small amount of new capital in January.  I also made some Portfolio adjustments to work towards one of my goals.  Wrapped up in these transactions was the purchase of a new stock for my Portfolio.  I’ll share that, too.

Best of all, I managed a significant bump to my additional forward dividend income thanks to reinvested dividends, dividend raises and new capital investment.  That’s the trifecta right there, and they were all in action in January.

Let’s examine my Monthly Dividend Income for January…

 

Dividend Income

 

In January, I recorded a dividend total of $855.88.  This was a bit lighter than I was expecting just a month ago thanks to:

1. Nike (NKE) moving their normal January dividend payment into the last week of December, and
2. Quest Diagnostics (DGX) moving their normal January dividend payment into the first week of February

These events allowed December totals to reach record heights, and will boost February totals when I report next month, but January was left feeling a bit abandoned.

Monthly YoY growth was limited to 7.96% (well short of my target goal of 15%) when comparing this January’s dividend total to the $792.74 from January 2020.  My YoY growth would have been 16.4% had the NKE and DGX dividends been paid this month.

A total of 17 companies paid me a dividend in January… with 1 of them delivering a triple-digit dividend amount.

Pepsico (PEP) was my top dividend payer this month, sending me $111.21.  While PEP recently fell out of my top 10 Portfolio positions, it continues to make outstanding dividend payments to me.  That’s the beauty of dividend growth investing… those dividend payments are much steadier than the stock price.

I did have another pair of dividend payers crack the $90 mark in January.  Altria Group (MO) paid me $99.86 (just shy of the triple-digit mark this time around), but it should cross $100 with April’s dividend payment.  Meanwhile, RPM International (RPM) rang my register with a dividend of $92.73.  I’m hoping that my RPM dividend payment reaches triple-digits by year’s end after reinvesting dividends throughout the year, and announcing a Q4 dividend raise.

My smallest January dividend, $3.25, came from Merck & Co. (MRK) – a fairly new position in my Portfolio.  I’ve made 3 buys of MRK in the past several weeks, but only the first purchase was prior to the last ex-dividend date.  Thus, expect to see this payment jump a bit in April.

The increased dividend amounts from Cisco Systems (CSCO) 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 YoY dividend gain from PEP was over $10, and all organic (combination of dividend raises and dividend reinvestment).  Altria Group (MO) fell just shy of reaching that $10 YoY gain threshold.

I recorded 2 dividend payout reductions in January.  The reductions came from W.P. Carey (WPC) and Realty Income (O), and both were due to my trimming of my REITs over the past year.

On the brighter side, I had 3 new dividend payers this year compared to last January.  These were Automatic Data Processing (ADP), Sysco (SYY) and MRK.  ADP debuted at the highest level thanks to several purchases I made over the past year in my effort to build out the position.

Lastly, I had 2 stocks that no longer paid me a dividend this January.  These were NKE and DGX, which as previously mentioned, resulted from each moving their most recent dividend payment out of January.

As usual, I reinvested all dividends into the stocks that paid them, resulting in an additional forward dividend income boost of $31.67.  The year is off to a good start here, as I easily surpassed the $25 target I have on a monthly basis.

As a result of the reinvested dividends, I purchased over 13.3 shares of stock in January.  This includes over 2 full shares of MO, and over 1 full share of the following stocks: RPM, Air Lease (AL), Gentex (GNTX) and Iron Mountain (IRM).

 

Dividend Raises

This month I notched exactly 5 dividend raises for the 3rd month in a row… rather strange, but quite acceptable.  🙂

Even better than receiving 5 raises was the fact that the smallest raise percentage was 8.7%.  The remaining 4 raises were all double-digits!

One January raise I was expecting but didn’t get was that from Realty Income (O).  The company usually has 5 raises during the year, with the largest of that group coming in January.  Unfortunately, the January raise never materialized, and O only announced a continuation of the existing dividend.  We’ll see if they end up skipping this biggest dividend raise altogether, or manage to deliver it at a later date.

Thankfully, once the January raises started, they came in hot and heavy.  The month started off with a 12.0% raise announcement from Fastenal (FAST).  This raise came on the heels of last month’s special dividend, so it was a terrific one-two punch.

This was followed a couple days later with an impressive 13.77% raise from BlackRock (BLK).  This surpassed last year’s 10% raise and was a bit better than their average over the past decade.

The last 3 raises of the month all arrived on the same day late in the month.  This trio of raises started with my biggest raise of the month… a massive 25% raise from Nexstar Media Group (NXST).  This NXST raise bested last year’s 24.44% raise, and was on par with the company’s average over the past 7 years.

The 8.7% raise from CMCSA was announced next.  This high single-digit raise is a slight slowdown for CMCSA, but still terrific.  It’s hard to feel sad about your lowest raise of the month when it’s 8.7%!

