Expected Dividend Increases for October 2020

At the time of my writing this blog post, the third quarter of 2020 is fast approaching its end, which leaves us with only one quarter to work toward crushing our goals for this year. The speed with which this year is passing us by never ceases to amaze me!

With that aside, I'll be discussing the dividend increases that I received during the month of September (spoiler: I was fortunate enough not to endure any dividend cuts during the month of September), and I'll be looking ahead to expected dividend increases for the month of October.

Actual Dividend Increases for September:

Dividend Increase #1: Realty Income (O)

Starting off with arguably the most consistent dividend payer in my portfolio, Realty Income (O) once again met my expectation of a 0.2% increase in its monthly dividend as I outlined in my previous post of this series, with O increasing its monthly dividend from $0.2335/share to $0.2340/share.

O's dividend announcement resulted in a $0.042 increase in my annual forward dividends across my 7 shares of the stock.

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

Moving to yet another incredibly consistent REIT within my portfolio, W.P. Carey (WPC) announced a 0.2% increase in its quarterly dividend $1.042/share to $1.044/share, which was once again in line with my expectations.

This one-two punch of O and WPC has never failed to impress me with steady dividend increases since I initiated my positions in early 2018.

WPC's dividend announcement helped to pad my annual forward dividends by $0.04 across my 5 shares of the stock.

Dividend Increase #3: STORE Capital (STOR)

Staying on the theme of high-quality REITs, STORE Capital (STOR) is my newest holding of the three REITs highlighted in this section of the post, with my position dating back to March of this year when I went on my buying spree as the financial markets were tanking.

Because I haven't owned STOR for much longer than 6 months, I blanked on the dividend increase that was scheduled for September.

In light of the significant disruptions of COVID-19 to just about every sector of the economy, I was very pleased with STOR's 2.9% increase in its quarterly dividend from $0.35/share to $0.36/share.

Across my 17 shares of STOR, my annual forward dividends were boosted by $0.68.

Dividend Increase #4: Philip Morris International (PM)

Moving to the tobacco industry, Philip Morris International (PM) also managed to meet my expectations, raising its quarterly dividend 2.6% from $1.17/share to $1.20/share.

Across my 9 shares of PM, my annual forward dividends surged $1.08 as a result of PM's dividend increase.

Dividend Increase #5: Lockheed Martin (LMT)

Still sticking with the theme of consistency, Lockheed Martin (LMT) managed to meet my expectations with its announcement that it was increasing its quarterly dividend 8.3% from $2.40/share to $2.60/share.

LMT's dividend announcement resulted in a $0.80 boost to my annual forward dividends across my single share of the stock.

Dividend Increase #6: General Mills (GIS)

After not having raised its dividend since June 2017 following its $8 billion acquisition of Blue Buffalo, General Mills (GIS) recently reported 9% YoY growth in its revenue and $1.00/share in adjusted earnings versus $0.87/share analyst expectations for its first quarter, which prompted the company to announce a 4.1% increase to its quarterly dividend from $0.49/share to $0.51/share.

I had gotten so used to GIS not raising its dividend, that I had failed to consider that the company would eventually be increasing its dividend, so I was pleasantly surprised by the news last week.

Across my 4 shares of the stock, my annual forward dividends were boosted by $0.32.

Expected Dividend Increases for October:

Expected Dividend Increase #1: Visa (V)

As a result of owning shares of Visa (V) less than a year, I mistakenly assumed that V would be announcing its dividend increase in September, but a few weeks ago, I realized that V has historically announced dividend increases in late October.

I would reiterate the following that I outlined in my previous post of this series as it pertains to V:

"Despite a difficult year for Visa (V) amid reduced consumer spending due to travel restrictions and the closure of many across the world, I remain confident that V will deliver a dividend in the weeks ahead.

While I don't envision a teens or twenty percent plus dividend increase being announced as I believe V's management team and Board of Directors will be conservative in their dividend announcement, I am forecasting a 10.0% increase in the quarterly dividend from $0.30/share to $0.33/share.

