January 2021 Dividend Stock Purchases

The weather here in Central Wisconsin continues to be pleasantly warm, especially for late January as I'm writing this blog post.

The next few days are expected to reach the low 20s Fahrenheit for highs and we have yet to dip below zero factoring in wind chill to this point.

With that aside, I will be discussing my dividend stock purchases during January 2021.

Starting with my retirement account, I deployed $253.77 in gross capital when including my 7% contribution to my Capital Income Builder (CAIBX) position within my retirement account and my employer's 3% matching contribution.

When adjusting for the 3.5% sales charge that CAIBX charged to my account in January, I deployed $244.88 in net capital during January 2021.

As a result of my capital contributions within my retirement account, my CAIBX position increased 3.819 shares from 145.695 to start January to 149.514 at the end of January, which boosted my net annual forwards by $8.17.

Therefore, my average weighted net yield on my CAIBX investments in January worked out to 3.34%.

My first purchase within my taxable accounts was when I added 1 share to my National Retail Properties (NNN) position at a cost of $39.25, which was because NNN is a high quality business trading at fair value despite the surge in price since my previous article on Seeking Alpha a few months ago.

When considering the $2.08 in net annual forward dividends that were added as a result of my purchase, I deployed my capital at a 5.30% net yield.

My next purchase within my taxable accounts was when I added 1 share to my STORE Capital (STOR) position at a cost of $31.00, which I executed because I believe that despite the price runup since my previous article on Seeking Alpha last year, STOR remains fairly valued at this time.

When factoring in the $1.44 in additional net annual forward dividends due to my purchase, I deployed my capital at a 4.65% net yield.

My final purchase during the month of January was when I initiated a 7 share position in American Electric Power (AEP) at an average cost of $80.95 a share.

My reasoning for initiating a position in AEP is that although AEP hasn't fallen quite as much as I indicated I would have liked it to before initiating a position in it is the overall resiliency of the business as outlined in my Seeking Alpha article from last November.

When considering the $20.72 in net annual forward dividends that were added as a result of my purchase, I deployed my capital at an average weighted net yield of 3.66%.

Concluding Thoughts:

Overall, I deployed $881.48 in capital during the month of January 2021, which equates to an average weighted net yield of 3.68% against the $32.41 in net annual forward dividends added as a result of my purchases.

When I also factor in the $2.71 increase in my net annual forward dividends as a result of dividend announcements in January 2021, my net annual forward dividends advanced from just over $1,363 heading into this month to just under $1,399 at the end of this month.

Since I now have $0 in credit card debt and I anticipate no material capital expenditures aside from my usual living expenses in the next 3 months, I am forecasting that I will deploy over $5,000 in capital between now and April.

Discussion:

How was your capital deployment in the month of January 2021?

Did you initiate any new positions in your portfolio as I did with AEP?

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

Expected Dividend Announcements for February 2021

As I'm writing this blog post, it is mid-January here in Central Wisconsin and the temperatures are hovering just above freezing. It's incredible to think that the temperatures haven't yet dipped that far below freezing in my neck of the woods when there have been many Januarys that have been around sub-zero!

With that in mind, I will be discussing the dividend announcements in my portfolio during January 2021 and looking ahead to the dividend announcements that I am expecting in February 2021.

Actual Dividend Announcements for January 2021

Increase: Enterprise Products Partners (EPD) 

Well, a distribution increase from Enterprise Products Partners (EPD) is a pleasant surprise as I had almost forgot that the last time EPD increased its distribution was a calendar year ago, a couple months before COVID-19 was declared a pandemic by the World Health Organization, turning the world upside down.

Due to the expectation of a recovery in economic activity going forward, energy commodities have soared, with WTI crude surpassing $50/barrel and natural gas closing in on $3/MMBtu.

As a result of the anticipated recovery, EPD opted to announce a 1.1% increase in its quarterly distribution from $0.445/unit to $0.45/unit.

Across my 33 units of EPD, my net annual forward distributions advanced $0.66 due to EPD's distribution announcement.

Reinstatement: Tanger Factory Outlet Centers (SKT)

Arguably the biggest positive development in my dividend portfolio was the reinstatement of Tanger Factory Outlet Centers' (SKT) dividend at $0.1775/share (roughly half of the previous dividend). It was only about 8 months ago when SKT was one of the companies in my portfolio to announce a dividend suspension or cut.

