Expected Dividend Increases for July 2020

As I'm writing this post, June is a day away from ending, which means the year will soon be half over. The speed with which time is passing never ceases to amaze me!

And for the sake of this post, I'll be recapping key dividend announcements during the month of June and looking ahead to the sole dividend increase that I'm expecting during July.

Actual June Dividend Announcements

Dividend Increase #1: Realty Income (O)

As I expected in my previous post in this series, Realty Income (O) came through once again when it announced a 0.2% increase in its monthly dividend, boosting its dividend from $0.2330/share to $0.2335 share.

In a difficult operating environment such as the one we currently find ourselves in, it's reassuring to know that I own plenty of high-quality dividend paying stocks, such as O.

Across the 7 shares of O that I own, my annual forward dividend income was boosted by $0.042 as a result of O's dividend announcement.

Dividend Increase #2: W.P. Carey (WPC)

Just as O came through with a dividend increase as I expected, W.P. Carey (WPC) announced a 0.2% increase in its quarterly dividend, upping its dividend from $1.040/share to $1.042/share.

Across the 5 shares of WPC in my portfolio, my annual forward dividend income increased by $0.040 as a result of WPC's dividend announcement.

Dividend Increase #3: UnitedHealth Group (UNH)

As a result of not owning UnitedHealth Group (UNH) when it announced its dividend increase last June, I forgot to include my expectation for UNH's dividend increase in the previous post of the series.

Boy, was that quite the omission on my part, as UNH announced a 15.7% increase in its quarterly dividend, taking it from $1.08/share to $1.25/share.

UNH once again delivered a strong dividend increase, which is always appreciated, especially in this environment!

Across my single share of UNH, my annual forward dividend income was boosted by $0.68.

Dividend Cut: Simon Property Group (SPG)

Simon Property Group (SPG) announced a while back that it would be announcing its dividend later than usual toward the end of this month.

It was just today that SPG announced a 38.1% cut to its quarterly dividend, decreasing it from $2.10/share to $1.30/share.

While it is disappointing to see SPG announce a dividend cut considering it is one of my 10 largest positions in terms of dividend income, I don't blame SPG for temporarily cutting its dividend just to err on the side of caution. I fully expect that within the next year, SPG's dividend will be restored to its previous level.

Across my 6 shares of SPG, my annual forward dividend income decreased by $19.20.

Expected Dividend Announcements for July

Dividend Increase: JM Smucker (SJM)

Given the uncertain operating environment, I am expecting JM Smucker (SJM) to announce a smaller dividend increase than usual, which I believe will be a 2.3% increase in its quarterly dividend, from $0.88/share to $0.90/share.

If this occurs, my annual forward dividend income would be boosted by $0.16 across my 2 shares of SJM.

Concluding Thoughts:

Even though my dividend income stemming from dividend announcements declined by $18.438 during the month of June and my dividend income has now fallen by roughly 6% after the SPG cut and previous cuts/SKT's dividend suspension, I am confident that 2021 will usher in a return to growth and dividends will then quickly be restored to previous levels.

Discussion:

Did your portfolio experience any dividend cuts during June?

Are you expecting any dividend cuts down the road?

As always, thanks for reading and I welcome your comments in the comment section below.

The Remarkable Benefits of Remote Work

As I'm writing this blog post, today is the 90th day or 3 month mark of when I began working remotely.

I recently returned to work in a traditional capacity 3 days a week and have been remotely working the other 2 days a week.

Over the past 3 months, I have benefited significantly in a number of ways as a result of being able to work remotely, which I'll delve into below.

Image Source: Pexels

Extra Sleep

For someone that really needs their 7-8 hours of sleep each night to most efficiently function during the day, I am so grateful for this opportunity to work remotely because I save a significant amount of time in the morning not having to get ready for work in the traditional sense.

Before I go into work each morning, I take care of personal care tasks, including brushing my teeth, showering, and combing my hair.

While I still brush my teeth two to three times a day, I am able to defer showering and combing my hair into the evening when I have more time, and don't have to rush as much with getting ready in the morning when I am working remotely.

As I'm sure most of us can attest, it can become tiring to also commute to traditional work, which leads me into my next point.