Across my 2 shares of V, I am forecasting a $0.24 boost in my annual forward dividends."

Expected Dividend Increase #2: Iron Mountain (IRM)

Given that Iron Mountain (IRM) is focused on reducing its AFFO payout ratio from its current mid-70% range to the high-60% range to bring the AFFO payout ratio in line with its data center REIT peers, I expect that dividend growth will significantly lag AFFO growth over the next 2-3 years.

As a result, I am forecasting that IRM will announce a 1.1% increase in its quarterly dividend from $0.6185/share to $0.6250/share.

If my prediction proves to be correct, IRM's dividend increase would result in a $0.208 padding to my annual forward dividends across my 8 shares of the stock.

Concluding Thoughts:

Across the board, this month was the strongest month in terms of dividend increases since earlier this year in February, when dividend announcements during the month boosted my annual forward dividends by $3.00.

My annual forward dividends managed to increase $2.962 as a result of the dividend announcements in September, which would require an investment of $74.05 to replicate, assuming a 4% yield.

This development suggests that the worst is behind my portfolio and I fully expect my annual forward dividends to grow each and every month to close out this year, especially as I am less than 6 weeks away from being able to fully shift my focus from paying off debt back to dividend growth investing.

Discussion:

How was your month along the lines of dividend announcements?

Did you benefit from any first time dividend increases as I did with STOR and LMT this month?

Thanks very much for your readership and I look forward to reading and replying to your comments in the comment section below!

It's All About The Savings Rate...

Over the past few weeks, I have been thinking more about the importance of savings rate within the context of achieving financial independence, especially at a relatively early age as I am striving to do.

This all came about when one weekend, I decided to tally my earnings history since I began my first job shortly out of high school in 2015 as a cashier at ShopKo while I was attending college. 

I realized that a few paychecks ago, I surpassed $100,000 in cumulative gross income in my previous 5 years.

This led me to also tally the amount that I have saved during that same time, which confirmed to me that I am roughly on track to achieving my long-term goal of financial independence at an early age.

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My Savings Rate To Date Is ~63%

When factoring in the $105,700 that I have earned between my first job at ShopKo, my current job, and my Seeking Alpha side hustle against the $66,900 in savings during that time (including my $38,000 cost of my 4 year degree and my $32,900 net worth, as well as factoring in the $4,000 in savings that I started with around the time that I began my first job at ShopKo), my savings rate comes in at just over 63%.

From an early age, I was always more of a saver than a spender. This was especially the case when I learned the power of dividend growth investing, so my cumulative savings rate was about what I expected it would be.

It also helped that I was able to live with my parents rent free for all of that time, which helped me to graduate debt free last August, saving me from having to pay interest expenses.

Image Source: Mr. Money Mustache

Given that my goal is to achieve financial independence by age 35 and that I'm 12 years away from turning 35, I essentially need to maintain my cumulative savings rate to date in order to achieve this goal.

I built in a 20% margin of safety as far as my expenses are concerned as I'm currently only spending about $1,000 a month, but assumed monthly expenses of $1,200 and that my current income level would remain the same for the duration of the 13 years it would take for me to reach FI as illustrated above.

My expenses could very well end up being notably higher than the above should I decide to get married or have kids, but I also figure that my income will likely gradually rise over the next 13 years, so I believe it will ultimately balance out.

Concluding Thoughts:

While I have known the importance of minimizing unnecessary expenses and maximizing income for several years now, compiling this blog post really reiterated the importance of doing so as I continue on my journey of attaining financial independence.

I'm more energized than I ever have been to more carefully scrutinize my expenses and maximize my income, and I'm looking forward to the next few years of my career as I build upon my skillset and presumably, my earning potential.

Discussion:

What has your savings rate been over the years?

Are you currently on track to achieve financial independence at your target date/age?

Thanks for reading and I look forward to reading your comments in the comment section below!

Updated Personal & Financial Goals for 2020

Given that fall is barely a week away at the time that I'm writing this blog post, I thought it would be an appropriate time to reexamine my personal and financial goals for 2020 as it has been nearly 9 months since I initially set my goals for 2020.