Given that SKT is required by law to pay out at least 90% of its net income to maintain its status as a REIT and that SKT has reported positive cash flow in the second half of 2020 on top of maintaining a strong balance sheet, I believe that SKT made the right decision with this announcement.

Across my 11 shares of SKT, this announcement helped my net annual forward dividends to surge $7.81.

Freeze: Realty Income (O)

In a surprising turn of events, Realty Income (O) opted to maintain its monthly dividend at $0.2345/share.

While I will never fault a company for being conservative in its dividend policy (how else would a company continually pay out steadily increasing monthly dividends?), it was surprising that O's reasonably strong operating results didn't lead to the company announcing a 2-3% increase in the monthly dividend as I expected in my previous post of this series.

Cut: The GEO Group (GEO) 

Unfortunately, The GEO Group (GEO) announced that it would be cutting its dividend for the second time in the past few months. GEO further reduced its quarterly dividend from $0.34/share to $0.25/share in response to the impact of COVID-19 on its business and to preserve capital for debt repayment in the years ahead.

While I never like to see dividend cuts, I will continue to hold my shares of GEO at this time because I agree with the decision to focus on debt repayment.

Across my 16 shares of GEO, this reduced my net annual forward dividends by $5.76.

Expected Dividend Announcements for February 2021

Expected Increase #1: PPL Corp (PPL)

Starting with PPL Corp (PPL), I am expecting that the company will announce a dividend increase similar to last year's, which would be a 0.6% increase in the quarterly dividend from $0.4150/share to $0.4175/share.

Across my 8 shares of PPL, this dividend announcement would result in a $0.08 increase in my net annual forward dividends.

Expected Increase #2: Genuine Parts Company (GPC)

Moving to the Dividend King with the longest dividend increase streak in my portfolio, I am expecting Genuine Parts Company (GPC) to extend its dividend increase streak to 65 consecutive years next in February. 

While GPC is a Dividend King and it boasts a stout 6.8% annual dividend growth rate over the past 10 years, I am expecting a dividend increase in line with last year's as the company looks to recover from the the impact of COVID-19.

As a result, I am forecasting a 3.8% increase in GPCs quarterly dividend from $0.79/share to $0.82/share.

If my prediction proves to be correct, my net annual forward dividends would advance by $0.72 across my 6 shares of GPC.

Expected Increase #3: Prudential Financial (PRU)

Given that Prudential Financial's (PRU) earnings are expected to fully recover in FY 2021 per Yahoo Finance estimates, I am forecasting that PRU will announce a dividend increase a bit less than last year for the sake of conservatism.

Therefore, I am expecting that PRU will announce a 6.4% increase in its quarterly dividend from $1.10/share to $1.17/share. 

Across my 9 shares of PRU, this dividend announcement would boost my net annual forward dividends by $2.52.

Expected Increase #4: Home Depot (HD)

Another strong dividend increase that I'm expecting is from none other than Home Depot (HD).

While I don't anticipate HD to deliver a dividend increase near its 5 or 10 year CAGR of ~20% this February, I do believe that HD's strong performance in 2020 and promising outlook for 2021 will buoy the stock to deliver a solid 10% dividend increase in its quarterly dividend from $1.50/share to $1.65/share.

If my prediction proves to be correct, my net annual forward dividends would advance by $1.20 across my 2 shares of HD.

Expected Increase #5: Digital Realty Trust (DLR)

Since Digital Realty Trust (DLR) has held up relatively well in 2020, I am expecting a dividend increase similar to the one last year.

As such, I am predicting a 3.6% increase in DLR's quarterly dividend from $1.12/share to $1.16/share.

Across my 3 shares of DLR, this dividend announcement would increase my net annual forward dividends by $0.48.

Expected Increase #6: Albemarle (ALB)

I'm expecting a mid-single digit dividend increase from the somewhat recently minted Dividend Aristocrat, Albemarle (ALB).

I am anticipating that ALB will announce a 5.2% increase in its quarterly dividend from $0.385/share to $0.405/share.

