Only four spreadsheet entries to report for May, so this month’s update will be brief. Projected annual dividend income broke through the $7,600 and $7,700 barriers!
|Date||Total Annual Dividends||Notes|
|5/26/2017||$7,702.50||With approximately $460 in accumulated cash dividends in IRA Rollover account #1, bought 8 shares QCOM, raises meter reading $18.24|
|5/4/2017||$7,684.26||PEP dividend increase, raises meter reading $3.36|
|5/4/2017||$7,680.90||Sold 25 WM, deposited $1,000 towards Roth IRA (completes 2017 contribution), and added $60 in accumulated dividends to buy 76 UFS, raises meter reading by $83.66|
|5/2/2017||$7,597.24||AAPL dividend increase, raises meter reading $18.00|
The largest dividend income increase, $83.66, came from adding a new $1,000 cash deposit to a Roth IRA, selling 25 shares of Waste Management (currently yielding about 2.3%) and then using the total proceeds to buy 76 shares of Domtar Corporation (symbol: UFS). Domtar currently offers a dividend yield of approximately 4.4% and is a new position for the Dividend Meter portfolio. In addition to producing numerous paper products, Domtar also makes many disposable, recurring-purchase items such as medical gowns and diapers, including adult incontinence products, which could be a growth opportunity for the Company. After a few years of declining revenue, UFS needs to find a growth catalyst to replace lines of paper products that continue to be digitized.
With 2017’s Roth IRA now fully funded and no additional deposits planned for the rest of the year, increases to the Dividend Meter income stream will need to come from dividend increases, reinvestment of dividends, and strategic sales of low-yield stocks with accompanying buys of higher yield opportunities. Be sure to check in regularly for updates and have a great summer.
It’s time to check out the Dividend Meter Spreadsheet to see what happened in April. Here’s a summary from the History tab:
|Date||Total Annual Dividends||Notes|
|4/28/2017||$7,579.24||Sold 30 WM, used proceeds and approx. $250 in accrued cash dividends to buy 36 CMP in IRA Rollover #2, raises meter reading by $52.68|
|4/27/2017||$7,526.56||AVY dividend increase, raises meter reading $3.20|
|4/27/2017||$7,523.36||JNJ dividend increase, raises meter reading $13.92|
|4/19/2017||$7,509.44||OHI dividend increase, raises meter reading $11.04|
|4/12/2017||$7,498.40||Added $2,000 to Roth IRA towards 2017 contribution, bought 25 PII, raises meter reading by $58.00|
Compared to last month’s meter reading, total annual projected dividends rose $138.84 in April. Two new positions were added to the portfolio (identified by the Watch List as trading in their respective high-yield dividend zone): Polaris Industries (ticker symbol: PII) and Compass Minerals International (ticker symbol: CMP).
Polaris Industries makes snowmobiles, jet skis, motorcycles (heard of Indian motorcycles?), and other off-road vehicles. In addition, the Company sells parts and apparel related to recreational vehicles. PII’s stock price has been depressed the past months due to numerous product recalls; however, Polaris keeps growing revenues. After studying the historical dividend yields for Polaris, a buy-yield of 2.9% and a sell-yield of 1.8% were set for the Dividend Meter Watch List. When Polaris’ stock price recently dipped into the upper 70’s and low 80’s in April, it was showing a dividend yield of 3% and became a buying opportunity. 25 shares of PII were purchased with a cash deposit of $2,000 towards a 2017 Roth IRA contribution (only $1,000 left to contribute for 2017!).
Compass Minerals International, Inc. produces salt products (primarily road deicer salt) and plant fertilizers. The Company has raised its dividend each year for twelve years in a row, and examining the yield charts, appears to be a good buy when the yield is over 4% (For the Dividend Stocks Watch List, the buy-yield is set to 4.1% and sell-yield at 2.5%). To fund the purchase of CMP, 30 shares of Waste Management (WM) were sold from the portfolio. Waste Management has been such a great investment – it’s a difficult decision to sell any shares of WM, but the stock has run up significantly over the past few months and is trading near a historically low average dividend yield. Fortunately, 90 shares of WM are still held in the Dividend Meter portfolio.