There have been a few developments in my life over the past 9 months that have necessitated reevaluating my goals for the remainder of the year.   

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Below are my updated financial goals for the year:

1. Collect $1,200+ in dividends for the year

2. End 2020 with $1,450 in annual forward dividends

3. Amass $35,000 in investments/end 2020 with a net worth of $45,000

Given that I have prioritized paying off various small debts over the past several months, this year hasn't quite been as favorable to me in terms of dividend income as I expected it would be when I set my goals 9 months ago.

Adding to the headwinds in terms of dividend income, is the fact that my portfolio has endured multiple dividend cuts and a dividend suspension this year primarily as a result of COVID-19.

It's for that reason I am revising my goal down from collecting $1,500 in dividends during the year to $1,200.

As it stands now, I am on track to collect about $1,125 in dividend income this year, so I believe that $1,200 is a realistic goal in that I will have to push myself a bit to achieve the goal given my continued deleveraging of my personal balance sheet.

As far as my second goal, I have revised my goal down from ending the year with $2,000 in annual forward dividend income to $1,450 for the same reasons that I outlined above.

I estimate that by late October, I will be entirely debt-free aside from $1,000 in interest free margin within my Robinhood portfolio, so I'll have two months to boost my annual forward income from about $1,300 by that point to $1,450 with dividend increases/dividend reinvestment/fresh capital contributions.

I'm also revising my investment/net worth target down significantly from $45,000/$60,000 to $35,000/$45,000, which I believe I will be able to barely meet in a base-case scenario.

Now that I've outlined my updated financial goals for the few months remaining in this year, I'll be discussing my updated personal goals for 2020.

1. Continue to publish at least one blog post each week

2. Publish at least one article a week on Seeking Alpha and reach 5,500 followers

Starting with my goal to publish at least one blog post each week, I feel that one blog post each week strikes a nice balance my personal life and pushing myself to produce content that I enjoy producing. 

Therefore, this goal remains the same as I outlined in my previous post when I set my goals.

Next, I am significantly reducing my goal of Seeking Alpha articles for 2020, and my follower goal as a result.

Initially, I was shooting for 100 articles this year, which would have been a pace of nearly 2 articles a week. 

I have actually been publishing an article each week on Seeking Alpha this entire year rather than the 2 that I used to publish, and despite the roughly 40% reduction in content production, my earnings from Seeking Alpha are slated to be only about 20% lower than last year.

I was compromising the joy that I got out of my Seeking Alpha side hustle for the sake of making only a bit more money, so I have been very pleased with my decision to cut back on Seeking Alpha and to make more downtime for myself on weekends.

One other time commitment that I mutually parted from was my agreement to write for I Prefer Income and to provide my input on the program.

The rationale behind this decision on my part was that I didn't feel I was an appropriate partner for I Prefer Income and I also wanted to prioritize my health to minimize the impact of burnout similar to my decision regarding cutting back on Seeking Alpha content production.

Concluding Thoughts:

While my goals were very attainable in 2019 and I achieved them with relative ease, I appear to have overcompensated with my goals this year in an effort to challenge myself.

Now that I have adjusted my goals to account for my overcompensation from too easily achieving last year's goals, I believe that I can realistically achieve this year's goals as long as I continue to remain disciplined and committed to accomplishing them.

I'm looking forward to these last few months of the year to exit this year with an even stronger foundation than when I entered this year.

Discussion:

Do you put pen to proverbial paper to make note of your goals or do you just note them mentally?

Have you set any goals that you felt were realistic at the time you set them only to realize they weren't attainable for the given time frame?

As always, I appreciate your readership and look forward to reading your comments in the comment section below!

August 2020 Dividend Income

I'm surprised that another month has passed us by already, but pleased to announce that my portfolio recorded yet another record month in terms of dividend income for the middle month of a quarter.

