Dividend Income Report :: September 2018

The crisp fall weather is starting to roll in and both the NCAA and NFL football seasons have begun–I love this time of year!

To top things off we also have a quarter-ending month for our dividend portfolios, which for most in the DGI community tends to be their strongest months. I’m a bit of an outlier there as my mid-quarter month is my strongest when looking solely at my new DGI portfolio.

Which brings me to another point–moving forward, I will be including the dividends from my retirement accounts in the monthly dividend income report despite not referencing the index funds in the DGI portfolio.

With the addition of my self-made mini-REIT ETF being in an IRA, I have expanded the DGI portfolio beyond just the taxable account and therefore I thought it would be fitting to look at the full picture.

September 2018 Dividend Income Summary

When I shared the last quarter-ending dividend income report, there were 9 stocks that were not included in the report because I had purchased after the ex-dividend date.

I’m happy to report that those stocks are now included and that has helped boost up my results.

The month of September has brought in a staggering $1,386.02 in total dividends!

As I mentioned, this total now includes my focused DGI portfolio as well as the dividend payments received from the index funds in some of my retirement accounts. I’ll specify that in the table below as well, and will highlight the source of those payments here:

• DGI Portfolio: $380.13
• Retirement Accounts: $1,005.89

Looking purely at the DGI portfolio, you will see that the total here is lower than my August dividend income report and based on forward income projections the mid-quarter month continues to be the best from a DGI perspective.

Let’s examine where all of these dividends came from:

Ticker	September 2018	September 2017
AFL	11.70	0.00
CMI	34.20	0.00
EAT	17.23	0.00
HD	10.35	0.00
JNJ	14.45	0.00
K	8.47	0.00
MDP	22.03	0.00
MMM	13.60	0.00
MSFT	8.40	0.00
NEE	5.59	0.00
O	6.85	0.00
PEP	18.71	0.00
PRU	22.50	0.00
SBSI	18.00	0.00
SNA	4.10	0.00
TGT	4.48	0.00
VFIAX (R)	235.85	226.08
VTSAX	63.29	0.00
VTSAX (R)	770.04	558.72
VYM	79.78	0.00
XOM	16.40	0.00
Total	1,386.02	784.80
YoY Growth	76.61%

The 76% YoY growth is extremely encouraging particularly when considering the two retirement funds, VTSAX and VFIAX, do not have new capital being added and that growth is purely from the power of dividends. That growth alone was a robust 29% and then all of the new DGI holdings that did not exist in 2017 brings me even farther up.

It is encouraging to see that my Johnson & Johnson dividend more than doubled since June due to additional purchases, and the multiple purchases of Cummins has resulted in a nice payout as well.

Last but not least, we will see another boost to the quarter-ending months once all of the REITs that were recently purchased begin to payout. There are 5 REIT holdings that will payout in September that aren’t included here.

With the DGI dividends being reinvested (exception being VTSAX due to preparation for a portfolio change in my taxable account) the portfolio added an additional $9.87 in forward dividend income.

September 2018 Purchases

Other than my flurry of activity in establishing my own REIT ETF, September was fairly quiet in terms of purchases. This was due to the lack of buying opportunities across my current holdings resulting in a dip down to $1,771.20 in new capital being added.

As a quick recap of the September purchases:

The two purchases of Cracker Barrel added 12 shares to my portfolio at an average price of $147.60/share. These 12 shares will add an additional $60.00 in forward dividend income.

As the REIT purchases were made as a result of my pension rollover, I have not counted that as new capital being added–but it did allow me to add over $17,000 in purchases shown here:

Having the good fortune to receive this pension rollover, I was able to add an additional $1,077.60 in forward dividend income.

That provided a super-charged boost to my portfolio, which now stands at $4,809.00 in forward dividend income.

There is definitely risk in having such a significant portion of my dividends coming from the REIT sector; however, as I largely will not be adding funds to that rollover moving forward, I expect this to balance out over time.

September 2018 Dividend Raises

There were four dividend raises that I received in September, which is a decent number considering that many of my holdings announced raises earlier in the year before I established my portfolio.

Unfortunately there were not any double-digit surprises this month as all four increases were in the single-digits.

However, as the great guys over at Dividend Diplomats always say, every dollar counts!

Realty Income typically has minuscule raises given that they tend to raise multiple times throughout the year, and Verizon remained steady with their standard ~2% raise.

On the bright side, both Microsoft and OGE Energy Corp. announced raises just shy of 10% each.

The four dividend raises combined have added an additional $11.83 in forward dividend income. While that isn’t as nice as the $26.57 received from Altria alone last month, it surpasses the amount added from reinvested dividends–and emphasizes the importance of the three legs of the DGI tripod: dividend reinvestment, new capital, and dividend raises!

Lastly, there were some raises announced of new holdings, such as W.P. Carey, that were made just ahead of my purchases. While I haven’t recorded those raises, I will definitely reap the rewards as they begin to pay out.

Summary

By combining the dividends received from the index funds in my retirement accounts with my DGI portfolio, I sailed right by the $1,000 mark and set an overall new record. Taking a look at just my DGI portfolio alone, the results in September trail what I received in August but is still a great number on it’s own.

The addition of the REITs to my portfolio has increased the overall portfolio yield, which now stands at a healthy 3.15% as of the end of September–up from 2.75% last month.

The above table details that there was $9.87 in forward income from dividend reinvestment and $11.83 from dividend raises for a grand total of $21.70 in forward income that required no effort on my part.

I would have had to invest an additional $688.31 in new capital at my average portfolio yield to equal that amount of forward income. Talk about motivation!

Note: Due to rounding of numbers in my spreadsheet, the calculations above aren’t exact but are close enough for my purposes.

The September dividends have pushed me closer to my 2018 goal and I am now less than $1,000 away from reaching my target.

With the addition of the REITs this past month and the payouts beginning to roll in here in October, I am confident that I will reach the goal but there is little margin of safety. To mitigate that, I am continuing to add new capital and am hopeful that the market will provide some attractive prices to make more purchases over the last quarter.

The opening month of the new quarter is definitely my quietest month. However, by continuing to add new capital and reinvest my dividends, I am looking forward to a nice increase compared to June.

With the holistic view of my dividends, I am ecstatic with the results in September but even more so by what the future holds!

How was your month of September?