February, coming in hot! Or… still freaking cold. Dividends still come through to keep things exciting for the short month. The stock market has continued to be on a tear, making it hard for additional investment. I know I am preaching to the choir. Let’s see how I did and check out my February 2019 dividend income.
Dividend Income
I received a total of $628.48 of dividend income in February. Setting another dividend income record for the month I’m reporting on and typing that out NEVER gets old. Additionally, my wife earned $140.02 this month and I am still debating on how to incorporate that into the analysis, which I don’t mind this problem, right? Therefore, combined we earned almost $800 for the month! Further, the 401(k), Health Savings Account (HSA) and all dividends are automatically invested/reinvested and helps take the emotion out of timing & making a decision. Also, to find out why I max out my 401(k) and HSA – please refer to the 3rd part of my tax series, (I have had 2 contributions now, since I have been allowed to contribute to the 401k since 2/8/19) as that describes the magnitude of benefits to increase the amount you can invest due to reduction in taxes. Here is the breakdown of dividend income for the month of February!
Whenever that AT&T (T) dividend comes in, I laugh. It’s massive and when they are trading around $30-$32 per share, you know that reinvestment is strong! WestRock’s (WRK) dividend is coming in real strong and Caterpillar (CAT) is showing some life. I hope CAT has a dividend increase this year, fingers are crossed. Procter’s (PG) dividend is getting bigger, to say the least. Overall, not too shabby for February.
I have split out between the individual stock amounts and the retirement accounts, as the ” – R” indicates a retirement account dividend (or the furthest column to the right). I separate these two, as I like to know what portion of my dividend income is coming from those retirement accounts that I cannot touch until 59.5 (barring any other usage rule I could use). Here, it shows that I received a total of $286.75 (up from $171.67 last year) or 45.7% of my income from retirement accounts and the other 54.3% was from my individual taxable account portfolio. This ratio increased from last year due to the special dividend from Citizens & Northern (CZNC). Lastly, this shows from retirement accounts that I’m all ready for my set it and forget it mentality to keep that income going. To see my portfolio – one can go to our portfolio summary page.
Dividend Income Year over Year Comparison
2018:
2019:
Now, I will compare the previous year’s linked month to this month. Again, another incredibly high growth rate, as my dividend income was up 62%! My goal is to be well over $800, if I can, in dividend income next year. An extra $200 higher is going to be a massive effort and I’m ready to take on the challenge. Of course we have new names, WestRock (WRK), Starbucks (SBUX) and AbbVie (ABBV). Further, Outside of CVS, every dividend income producing stock increased their dividend. CVS – you better change that in 2020. The remaining increase in the taxable account was due to dividend reinvestment, the final leg of the trifecta (the other two are new capital and dividend increases).
Dividend Increases
A month wouldn’t be a month without high quality companies increasing their dividend! See the small chart below for the details on the dividend increase announced this month from my portfolio.
What isn’t listed here that serves cheese, hot dogs and ketchup? Yes, the dividend CUT from Kraft-Heinz (KHC) is not listed here, which REDUCED my forward income by $46. I don’t even want to keep talking about it, so I won’t. It stings, as it completely washes out this growth above. The dividend increases above represent an investment $943.71 at 3.50% to accomplish this feat. Thus far, two stocks have cut their dividend in my portfolio, Kraft and Tupperware (TUP).
Dividend Income Conclusion & Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live a balanced life. My plan is to show that dividend income can be a revenue engine. A revenue engine that can allow you to take back control of your life. Dividend investing, once you learn the right way, becomes easier and starts to make quite a bit of sense!
There is a nice adjustment to my most recent monthly expenditures article. My property taxes increased by 14%. Therefore, my new average is around $1,040 per month, on the mortgage/property tax/insurance. Therefore, my current dividend income would cover almost 55% of my average $1,040 monthly expense, which includes the mortgage, property taxes, insurance and utilities. Climbing, but not quite there, over halfway (at least). In similar fashion – all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has allowed promising results already this year.
I have tweeted about this, but gosh damn, give me some warm weather. I need that so bad, maybe warmer weather will make stocks go down, as obviously, cold weather has popped up pricing! In all honesty, I cannot be any more thankful for this journal, community and being able to share this with everyone. I truly hope that you can see the power of this, in hopes of brightening your financial journey. Thank you again, good luck and happy investing!
Lanny,
Nice month there. Are you planning to dump TUP / KHC? Right now I am holding KHC and TUP is gone. Also will you continuing using DRIP for your stocks or do you think you will shift to a cash collection / selectively redeploy mode?
– Gremlin
Gremlin –
Thank you – my position is so small on TUP, I’m torn about what to do – do I peel the bandaid or do I just let it go? Any reason why you are holding KHC?
That’s a CONSTANT debate for the DRIP! It’s hilarious you brought it up actually. I always veer to – I can’t time the market, you know? So I let it DRIP. You?
-Lanny
With TUP – I say peel. I can get items just as good if we get Chinese take out…
KHC – They are what the 2nd biggest food company in the world? A recession will happen, they will survive, they pay down debt, then they will buy organic gen Z food companies.
I feel the same way as you, but I say no DRIP. For instance I have MSFT, who is awesomely overvalued, so the DRIP there right now would not be worth it. I like to let it all pool then get mixed with new cash to buy more stocks. I think the long term difference between the two is marginal, but it allows me more cash to make major purchases sooner. Also I can selectively place that cash in whatever is the most desired or undervalued stock to me at the time.