Despite deploying limited capital over the past few months due to paying off debt, the capital that I did deploy that was used to deleverage my Robinhood margin helped tremendously in boosting my dividend income during the month.

Without further ado, I present my dividend income for August 2020:

Analysis:

During the month of August, I collected $91.19 in net dividends against the $86.62 in dividends collected in May 2020, which represents a 5.3% quarterly growth rate.

More striking, is the fact that the $91.19 in net dividends received during the month represents an 86.4% YoY growth rate compared to the $48.93 in dividends collected in August 2019!

Going into more detail, I received $78.96 in dividends from 15 companies within my Robinhood portfolio net of the $5.00 in Robinhood Gold fees and $3.03 in Robinhood Gold margin costs. I also collected $11.93 in dividends from 3 companies within my Webull portfolio. Finally, I collected $0.30 from 14 companies in my M1 Finance portfolio.

The $4.57 increase in my dividends from May 2020 to August 2020 was as a result of the following activity within my portfolios:

I received an additional $0.61 in dividends from my positions in British American Tobacco (BTI) within my Robinhood and Webull portfolios.

As a result of Tanger Factory Outlet Centers (SKT) recent suspension of its dividend, my dividend income from my SKT position was reduced by $3.93.

I also received $0.07 less in dividends from Equitrans Midstream Corporation (ETRN) as a result of the recent merger (including the $0.02 reduction in my M1 Finance portfolio).

My Robinhood Gold/margin costs in August of $8.03 were $7.96 lower than the $15.99 in costs during May 2020.

Concluding Thoughts:

Despite an effective distribution cut via ETRN and a dividend suspension via SKT taking effect this month, my dividend income in August managed to advance by mid-single digits over May 2020.

This was primarily due to my deleveraging of over $1,900 of Robinhood margin over the past few months.

Given that I believe the worst is finally behind my portfolio and I'm not expecting any further dividend cuts from the companies that are scheduled to pay dividends in the middle month of the quarter, I am expecting a new record in November for a middle month of the quarter.

Discussion:

How was your dividend income during August?

Did your portfolio feel the impact of cuts/suspensions during August?

Thanks for reading and I look forward to your comments in the comment section below!

August 2020 Dividend Stock Purchases

I'm gradually building my position in Capital Income Builder (CAIBX) within my retirement account as I'm continuing to deleverage my Robinhood margin and pay off credit card debt.

This month was another month of relatively little activity in terms of capital deployment, but with each passing month, I am getting closer to resuming my previous capital deployment of $1,500-$2,000/month.

With that aside, I'll delve into my dividend stock purchases for the month of August 2020.

As shown above, between my 7% gross contribution and my employer's 3% match on the contributions, I was able to contribute gross capital of $293.34 and $280.13 in capital net of sales charges to my retirement account.

These contributions to my retirement account helped my CAIBX position grow by 4.727 shares from 120.546 entering into August to 125.273 shares entering into September.

Factoring in $2.14 in annual forward dividends/share, the additional 4.727 shares of CAIBX boosted my annual forward dividend income by $10.12, which equates to a net yield of 3.61%.

When also including the $78.96 reduction in my Robinhood margin from $1,762.87 at the start of August to $1,683.91 at the end of August, my annual forward dividend income increased by $3.95 (given the 5% cost of capital for Robinhood margin).

Concluding Thoughts:

Overall, I deployed $359.09 in capital (including dividend reinvestment) during the month of August 2020 and added $14.07 in annual forward dividend income as a result of my capital deployment, which works out to an average yield of 3.92%.

When also factoring in the dividend announcements during the month of August, my annual forward dividend income is down just under $7 and I am about 2.2% off of my all-time high annual forward dividend income of $1,252.

Given that I would like to have most of my $4,000 in debt paid off before I refocus on investing, it will be a few more paychecks before I am able to revert to my previous $1,500-$2,000/month capital deployment schedule.

Discussion:

Did you experience any dividend cuts during August like I did with GEO and BP?

How was your month in terms of capital deployment?

As always, I thank you for your readership and look forward to reading your comments in the comment section below!