Extra Time And Improved Health

While I'm lucky in the sense that my 24 minute round trip commute to work is far less than the national average 26 minute one-way commute time, a 24 minute round trip commute 5 days a week is still 2 hours a week or about 1.3% of the total hours in a week (and much more of my waking hours when factoring in sleep).

Over the past 3 months (factoring in the 9 days that I have went to work over the past 3 months), I have saved about 1,320 minutes or nearly an entire day that I would have otherwise spent commuting.

This is time that I have spent engaging in more fulfilling activities, such as writing blog posts, exercising, spending time with family, and researching investment opportunities.

The other major benefit from a health standpoint, is that I don't have to deal with overly cautious drivers in front of me going 10 mph under the speed limit in ideal driving conditions while I'm on my way to work or maniacs behind me wanting to go 10 mph or more over the speed limit while I'm on my way home from work.

In support of this observation, a study of 33,000 UK drivers found a link between commute times and mental health. The longer and more frequent commutes that workers make to arrive at their jobs results in an increased risk of depression and work-related stress.

Extra Money

And aside from the extra sleep, time, and improved health, I have also saved about $66 over the past 3 months in fuel expenses (825 miles/25 mpg, assuming $2/gallon gas).

While that isn't necessarily a lot, my typical monthly fuel expenses are about $30/month at $2/gallon gasoline, so my fuel expenses have been cut by roughly 70% over the past 3 months.

Concluding Thoughts:

It has been a blessing to have the privilege of working from home more often than not over the past 3 months. The benefits of extra sleep, improved health, and extra money leave me hoping that I am able to at least work remotely 1 day a week indefinitely.

Discussion:

Have you had the privilege of working remotely over the past 3 months?

If so, have you observed the benefits that I discussed above or any other benefits? If not, would you prefer to work remotely?

Life Isn't About Money As Much As Freedom And Fulfillment

From time to time, I reminisce about the past as most of us do.

Recently, I recalled being a kid in middle school and stumbling upon the concepts of dividend investing, as well as building long-term, generational wealth through Joshua Kennon on About.com.

When I first came upon the concepts, I was misguided as you would expect a middle school kid to be in that I wanted to build obscene wealth during my lifetime that would put me among the Forbes billionaires just for the sake of being obscenely rich and giving into consumerism.

I would continue to possess this mindset of striving for obscene wealth for no serious reason (though, perhaps my reason in the back of my mind was the freedom aspect that I'll delve into) until I began high school.

Around the time of high school about a year later, I began reading Joshua Kennon's personal blog, Jason Fieber's Dividend Mantra blog (and as of a few years ago, his MrFreeat33 blog), and Tim McAleenan Jr.'s The Conservative Income Investor blog.

It was really upon reading those blogs, and especially Jason's blogs that I began to think about more than just the scoreboard aspect of money and more deeply about the aspect of money that is the most powerful, which is the fact that one of the things that money is capable of buying is freedom over one's time to choose what they'd like to pursue.

I'll Take Freedom And Frugality Any Day Over Excessive, Meaningless Wealth

As part of my foolish thinking in my early teen years, I envisioned that I would own my own exclusive and luxurious private island somewhere in the Caribbean in my later years. How I thought at the time that purchase would be able to allow me to live a fulfilling and happy life is beyond me to this very day.

I suppose that would be a reflection of the consumerist culture we live in and the fact that by the time an American teenager reaches age 18, they have seen approximately 350,000 advertisements, according to the University of Washington, which all seem to promise happiness and fulfillment designed to encourage consumerism.

As I read about dividend growth investing and the ability for average wage earners to achieve financial independence at a relatively early age by spending purposefully and investing aggressively in high-quality dividend stocks, a light bulb went off in my head that I could be one of those people to achieve financial independence and pursue my passions rather than having to work a job just for the sake of paying bills.

Even though I don't have all of the details of what my post-FI life would look like at this time, I know that I wouldn't mind having more time to exercise, watch sports, blog more, write more for Seeking Alpha, and spend time with family. I often find that weekends go by too fast and I am unable to do all that I would like to do.

I came to the realization that rather than simply working at a job I may not be fulfilled at for the sake of acquiring wealth beyond what I would even be able to reasonably spend as a naturally frugal person, I would be happier by achieving financial independence to enable myself to pursue the interests and activities that enhance my quality of life.