Gremlin –
Love your right to the point attitude. I agree with KHC – TUP is hilarious – as you are right, I think I do have 10 containers saved from takeout… hmm..
DRIP is always tough… but if you have free trades, then that’s another moot point, you know? If you don’t have to pay $3.95-$9.95 for a trade, then you turn DRIP off and can deploy any amount of capital to the most undervalued stock. Such a decision. Dammit!
-Lanny
Still looks like a great month even though you had the KHC cut. The beauty of dividend growth investing is that you had 5 other “workers” to help pick up the slack from KHC. All things considered that’s not that bad. That dividend from T is huge and should give you over 3 new shares through reinvestment from this payment alone.
JC –
You are right, you are damn right – that’s why you build the army and own more than one company. 2019 is far different and it’s been a while since I’ve experienced cuts, RIP KMI and BBL… back in those days. Woof.
-Lanny
Ugh, I got caught by that KMI cut and that one stung a lot. It was my largest position at the time but I was taking the dividends and putting it with fresh capital to diversify. Sadly it didn’t last long enough for that cut to not hurt.
JC –
Oh yeah, that one I will never forget. KMI is getting back to right size the ship, it’s been an interesting journey with them.
-Lanny
Bam!
wow Lanny that is a massive year over year growth rate. Seriously impressive at that high of a income.
The Kraft thing still seems suspicious to me. Will warren try to take them private? They have definately done a good job at crashing the market value.
Keep it up man, doing great!
PCI –
Yeah… talk about interesting, something rare from Warren’s team. What’s interesting – is what 3G is known for. Who buys Maxwell? A brand that I still see people drinking at their home, honestly. I am sure it can’t be doing that bad, right?
I’d love to have over $1k in these months, getting closer…
-Lanny
Yet another solid month of DGI flexing its muscles. I’m also hoping CVS can come through with a raise next year. Keep making every dollar count like I know you will!
Kody –
Bring on CVS baby!!! Pumped to see their machine crank out earnings. I am hoping they are underpromising on 2019 and they over deliver.
-Lanny
Awesome, each month is starting to look better and better. Keep up the great work.
An increase to the same amount as investing $900 of fresh capital? WOW now that is awesome!
BHL –
Gracias! Thank you, dividend growth is real, what can I say? Love the engine behind it!
-Lanny
Great month Lanny and it’s nice to see that you are moving to the right direction. Achieving 62% increase from such a high base last year is impressive!
That cut from Kraft-Heinz looks like a small bad thing compared to how many good things are happening at your review 🙂
P.S. KHC was on one of my watchlists last year but I decided to go for Pfizer instead after conversation with my wife then. It was a great investment advice, as it turns out 😀
Good luck!
BI
BI –
Thank you very much! I appreciate it. It was a sting, but hope they bounce back. Congrats on the PFE : ) Smart move!!!
-Lanny
A great month. CVS is dropping sharply recently. Have you any plan for it, such as buying more?
DSFI –
Stay tuned for a new post ; )
-Lanny
Super month Lanny! Isn’t the dividend from T just great? Great dividend increases as well! Keep it up! 🙂
MDD –
Always nice to see a triple bagger when receiving income. Lucky and fortunate, the reinvestment wheel with T is real, as well. Crazy how flat they’ve been.
-Lanny
First of all – I don’t wanna hear you Americans complain about the weather anymore…come up to Winnipeg in January and I’ll show you cold 😛
We had -50 for a few days with the windchill…haha
Secondly – damn man…you are almost covering your mortgage and utilities/taxes with ur passive income….That’s insane. Keep it up man. Nice to see your wife getting in on the action too!
Jordan –
Damn, I bet it has to be awful, I don’t even know what that feels like. We came close, but def. not -50.
I would love it if my income were a bit higher, I’d love to be free, what can I say? Gosh, so close, yet so far. AGH!
-Lanny
Nice work, Lanny! $628.28 is an amazing haul of dividends! I really like your idea of creating a revenue engine. I could see how it could begin to help you take back control of your life. Looking forward to future reports! Thanks for sharing!
RTC –
More income, with maintaining/wanting to knock down expenses, will equate to control of time. I need to outpace the income vs. expenses, that’s for damn sure.
-Lanny
That T dividend is a monster and with reinvestment you will be buying several shares at a time each quarter. Have to love that type of compounding. I still would like to boost my SBUX a bit but won’t buy at current levels. I’ll wait for that inevitable stumble. Keep those dividends rolling in… Awesome Feb. report!
Hut –
Thank you and you’re right, the few shares is great and keeps on snowballing into more shares and more income. Would love more SBUX, but yep, they’ve popped up fairly high. Lets get it DH!!!
-Lanny
Good job on the dividends. Just incorporate your wife’s in there or you can do like Bert did and designate it with a W. Cuts do hurt and stink but when you hold stocks long enough that higher debt that will happen. We try to avoid it but if it makes the company better in the long term then it’s wortv it. Most of the time I see companies cut to late. Plus KHC is run by 3g which to me seems bad for a company as they generally look to cut companies bare bones.
Hopefully you get a good dividend increase later to make up the loss. Keep it up.