Looking Ahead to May
Barring any surprise dividend cuts, the meter reading for the Dividend Meter portfolio should break the $7,600.00 barrier in May. Tomorrow, May 2nd, Apple (AAPL) will report quarterly earnings and will likely announce a dividend increase also. Apple’s share price has steadily increased during the past few months and has reached the Spreadsheet’s sell-yield signal of 1.6%. With a new dividend increase, Apple’s yield should move above 1.6% and all shares will continue to be held in the portfolio. Good luck to all with your investing and be sure to check in again next month.
No April Foolin’ – the Dividend Meter broke through the $7,400.00 barrier in March! Here’s a summary of last month’s activity which resulted in an increase of $179.32 in annual dividend income:
|Date||Total Annual Dividends||Notes|
|3/22/2017||$7,440.40||Bought 29 shares of F in IRA Rollover #2 with just over $300 in accumulated cash dividends, raises meter reading $17.40|
|3/21/2017||$7,423.00||With $800+ in accumulated cash dividends in IRA Rollover account #1, bought 14 shares of QCOM, raises meter reading $31.92|
|3/13/2017||$7,391.08||Added $1,500 to Roth IRA towards 2017 contribution, bought 30 DIN with new deposit and some accumulated cash dividends, raises meter reading by $116.40|
|3/7/2017||$7,274.68||QCOM dividend increase, raises meter reading $13.60|
DineEquity, Inc. (DIN) is a new addition to the stock portfolio and an investment idea that came from the Dividend Meter Watch List. DineEquity operates and franchises two popular restaurant brands: IHOP and Applebee’s. The stock has plunged nearly 50% from a 52-week high of $94.30, trading recently around $55 per share, with a current dividend yield over 7%. While business has remained steady at IHOP, performance at Applebee’s has been disappointing, and upper management has recently left the company. DIN is definitely a speculative high-yield play – let’s hope new management can turn the ship around and keep the dividend intact.
Real-life Dividend Snowballs
Last month, a member of the Dividend Meter community used the term “snowball” to describe the compounding effects of dividend growth investing. With regards to the Dividend Meter portfolio, a snowball is beginning to form, but it’s not quite rolling downhill…..yet. Until next month’s update, I wanted to leave you all with a few motivating real-life dividend snowball stories:
Another month gone by and it’s time for a quick Dividend Meter update. Four dividend hikes and a small transaction during February raised the annual dividend figure of the portfolio by almost one hundred dollars compared to January’s meter reading. Here’s the notes from the spreadsheet:
Total Annual Dividends:
|2/23/2017||$7,261.08||KSS dividend increase, raises meter reading $10.60|
|2/22/2017||$7,250.48||ETN dividend increase, raises meter reading $18.84|
|2/14/2017||$7,231.64||Sold 30 WM, bought 40 QCOM with proceeds and approx. $100 worth of accumulated cash dividends, raises meter reading by $33.80|
|2/14/2017||$7,197.84||DPS dividend increase, raises meter reading $12.20|
|2/7/2017||$7,185.64||PPL dividend increase, raises meter reading $16.14|
One of the most comforting benefits of dividend growth investing is watching your annual income rise without making any new deposits. Due to other personal financial commitments in 2017, new deposits to the Dividend Meter portfolio will likely be limited to the maximum annual Roth IRA contribution figure of $5,500.00, ($1,000.00 contributed so far, $4,500.00 to go!). It will be interesting to see where the meter reading ends up at year-end with limited new savings – the majority of growth will come from dividend increases, re-investment of dividends, and a few strategic sell/buy transactions. Be sure to check in regularly to see how the portfolio is progressing, and good luck to all in March.