Should my prediction prove to be correct, my net annual forward dividends would be boosted by $0.40 across my 5 shares of ALB. 

Expected Increase #7: United Parcel Service (UPS)

Another business that has fared well in 2020 and is positioned even better this year with ~10% earnings growth forecasts is United Parcel Service (UPS), which is why I am forecasting a 6.9% increase in UPS's quarterly dividend from $1.01/share to $1.08/share.

Across my 4 shares of UPS, my net annual forward dividends would advance by $1.12 as a result of this dividend announcement.

Expected Increase #8: Cisco (CSCO)

Cisco (CSCO) held up relatively well in 2020, but Yahoo Finance is expecting CSCO to fare even better in 2021 with 6% earnings growth forecasted at this time.

In light of this earnings forecast, I am expecting a 5.6% increase in CSCO's quarterly dividend from $0.36/share to $0.38/share.

If my prediction proves to be correct, my net annual forward dividends would increase by $0.88 across my 11 shares.

Concluding Thoughts:

While I didn't receive the dividend increase from O in January like I was expecting, I was fortunate enough to receive an increase from EPD and a reinstatement from SKT, which was only partially offset by another cut by GEO.

These dividend announcements added $2.71 to my net annual forward dividends, which would require a $67.75 investment at a 4% yield to replicate.

I'm very excited to kick off the next few months of dividend increases with 8 expected increases in February, which would add $7.40 if my forecasts play out.

This would require a sizable $185.00 investment at a 4% yield to duplicate, which would be the largest impact of dividend increases on my portfolio since I began investing in September 2017!

Discussion:

How was your January in terms of dividend announcements?

Did you experience any dividend reinstatements in your portfolio as I did with SKT?

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

December 2020 Dividend Income

It's hard to believe that as I'm writing this blog post, the first full week of the year is already in the books.

With that said, as I alluded to in my Review of 2020 Financial/Personal Goals post last week, I'll turn my attention to the dividend income that I received in December 2020.

Analysis:

During the month of December 2020, I received $165.60 in net dividends against the $139.46 in net dividends that were received in September 2020, which represents a quarterly growth rate of 18.7% (and adjusting for special dividends in my retirement account, 5.5%).

Furthermore, the $165.60 in net dividends received in December 2020 equates to an 80.7% YoY growth rate compared to the $91.63 in net dividends that were received in December 2019.

Diving deeper into the net dividends that I received in December 2020, I collected $63.56 (net of the $5.00 in Robinhood Gold fees) from 19 companies in my Robinhood portfolio, $11.89 from 6 companies in my Webull portfolio, $89.67 from the Capital Income Builder (CAIBX) holding in my retirement account, and $0.48 from 24 companies in my M1 Finance portfolio.

The additional $26.14 in net dividends received from September 2020 to December 2020 came as a result of the following activity within my portfolios:

Due to CAIBX's dividend schedule, I received $18.50 in special dividends in December 2020 that I didn't receive in September 2020.

As a result of owning more shares of CAIBX, I also received an additional $7.51 in regular dividends.

I also received an extra $1.05 in dividends from my 3 shares of Broadcom (AVGO) as a result of their most recent 10.0% dividend increase.

I received an additional $2.80 from Lockheed Martin (LMT) as a result of my purchase of 1 share of the stock in my Robinhood account, and the stock's 8.3% dividend increase in my Webull account.

My dividends declined $1.25 across my Robinhood and M1 Finance accounts as a result of Dominion Energy's (D) recent dividend cut.

My dividends received from Royal Dutch Shell (RDS.B) increased $0.12 as a result of the most recent 4.1% dividend increase.

I also received an additional $0.01 in dividends from Realty Income (O) due to the most recent 0.2% dividend increase.

My dividends received from PepsiCo (PEP) declined by $2.07 across my Robinhood and M1 Finance accounts due to the timing of PEP's dividend payment.

I received an additional $0.04 in dividends from Visa (V) in my Webull account as a result of V's most recent 6.7% dividend increase.

My net dividends also increased by $2.75 as a result of the reduction in Robinhood interest to $0.00.

My dividends received from Digital Realty Trust (DLR) declined by $3.36 in my Robinhood account due to the timing of DLR's dividend payment.

