With each month of dividend income I receive I get that much closer to my goal of living off dividends. There isn’t record income to celebrate each month, but each month is necessary to reach my ultimate goal… a Portfolio that provides enough dividend income to cover my expenses.
So while each month isn’t exciting in itself, it’s exciting to me in that I know it brings me closer to where I want to be. The month of May was no exception.
Here’s a preview of my dividend income post this month…
I bested $1.2K in dividends again this month (a monthly minimum I’m targeting in 2023)… in fact the total was north of $1.3K in May, but how high did it get? Stick around to find out.
In May, I blew right past my Year-over-Year (YoY) growth target of 15%… topping 20%. Any chance I reached 25%. We’ll see!
Another monthly target I have is for additional forward dividend income resulting from my reinvested dividends. I want to exceed $35 each month, and I did that in May… with good margin no less.
Sadly, dividend raises continue to disappoint in 2023. My additional forward dividend income from dividend raises came in with its lowest total of the year.
I didn’t invest much into my Portfolio during May either. Thus, additional forward dividend income generated from investment of capital was minimal, especially considering one stock I invested in has a suspended dividend.
For the first time all year, the forward dividend income contributions from all 3 of my sources (reinvested dividends, dividend raises, and investment of capital) failed to reach a triple-digit total. I’ll have to put an end to that next month or risk falling way off the pace I need to reach my annual goal.
I’ve updated my monthly and annual dividend income progress charts, too.
Let’s dive into the details of this month’s dividend income report, beginning with my dividend income…
Dividend Income
My Portfolio raked in $1,374.97 of monthly dividend income in May. This easily surpassed the $1,109.95 posted in May of last year.
This translated to YoY dividend growth of 23.88%, a 2nd straight month of eclipsing 20%, and handily exceeding my 15% monthly target.
A total of 18 companies paid me a dividend in May. I have my fewest number of dividend payers in the middle month of each quarter. On a bright note, all but 5 of the dividend payers provided $50 or more, with 6 of those stocks delivering triple-digit dividends.
My largest dividend in May was paid by AbbVie (ABBV). It was a $203.84 dividend, standing out amongst the rest. The newest dividend to top $100 came from Verizon Communications (VZ), at $100.63.
On the smaller end of the dividend payments was a $16.84 dividend from Accenture (ACN). I haven’t owned ACN for very long, so it’s no surprise its dividend is smaller than other Portfolio holdings. Monthly payer Realty Income (O) delivered my next smallest dividend at $22.07.
The increased dividend amounts from VZ, Caterpillar (CAT) & National Retail Properties (NNN) were each helped by one or more purchases over the past year.
Increased YoY amounts for all other companies were a result of dividend increases and reinvested dividends over the past year. I added more than $51 in YoY dividend gains from Nexstar Media Group (NXST) and $26 from Lowe’s Companies (LOW) primarily thanks to their stellar dividend raises over the past year. I also added in excess of $16 from ABBV, and north of $15 from Fastental (FAST).
Of the stocks that paid me both last year and this year, only one showed a payout reduction. This stock was General Dynamics (GD) and it was due to my trim of GD in Q4 of last year.
There also was only one new dividend payer in May. This stock was ACN, which debuted with the aforementioned dividend of $16.84.
When it comes to stocks no longer paying me a dividend in May, I didn’t have any. Having no dividend income reduction to overcome due to fewer dividend payers certainly contributed to my good YoY dividend growth this May.
As is typically the case, all my dividends got automatically reinvested into the stocks that paid them. The additional forward dividend income boost that resulted from the dividend reinvestments was $46.35. This easily surpassed the $35 monthly target I have. ABBV, VZ and NXST provided most of the reinvestment boost, as each reinvestment contributed more than $5 of additional forward dividend income. Another 2 companies added over $3 each, and yet another 4 companies added over $2 each.
As a result of May’s reinvested dividends, I purchased close to 15 new shares of stock. This included over 2 shares of VZ and FAST, and over 1 share of ABBV. I was close to obtaining 1 share of NXST, CVS Health (CVS) and Main Street Capital (MAIN) through DRiP, too.
Dividend Raises
What a disappointing month it was for dividend raises. While I did hear raise announcements from 4 of my holdings, none of the raises reached 5%. That hasn’t happened in 3 years, and that time was due to extraordinary financial concerns a couple of months into the pandemic.
My first raise announcement in May was a little unexpected. I wasn’t certain at all about a raise from Main Street Capital (MAIN). Yet, the company announced a 2.22% dividend hike, in addition to a supplemental dividend to be paid in June. The previous dividend raise from MAIN was announced 6 months ago (last November).
Raising much less than expected was Medtronic (MDT). The company only provided a 1.47% raise, well short of last year’s 7.93% boost.
