Another month down. Holy smokes, we are only two months away from 2016. Man oh man does time fly by. Kind of scary when you think about it. Now that October has come to an end, it is time to put together my monthly dividend income summary and dissect one of the best feelings out there…receiving a dividend for doing absolutely nothing. Without further ado, let’s review my October dividend income summary!
Dividend Income Summary
This October, I received $105.92 in dividend income from seven companies, representing a 5.05% increase from last quarter when removing the Kraft special dividend and a 9.78% decrease from last year (More to come). Talk about a boring month! I did not receive a single dividend form a new company this month when compared to July, which is funny considering all of the purchase activity I had in the third quarter (like Lanny and many others in the community experience). Essentially this month was a textbook example of the wonderful power of re-invested dividends as many of the dividend increases shown above were a result of new dividends on re-invested shares. I love it!
The table above shows some interesting activity that contributed to smaller than anticipated dividend increase for the quarter and year. First, the largest impact is the lack of dividend received from Kraft-Heinz during the month. No, I am not talking about the massive special dividend received from Kraft in July that resulted in over $600 in one-time dividend income for me. I removed this transaction so I could assess the growth in recurring dividend income during the year. Typically we receive our quarterly dividend from Kraft on the last day of the month. However, following the merger that was completed in July, the newly formed Kraft-Heinz company has yet to announce their quarterly dividend. Will it come in November or December? Who really knows? I am assuming the company will use their upcoming earnings release, which is scheduled the first week of November, to set the new company’s dividend schedule and hopefully announce a dividend increase in the process. Let’s keep our fingers crossed!
The lack of receiving a dividend from Kraft was a major contributor to the smaller than anticipated I results that I experienced. However, I am looking forward to receiving a nice boost in whatever month the company decides to begin paying again. A few other items worth noting. For the quarter to date comparison, the lack of a dividend from Kraft was bolstered by the receipt of Diageo’s semi-annual dividend. Luckily for me, DEO’s dividend in October was greater than Kraft-Heinz’s so I was still able to experience a bump in income. Unfortunately, I wasn’t as lucky in my year to date comparison. The loss of a dividend from Kraft-Heinz and ARCP, which I happily sold in January, was too much to overcome. Oh well. It is all relative as the important thing is that my money ARCP capital was spilt into three stronger dividend paying companies: HCP, NWFL, and CZNC!
Dividend Increases
October was a very fun month for me in terms of dividend increases. First, let’s talk about my favorite of the month. KMI increased their dividend again from $.49/share to $.51/share. In total, KMI has increased their dividend 16% during 2015…amazing! The earnings release that announced the earnings release also painted a bleak short-term picture, causing the stock price to fall and create a great opportunity for dividend investors. Both Lanny and I used this as an opportunity to lower our cost basis in the investment and buy a few more shares. For me, this purchase was huge as it allowed me to cross two cool investing milestones! And for Lanny, well, his purchase was huge because who doesn’t love increasing their position in a company like KMI that pays a great, raising dividend??
But KMI was not the only company to increase their dividend this month. After the last few months which have resulted in minimal or no dividend increases, October was pretty action packed! AEP, an Ohio based utility company, quietly increased their dividend $.03/share quarterly, or 5.6%, from $.53/share to $.56/share. This increase added $2.75 in annual dividend income to my portfolio. Aflac also announced a dividend increase, increasing their quarterly dividend $.02/share quarterly, or 5.1%, from $.39/share to $.41/share. This added $2.50 in annual dividend income to my portfolio. I’ll never complain about a dividend increase and these increases outpaced inflation. However, they weren’t anything to write home about either, continuing a trend of large companies announcing smaller than typical dividend increases.
Last but not least…the Golden Arches. It is hard to be upset with the company considering the stock price’s appreciation in October. However, similar to last month, we are still waiting for that darn dividend increase announcement. Periodically I will read a few articles about McDonald’s converting to a McREIT, which would definitely explain the lack of news on their dividend. So I am sure we will have our answer to the dividend mystery once management decides on the structure. I’m impatient though, so hopefully the announcement from this foundation stock is sooner rather than later.
Summary
Another exciting month of dividend investing is in the books. Once again, I can’t complain as this money was earned by doing absolutely nothing! I love dividend investing for that reason and couldn’t be happier that I am now receiving over $2,500 in projected dividend income annually. Looking ahead, November should be an even more exciting month as we are expected to receive a dividend increase from Emerson Electric, which I had amassed a large position in over the last few months as this stock on my Always Buy list continued to see its stock price fall. Hopefully everyone had a great month and is enjoying their Halloween weekend
Did you have a great month of October? What are your thoughts on KMI? Did you buy more shares or are you letting the dust settle? How did the dividend announcement impact you? Do you know what the heck is up with McDonald’s and their dividend announcement?
-Bert