The $0.04 special dividend that I received from Fastenal (FAST) in my M1 Finance portfolio offset the $0.03 in collective declines from D and PEP that I previously discussed, which helped my dividends to increase by $0.01 in this account.

Concluding Thoughts:

I ended 2020 with a bang, collecting a record $165.60 in net dividends in December.

My net dividends received in 2020 were a record $1,127.05 against $615.30 in net dividends received in 2019, which represents an 83.2% YoY growth rate in net dividends from 2019 to 2020.

Despite a challenging year on the dividend announcement front, steady capital contributions and dividend reinvestment helped me to produce my best year of dividend income yet, which positions me for an even better year of income in 2021.

Discussion:

How was your dividend income in December 2020?

Did 2020 represent your best year of net dividends to date in your investing career as well?

As always, I appreciate your readership and welcome your comments in the comment section below.

Review of 2020 Financial/Personal Goals

 As I'm writing this blog post, the first day of 2021 is upon us. Now that 2021 is finally here and I have already outlined my goals for this year, I will be looking back at whether I was able to accomplish my financial and personal goals for 2020!

2020 Financial Goals:

1. Collect $1,200+ in net dividends - Fail - $1,127.05

I fell just short of collecting $1,200 in net dividends during 2020, as I collected $1,127.05 in dividends during the year (when the dividends received in December 2020 are included, which will be my blog post for next week).

When I consider that this represents 83.2% YoY growth compared to the $615.30 in net dividends received in 2019, I am pleased with what I managed to accomplish in 2020 despite coming up short of my $1,200 goal.

2. End the year with net annual forward dividends of $1,450+ - Fail - $1,363.01

Another goal I came up a bit short on was ending the year with $1,450+ in net annual forward dividends, with my portfolio ending 2020 at $1,363.01 in net annual forward dividends.

Given that I have been especially dedicated to investing in the highest quality dividend stocks with an average weighted yield of 3.0-4.5% in the last quarter of 2020, I am perfectly fine ending the year short of my goal as I believe that I invested as much as I possibly could without increasing my risk of dividend cuts that would set me back later.

If I learned anything from 2020, it was that dividend safety is paramount while yield is secondary.

3. Amass $35,000 in investments - Fail - $32,900

I fell about $2,000 short of amassing $35,000 in investments in 2020, which is fine considering that I believe I am positioned well to surpass $55,000 in investments during 2020, provided financial markets are fairly flat to the downside or upside.

4. End the year with a net worth of at least $45,000 - Fail - $44,126

I ended 2020 with a net worth about $900 off of my goal of $45,000, which is once again fine IMO given that I will only need to invest about $20k to reach my goal in 2021 of a net worth of at least $65k.

2020 Personal Goals:

1. Publish at least 1 blog post each week - Pass - 52 posts for 2020

Starting with my first personal goal in 2020, I managed to achieve my goal of posting at least 1 blog post each week as I published 52 blog posts during the year.

I believe that posting 1 blog post each week strikes a nice balance between work and play, so I will once again strive to meet this goal in 2021 as I noted in my 2021 Financial/Personal Goals post. 

2. Publish at least 1 article a week on Seeking Alpha - Pass - 55 articles for 2020

Another goal that I managed to achieve in 2020 was to publish at least 1 article a week on Seeking Alpha, having published 55 articles during the year.

I will run this goal back again in 2021 since I felt as though it was a goal that wasn't overwhelming, but it was also a goal that I had to work at to achieve.

3. Surpass 5,500 followers on Seeking Alpha in 2020 - Fail - Ended 2020 with 5,049 followers

I fell short of my final personal goal in 2020, which was to end the year with 5,500 followers on Seeking Alpha.

Even so, I managed to add more than 2,000 followers in 2020, which is humbling and leads me to believe that I am in a great position to come close to my goal of 8,000 in 2021.

Concluding Thoughts:

While I only accomplished 2 of my 7 financial/personal goals in 2020, I arguably came within shouting distance of the other 5 goals.

I believe that my accomplishments in 2020 set a great foundation for the year ahead and I'm looking forward to pushing myself to come as close as possible to reaching my goals for 2021 as I continue my journey to financial independence.

Discussion:

How did you fare in achieving your goals for 2020?

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