After foregoing a quarterly dividend raise last quarter, American Tower (AMT) did hike its dividend this time around. However, it didn’t even amount to 1%, instead coming in at 0.64%.
With only one stock left expected to announce a dividend raise in May, I was hoping Lowe’s Companies (LOW) might salvage my month with a big boost. While it was my biggest raise of the month, it only amounted to a 4.76% increase. This was noticeably short of last year’s 31.25% hike. However, this smaller boost still provided over 60% of my additional forward dividend income when factoring in all the month’s raises.
I thought there was a chance to hear of a dividend raise from Union Pacific (UNP) in May, since it was the 1-year mark since their last hike, but it didn’t come to fruition. I guess we can consider it a dividend freeze. This isn’t the first time UNP has chosen to forego a dividend raise after 1 year.
Accounting for all the dividend raises in May, my forward dividend income increased by $32.53. This was a significant step down compared to the same month last year ($138.14), and it didn’t keep up with the dividend raises from last month either ($45.86).
I’d have to invest $1,102.71 at my Portfolio’s current yield of 2.95% in order to receive the same boost to my forward dividend income as this month’s raises.
Looking ahead to June, another light month for dividend raises is on deck. I expect to hear raise announcements from Caterpillar (CAT) and UnitedHealth Group (UNH), in addition to obtaining a token quarterly raise from Realty Income (O).
Dividends Due To New Investment
Portfolio transactions remained few and far between in May. I did manage a pair of buys though, one at the beginning of the month and one at the end.
Both buys were of existing positions. I added to one of my semiconductor holdings in the Information Technology sector, and I added to a Communication Services holding for the first time since I initiated my position 3 years ago.
Details for both of the purchases can be found in the following pair of posts…
The two buys resulted in an investment of $950.91 into my Portfolio. However, my forward dividend income only increased by a total of $12.40, with DIS not contributing to the total due to the company currently having a suspended dividend.
With both stocks being existing holdings, the number of stocks in my Portfolio held steady at 60.
Tallying Up The Additional Forward Dividend Income
In 2023, 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 show 2022 totals as well, so that we can compare as the year progresses.
Unfortunately, I posted my worst month of the year when it came to additional forward dividend income. I failed to reach $100 total for the first time in 2023. Hopefully, it will be the last month like that, too.
I totaled $91.28 of additional forward dividend income in May when accounting for all the sources. This was less than half of what I recorded in May of 2022. It also failed to live up to the total from April, falling about $20 shy.
I’ve slightly fallen off the pace from last year in terms of additional forward dividend income from all sources. While 2023’s Reinvested Dividends and Investment of Capital are currently outperforming last year’s results, Dividend Raises are significantly lacking.
I suspect I’ll fall further off the pace unless dividend raises pick up soon. I’m not optimistic about that. It’s going to take a while before companies feel confident enough to commit the extra cash to shareholders again.
Progress Charts
The following are progress charts, also available on my Dividends page.
May showed nice YoY progress… something I hope continues for the remaining months of 2023.
On an annual basis, here’s what the dividend totals look like.
The $6,908.90 that I’ve collected in 5 months of 2023 is more than the entire amount I collected in 2017.
Summary
May’s dividend results might not have been exciting on their own, but they brought me another step closer to living off my dividends. So for that, it was another good month.
I collected nearly $1,375 in dividends from 18 dividend payers. The YoY gain nearly reached 24%, likely to be one of my better monthly percentages for the year.
ABBV provided close to $204 of May’s dividend total, but there were 5 additional triple-digit payers, too. Also, the majority of my dividend payments topped $50. So, needless to say, there were terrific contributions from many of my stocks this month.
Reinvested dividends generated over $46 of additional forward dividend income. This led to almost 15 new shares being dripped.
Dividend Raises contributed $32 to my additional forward dividend income… my 2nd worst tally of the year in the category. All 4 of the dividend hikes were less than 5%. Raises have been muted in 2023, and it doesn’t appear it will be getting better anytime soon.
I managed two Portfolio transactions in May, duplicating the number I had in April. Both transactions were buys – SWKS & DIS. I invested nearly $951, but only added $12.40 in additional forward dividend income since DIS currently has a suspended dividend.
Tallying the contributions from all sources, I topped $91 in additional forward dividend income in May. This fell short of the triple-digit level I target on a monthly basis.
As for my Portfolio’s annual forward dividend income, I finished the month with a total of $17,336.47 (or an average of $1,444.71/month).
Have you noticed a drop in the dividend raise percentages in 2023? Have you found any of the hikes to be particularly disappointing? Please share in the Comments!
I have updated the Portfolio & Dividends pages in conjunction with this monthly update.