While obscene amounts of wealth aren't necessarily a bad thing (and one can actually create even more significant wealth by being FI and leveraging their enthusiasm for their passion to produce valuable goods or services for society), I came to the realization years ago that beyond the basics of food/an abundant source of clean water, housing in a reasonably safe area, quality healthcare, and taxes being covered, nothing else is needed to fulfill the two rungs of Maslow's Hierarchy of Needs, which cover physiological needs and safety needs.

Simply by having the financial means to passively provide the basics in life and a bit of money for discretionary spending, you are living better than the vast majority of the world, which lives in fear of possibly losing their job and being unable to provide for themselves and their family's basic needs.

It is from that point, one is able to focus solely on building stronger relationships and connections with others to meet their psychological needs and to focus on their passions to give themselves a sense of accomplishment and eventually, self-actualization.

When someone is getting ready for a job, working a job, and decompressing after a job, they lose much of their time that they could otherwise be focusing on working toward self-actualization, which is necessary to live a happy and productive life.

Concluding Thoughts:

Money is a tool and just as it can be used for bad purposes that prevent one from living a fulfilling and happy life (one purpose of which, is unchecked consumerism), money can be used as a tool to improve one's friendships and connections, and to pursue passions in a manner that would otherwise be difficult when working full-time at a job that may be unfulfilling.

It took me until high school to come to this realization, but I'm glad I did because I believe it will ultimately help me to live a more purposeful and fulfilling life.

Discussion:

Did you have any excessive consumerist thoughts that were guided by a society of consumerism as a teen? If so, what were they?

Since you're on this blog, I'm assuming that you have probably since changed your beliefs on consumerism and have adapted a more mindful approach to spending.

If that's the case, what made you change your beliefs and adopt frugality as a way of life?

As always, I appreciate your readership and look forward to reading the comments that you are free to leave in the comment section below.

May 2020 Dividend Stock Purchases

As I'm writing this blog post on June 6th, the NBA is set to resume its season at the end of July and the NBA Finals are expected to conclude sometime in mid-October.

After over 12 weeks of no NBA basketball and the Bucks' potential championship run being on hold, I am excited for the end of July to see what this team can accomplish in this season of unprecedented challenges.

With that exciting announcement out of the way, I'll be discussing the investment activity within my investment portfolio for last month.

The only actual activity within my portfolio that involved the purchase of stocks or mutual funds came within my retirement account, where I invested $391.96 between my contributions and the contributions of my employer. 

Net of sales charges, my employer and I contributed $374.33 to my portfolio and my total share count of Capital Income Builder (CAIBX) increased by 6.761 shares from 104.572 shares to end April to 111.333 shares to end May.

As a result of the above capital contributions, my annual forward dividend income was boosted by $14.47, which equates to a net yield of 3.87%.

The only other activity within my investment portfolio was my $2,475.19 reduction in margin debt from $4,964.66 to $2,489.47.

This halving of my Robinhood margin resulted in a $123.76 increase in my annual forward dividends net of margin interest.

Factoring in that I need to pay off a bit of credit card debt that will start bearing interest this September and my usual living expenses, I am well on track to eliminate all of my margin debt in July aside from the interest free $1,000 portion that will essentially cover the cost of Robinhood Gold and allow me to access Morningstar's reports for free.

Concluding Thoughts:

As a result of a 3 paycheck month and a $1,200 stimulus check, May was a great month in terms of deleveraging my Robinhood portfolio and building my retirement portfolio.

Including the suspension of Tanger Factory Outlet Centers' (SKT) dividend last month, my annual forward dividend income was boosted by $122.50 from just under $1,100 to $1,220. 

I deployed a total of $2,849.52 in May at an average yield of 4.85%.

Discussion:

How was your month in terms of capital deployment?

Did you endure any dividend cuts or suspensions during the month of May as I did with SKT?

As always, thanks for reading and I look forward to the comments that you leave in the comment section below!

May 2020 Dividend Income

As I'm writing this blog post here on May 31st, it has been an astounding 83 days since the Milwaukee Bucks last played and the MLB season has yet to start about 2 months after what was scheduled to be Opening Day.

The past few months have definitely been an adjustment in terms of my time commitment as the Bucks used to consume 7-8 hours a week of my time between games and occasional perusing of Bucks news/team and player grades for each game.

