Weather Update And Interesting Thoughts On Visa

As I'm writing this blog post on Thursday, November 16th, the weather here in Central Wisconsin is beautiful. This is especially true for this time of year. It's expected to reach a high of 62 degrees Fahrenheit today. Ergo, I plan on getting outside soon.

As readers will recall from my updated posting schedule blog post, my writing one week out of each month will be meaningfully reduced. That's because I am settling into a role at Dividend Kings and also working on building my emergency fund up. Thus, I won't resume writing my monthly stock watch list post likely until January 2024.

In the meantime, here are just thoughts that popped up in my head shortly after writing an article on Visa (V) over at Seeking Alpha.

Visa Practically Has License To Print Money

One of the biggest takeaways from my article continued to be V's unbelievable profit margins. In the first nine months of its fiscal year 2023, the company turned 54.4 cents out of each $1 of net revenue into free cash flow.

Short of printing money, the closest thing that I can think of in terms of free cash flow margins to V is my home state's lottery. In the last 35 years, the Wisconsin Lottery has paid 56.9% of its revenue out in prizes. Operational expenses accounted for another 6.4% of total revenue over that time.

This implies that the Wisconsin Lottery's profit margin since its inception has been in the high-30% range. To me, this is just mindboggling and really goes to show just how lucrative V's business model and wide competitive moat make it.

Concluding Thoughts:

That's all I really have for this week, so I hope readers found value in the additional perspective regarding V's amazing profitability. Soon, I plan on highlighting the dividend raises that I received in November to date and looking ahead to December.

Discussion:

Since I'm not aware of any business that is more profitable than V, do you know of any publicly traded companies with higher margins?

Thank you for your readership and I look forward to your comments below!

Happy Thanksgiving To Everyone!

As I'm writing this blog post here on November 20th, it is the week of Thanksgiving. I just wanted to wish everybody a Happy Thanksgiving. I'll also just briefly highlight a few things that I am grateful for and leave it at that for this week.

Gratitude #1: Family

As is the case with at least some of us in the investing community, there have been times that I have lost sight of my blessings in my pursuit of wealth. I often look toward the future in anticipation of hopefully one day being on a very financially sound footing.

But this time of year especially, I'm so fortunate to have a mother, father, grandmother, uncle, brother, sister-in-law, and nephew who I at least spend some time with each week. I have been trying to live less in the future and more in the present of late. Spending quality time with my family has helped me in this regard.

My spending habits are modest by American standards. So, I need to remind myself that the real reason I am investing in the first place is to be able to extend charity toward my family and toward non-profits about which I am passionate. In times of financial need, I hope to be there for my family and others.

Gratitude #2: Health

As somebody with anxiety and depression, it can be tough for me at times to characterize my health as excellent. But even with my mental health setbacks, I try to remind myself that I'm still in a position so many other people would take in a heartbeat. The fact that I can walk, jog, run, reasonably function, and so much more is something that I strive to not take for granted.

Gratitude #3: My Career And Geographic Location

Finally, I was blessed to rebound from my job loss at Motley Fool rather quickly. Although it will be a sizable pay cut for a while versus where I was at prior to my job loss, I'll still at least be in the middle class, with some disposable income. In an economically developed and relatively free country like the USA, that's still a pretty nice place to be overall.

Concluding Thoughts:

Even after my job loss, there are several things that I am so grateful to have in my life. I really couldn't ask for much more than to have a great family, okay health, and a solid career in an exceptional country. Through the trials and tribulations of life, God has blessed me so much more than I deserve!

Discussion:

What are you grateful for right now?

As an honorable mention, I am grateful for your readership and support! Please feel free to leave your comments below.

October 2023 Dividend Income

As I'm writing this blog post, it is already Wednesday, November 8th. Surprisingly, the weather is going to be beautiful for this time of year here in Central Wisconsin. After Friday, we'll be in a major warming trend. High temperatures will rise from the low-40 degrees Fahrenheit range to 60 degrees on Tuesday!

On that note, the time of the month means that the previous month is well behind us. Without further ado, I will dig into my dividend income for October 2023.

In October 2023, I collected $282.51 in net dividends. That works out to a 9.5% quarterly growth rate over the $258.02 in net dividends received in July 2023.

Compared to the $204.57 in net dividends that I collected in October 2022, this equates to a 38.1% year-over-year growth rate.

Examining these results further, I received $272.08 in net dividends from 29 companies in my Robinhood account. I also collected $10.24 in net dividends from four companies within my Webull portfolio. Finally, I received $0.19 in net dividends from eight companies in my M1 Finance account.

My net dividends collected soared by $24.49 from July 2023 to October 2023, which was due to the following activity throughout my portfolio:

My net dividends received from JPMorgan Chase (JPM) were $0.30 higher within my Robinhood account. That was the result of its 5% raise announced in June.