The final raise of the trio belonged to Air Products & Chemicals (APD), at 11.94%.  While this didn’t match the 15.52% raise from last year, it’s still ahead of their average over the past 10 years… and it’s double-digits!

 

 

These 5 dividend raises increased my forward dividend income by an outstanding $180.77.  Each raise contributed at least $13 to my forward dividend income, with the one from NXST boosting forward dividend income by nearly $60.  The BLK raise nearly contributed $50, too.  What a month for raises!

I’d have to invest $7,378.37 at my Portfolio’s current average yield of 2.45% in order to receive the same boost to my forward dividend income as this month’s raises.  Whoa!

Looking ahead to February, I expect another handful of raises again, before things cool down a bit in March.  I hope to hear at least 5 dividend raise announcements.  These include ones from Quest Diagnostics (DGX) during their earnings release, 3M Co. (MMM), Gilead Sciences (GILD), T. Rowe Price (TROW) and CSCO.  One from Pepsico (PEP) is a possibility, too.

 

Dividends Due To New Investment

I made 6 transactions in January… in two groups of 3.

The first group was a group of 3 small purchases, resulting in a net investment.  The second group was mostly a re-allocation, where I trimmed one of my holdings and invested the sale proceeds into one existing Portfolio stock, and one new Portfolio stock.

With the lone sale, I began the process of decreasing my Industrials weighting a bit.  This was one of my goals for 2021.

One stock, MRK, was added to twice.  The new stock added to my Portfolio was Lockheed Martin (LMT).

The details for all my January transactions can be found in the following posts…

 

Recent Buy – MRK, MSFT & O

Recent Transactions – AL, MRK, LMT

 

The result of all the transactions was a net investment of $995.73.  In addition, my forward dividend climbed by $85.31.

With the introduction of LMT to my Portfolio, my number of holdings rose to 51.

 

Tallying Up The Additional Forward Dividend Income

In 2021, I’ll continue tracking my additional forward dividend income generated each month from the trifecta of sources: reinvested dividends, dividend raises, and new capital investment.

I show 2020’s totals, too, so that we can compare as the year progresses.  I’m optimistic that I can do better in 2021 after some unexpected dividend setbacks in 2020 (fallout from the pandemic).

 

 

Despite a stellar month for additional forward dividend income, I came up a bit short compared to last January – $297.75 vs. $330.60.  That says more about how awesome last January was rather than this January being a disappointment.

Compared to last year, Reinvested Dividends and Dividend Raises posted better totals this year.  It was in Investment of Capital that I didn’t quite measure up.

The $180.77 from Dividend Raises was better than any month in a long time, and my 2nd best amount ever.  The total trailed only the $239.74 I recorded in Feb. 2018.

Dividend Raises paced all categories for the 4th month in a row.  How’s that for passive income!

My additional forward dividend income goal for 2021 was set at $1,764.  To attain this, year-end target numbers for each category in 2021 are roughly:

• Reinvested Dividends – $400
• Dividend Raises – $964
• Investment of Capital – $400

As long as the sum of all 3 categories hits $1,764 by year’s end I’ll be thrilled.

 

Progress Charts

The following are progress charts, also available on my Dividends page.  Olive green bars will reflect monthly totals in 2021.  I’m off to a great start in January… more YoY dividend growth!

 

 

On an annual basis, here’s what the dividend totals look like.  Reaching new heights in 2021 looks daunting only one month in.  However, I’m so confident I’ll surpass 2020 totals in 2021 that I took the liberty of adjusting the upper end of the y-axis scale from $12K to $14K to give myself some headroom.  🙂

 

 

Summary

I’m off to a great start in 2021.  Solid dividend income and excellent forward dividend income additions have set the tone for the new year.

In January, I collected nearly $856 in dividends from 17 dividend payers.  However, a pair of moving dividend payments stunted January’s YoY dividend growth to ~8%.

Forward dividend income due to reinvested dividends crossed the $30 level… approaching $32.

For the 3rd straight month I recorded 5 dividend raises.  The best part about the raises were their strong percentage increases.  They ranged from 8.7% to 25.0%, with 4 of the 5 being double-digit raises.  Forward dividend income was boosted by almost $181.  What a month for raises!

On the transaction front, I made a trio of transactions twice during the month – so 6 total transactions.  These resulted in a net investment of almost $1K and a forward dividend income bump of over $85.  One of my purchases brought a new Portfolio stock, LMT, into the fold.

Tallying up the January contributions from all categories, I saw nearly $298 in additional forward dividend income.  If only I could manage this every month, what a year I’d have.

 

Did you begin 2021 on a good note with regard to dividends?  Did you find dividend raises to be rather generous this month?  Please share in the Comments!

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