When I was a youngster partaking in the tradition of trick-or-treating on Halloween, we would always dare each other to say the following elaborated version of the common “Trick or Treat” when arriving at a door:
Trick or treat, smell my feet, give me something good to eat.
As we look back on the month of October, I think Mr. Market had a few tricks as well as a few treats and there were even a few days that felt about as bad as having to smell someone’s feet.
October 2018 Dividend Income Summary
Coupled with the shenanigans from Mr. Market, we also have the opening month of the quarter and for many that means a relatively quiet month from a dividend perspective.
I mention that because when prices are on the decline, your dividends will purchase a larger portion of shares when reinvested–so having a slow month on the dividend front means there aren’t as many dollars being reinvested at depressed prices.
So just how spooky was the month of October?
Before sharing the total, I will remind you that beginning with last month’s dividend income report I began including the dividends from the index funds in my retirement accounts. In addition, I shuffled some of those accounts around recently and that has had an immediate impact on this month’s total.
The month of October has brought in an impressive $1,388.59 in total dividends!
That actually surpassed my total from last month–which was a quarter ending month–and sets a new overall record.
As you will see below, this total is driven by my retirement accounts and I will admit that I am still a little torn on including these dividends because I haven’t reflected those accounts in my spreadsheet or projected annual dividend income. I’m still giving this some thought, but here is the current breakdown:
- DGI Portfolio: $273.32
- Retirement Accounts: $1,115.27
Let’s examine where all of these dividends came from:
One of the challenges with this being my first year of having a dedicated DGI portfolio and tracking dividends in general is the inability to truly track YoY growth.
Therefore, to give some context, comparing this month to the prior quarter opening month I see that I’ve had 151.32% quarter-over-quarter growth. The bulk of that increase is from the REITs that are now hitting my account, with a small offset from the fact that Disney does not pay quarterly.
One bright spot was the Altria ($MO) dividend more than doubling since the last quarter. That increase is a combination of additional purchases that were made plus their increased dividend.
Overall, the reinvested dividends have added an additional $5.42 in projected annual dividend income.
That number would have been higher had I not made a mistake with my REIT holdings, as those dividends were not reinvested this month. When making the purchases, I assumed that they had inherited my account preference to reinvest the dividends but unfortunately they had not. As soon as I realized the mistake, I updated the account but per Fidelity guidelines I had missed the cut-off time to make the change and have it be effective for these payouts.
That has since been resolved so all of those dividends will be reinvested moving forward.
October 2018 Purchases
While September had been quiet from a purchase perspective, October presented plenty of buying opportunities and therefore I was able to add a total of $7,870.60 in new capital to the portfolio!
As a quick recap of the October purchases:
In hindsight, I should have been a bit more patient with my purchase of Snap-on as the price got hammered down quite a bit more from where I made my two purchases. However, my two purchases totaling 20 shares have added $65.50 in PADI.
Meanwhile, the other purchases include:
- Genuine Parts Company :: 10 shares @ $94.80 that adds $28.80 in PADI
- Home Depot :: 5 shares @ $182.50 that adds $20.60 in PADI
- BlackRock :: 5 shares @ $396.00 that adds $62.60 in PADI
The last purchase that is not represented above is my automated deposit of $525.00 into my Vanguard account that went towards purchasing an additional 7 shares of VYM @ $83.20/share. That purchase adds $17.85 in PADI based on the most recent dividend.
In total, these new purchases have boosted my projected annual dividend income by $195.45 and helped push me over that $5,000 milestone.
For the amount of capital being deployed, I would have liked to see the PADI increase by more however most of these purchases were in companies that have a yield quite a bit lower than my portfolio’s average yield (but generally have higher growth rates).
October 2018 Dividend Raises
The month of October brought only one dividend raise, but that is not a huge surprise as most of the companies in my portfolio announced raises earlier in the year.
The one raise was a modest 4.0% increase from Iron Mountain as highlighted below:
This single increase has added $7.71 in projected annual dividend income. While that is not an earth-shattering increase, every dollar counts and each of these dollars are now working for me to earn more money moving forward.
Looking forward, I am not expecting much in November with Snap-on being one of the few companies that typically declare their dividend increase during the 11th month. They have given solid, double-digit increases the last few years so I am hoping for at least 15% this year and should know within the next week or so.
While the month of October brought a good deal of volatility, it also presented a number of great buying opportunities as well. While I would have liked to time some of them a little better, over the long-term that should be but a blip on the radar.
Including my retirement account dividends, I’ve set another record having surpassed last month’s quarter ending record.
Through the three legs of the dividend tripod, I was able to add $208.58 in PADI during the month of October. I’m going to need strong performance from each of the three legs over the remaining two months to meet my revised goal of $5,500 in projected annual dividend income, but I am up for the challenge.
The $13.13 in forward income from the reinvested dividends and dividend raises might not seem like a lot, but that would have required approximately $400.00 in new capital at my current 3.28% average dividend yield.
The dividends received in October have moved me closer to my annual goal of receiving $2,500 in dividend payments during this inaugural year of my dividend portfolio. My total of $1,821.16 leaves me $678.84 short of my goal with two months to go.
While I will not have a lot of wiggle room, I am confident that my projections for November and December will push me past my goal.
Looking solely at my DGI portfolio, the opening month of the quarter continues to be my quietest month but the gap is narrowing. The addition of FUSVX in my retirement account certainly gave a huge boost this month, although that fund’s payout is not on a standard quarterly cycle.
There was a great deal of capital added to the portfolio in October, although it was added to lower yielding stocks that have historically demonstrated much higher growth in their dividend. Hopefully Snap-on comes through with a healthy raise in November and continues that trend, but time will tell.
Overall, despite the volatility in the market, I am pleased with the results from October across the board.
How did you fare in October? Did you get a trick or a treat?