I collected an extra $5.01 in net dividends from American Tower (AMT) in my Robinhood portfolio, which was due to the most recent dividend increase and my additional purchase in June.

My net dividends received from W.P. Carey (WPC) grew by $0.02 within my Robinhood account. This was the result of a 0.2% bump in its dividend.

I collected an additional $0.01 from Realty Income (O) in my Robinhood portfolio, which was due to the most recent 0.2% dividend increase in September.

My net dividends received from Spirit Realty Capital (SRC) grew by $0.13 within my Robinhood account. That was the result of a 1% raise in its dividend declared back in August.

I collected an extra $3.45 in net dividends from Medtronic (MDT) in my Robinhood portfolio, which was due to my additional purchase in June.

My net dividends received from Main Street Capital (MAIN) grew by $0.15 within my Robinhood account. That was the result of a 2.2% raise in its dividend in August.

I collected an additional $7.82 in net dividends from Leggett & Platt (LEG) in my Robinhood portfolio, which was due to my add in August.

My net dividends received from Medical Properties Trust (MPW) declined by $8.96 within my Robinhood account. That was the result of the 48.3% slash to the dividend in August.

I also collected $0.21 less from GSK (GSK) in my Robinhood portfolio, which is due to the variability of the dividend payment.

My net dividends received from Philip Morris International (PM) grew by $0.63 within my Robinhood and Webull accounts. This was the result of a 2.4% raise in September.

I collected $0.97 in additional dividends from Altria Group (MO) in my Robinhood, Webull, and M1 Finance portfolios, which was due to the 4.3% raise announced in August.

My net dividends received from VICI Properties (VICI) surged higher by $7.05 within my Robinhood account. That was the result of the 6.4% raise in September and my tranche purchased in August.

I collected an extra $5.61 in net dividends from Iron Mountain (IRM) in my Robinhood and Webull portfolios. This was due to the 5.1% raise in the dividend and my purchase of more shares in August.

My net dividends received from Automatic Data Processing (ADP) grew by $2.50 within my Robinhood account, which was the result of my addition in July.

Finally, I collected an extra $0.01 from Illinois Tool Works (ITW) in my M1 Finance portfolio. This was due to the 6.9% raise announced in August.

Concluding Thoughts:

For the sake of building my emergency fund up to around nine months of expenses, I'm not expecting to begin deploying at least $1,500 in monthly capital until at least January. Thus, January 2024 net dividend income will likely clock in just below $300. But that should be my final month with net dividend income under the $300 mark.

Discussion:

How was your dividend income in October 2023?

Did you get paid any first-time dividends during the month?

As always, I appreciate your readership and welcome your comments below!

October 2023 Dividend Stock Purchases/Sale

As I'm writing this blog post, it's Friday, November 3, 2023. The temperature is going to reach a high of 47 degrees Fahrenheit here in Central Wisconsin, which isn't bad for this time of year.

With that aside, let's briefly highlight my one sale and my one purchase for the month of October.

My one sale for the month of October was 14 shares of W.P. Carey (WPC) at $52.58 a share. Unfortunately, the company made the decision to exit office properties through a spin-off. This will result in a 20% dividend cut, which is a tragedy as WPC was just a year away from a 25-year dividend growth streak. As my colleagues Adam Galas and Brad Thomas explained in a recent article on Seeking Alpha, the move was arguably questionable. WPC had already been working on and succeeding at reducing its exposure to office properties in recent years. The move just suggests that management isn't very confident in its fundamentals right now.

In limited circumstances, there are times that I will hold after a dividend cut. I did so with Energy Transfer (ET) and it has worked out pretty well. But I've simply ran out of patience with WPC. This action reduced my net annual forward dividends by $59.864, pending the actual amount of what the cut would have been.

I redeployed these capital proceeds into Ares Capital (ARCC), which is arguably the best BDC in the world not named Main Street Capital (MAIN). I purchased 38 shares at an average cost per share of $18.97, which equates to a 10.12% dividend yield considering the $72.96 in net annual forward dividends added by this transaction. Investors can learn more about why I'm comfortable with the stock in this recent article.

Concluding Thoughts:

Though they are rare when a portfolio is properly constructed, dividend cuts are a (painful) part of the game. Fortunately, there are plenty of great businesses in which the proceeds can be redeployed.

Thanks to $17.74 in dividend increases and my swapping of WPC for ARCC, my net annual forward dividends grew from just shy of $4,230 at the start of October to nearly $4,260 heading into this month.

Discussion:

Do you own WPC? If so, what are you doing with your shares following the news in late September?

As always, thanks for reading and please feel free to comment below!