Fortunately, I have this blog, dividend investing, mobile gaming, spending time with family, and playing basketball in the driveway to fall back on or I would have completely lost my mind by now.

With that being said, I'll be examining my dividend income for May 2020.

Analysis:

During the month of May, I collected $86.62 in net dividends against the $86.62 in dividends collected in February 2020, and generated a 96.7% YOY growth rate compared to the $44.04 in dividends received in May 2019.

Delving into things a bit further, I received $74.84 in dividends in my Robinhood portfolio from 16 companies net of the $5.00 in Robinhood Gold fees and $10.99 in Robinhood Gold for my use of margin. I also collected $11.46 in dividends from 3 companies within my Webull portfolio. Lastly, I received $0.32 in dividends from 15 companies in my M1 Finance portfolio.

The same amount of dividends collected from February 2020 to May 2020 was as a result of the following activity within my taxable accounts:

I benefited from $1.44 in additional dividends from Williams Sonoma (WSM) as a result of my purchase of another 3 shares in March.

I also received an extra $3.36 in distributions from Energy Transfer (ET) because of my decision to purchase 10 units of ET during my March buying spree and 1 unit of ET in February.

I received an extra $1.76 in dividends from British American Tobacco (BTI) as a result of my purchase of 3 shares in March, net of ADR fees.

I also benefited from my purchase of 2 units of Magellan Midstream Partners (MMP), which boosted my dividend income by $2.06 during May.

My purchase of an additional 3 shares of Realty Income (O) in March and O's dividend increase resulted in an additional $0.70 in dividend income in May.

Another purchase that boosted my dividend income was my purchase of 1 share of AbbVie (ABBV), which added $1.18 to my May dividend income.

My purchase of 16 shares of Main Street Capital (MAIN) in March resulted in an extra $3.28 in dividend income collected in May.

I also collected an additional $0.02 in dividend income as a result of Tanger Factory Outlet Centers' dividend increase, though the company later suspended its dividend, which will likely impact my August income report.

EQM Midstream Partners' (EQM) recently announced distribution cut affected my distributions for the first time in this report, which resulted in a $3.09 reduction in May distribution income.

I also added 12 shares of ONEOK (OKE) in March, which led to an additional $11.22 in dividend income during May.

My purchase of an additional 5 units of Enterprise Products Partners (EPD) resulted in an additional $2.23 in distribution income in May.

My purchase of another share of General Dynamics (GD) in March and GD's recent dividend increase boosted my dividend income by $1.26 in May.

The March purchase of an additional 2 shares of Lowe's (LOW) added $1.10 to my May dividend income.

An additional 3 shares of AT&T (T) that I also purchased in March added $1.56 to my May dividend income.

Due to the timing of The GEO Group's dividend payment, I collected $5.76 less in dividends during the month of May.

Due to the fact that Simon Property Group is deferring its dividend announcement until June, my dividend income was $6.30 less in May than it was in February.

My Robinhood Gold subscription deducted $5.00 from my net dividend income and the interest on my margin deducted $10.99 from my net dividend income.

The final activity came within my M1 Finance portfolio, again, when EQM Midstream Partners paid me $0.03 less in distributions compared to February.

Concluding Thoughts:

Overall, I'm pleased with a steady mid-quarter month in May compared to February as it was a few months ago that we began to see the impact of dividend cuts and suspensions within my portfolio and many other dividend investor's portfolios.

While I do believe that there will be a couple more cuts within my portfolio over the next two months, I am encouraged by the fact that I have paid down nearly $2,500 (half of my total margin heading into May) and over 60% of the margin that I intend to pay off as I plan on using the first $1,000 in interest free margin to essentially cover the cost of Robinhood Gold with dividends on that $1,000 to access Morningstar's reports and the other benefits of Robinhood Gold.

The significant deleveraging that I was able to execute during May will more than offset the impact of any of the dividend cuts that I am expecting in the next two months and since I anticipate that I will begin investing to the tune of $1,500-$2,000/month once again beginning in July, I am forecasting a slight uptick in my August dividend income, approaching $100 net of Robinhood Gold fees and interest.

Discussion:

How was your May in terms of dividends collected?

Did you benefit from any first time dividend payments from new holdings?

What are you forecasting for your August dividend income?

As always, I thank you for your readership and welcome comments in the comment section below.