As a great band once said….”Another one bites the dust.” Another month bites the dust and we are now entering May. April was a crazy month that consisted of more transactions than I can remember for a while, the capstone of which was my investment in one of the largest railroad companies Norfolk Southern. Unfortunately though, I will not be reaping the dividend benefits from these transactions until next quarter. After seeing a minimal YOY increase of 8% in my dividend income in March, I am hoping that my investing throughout the first four months of the year will begin to show in April. Looks like it is time to dive in and review my April dividend income summary.
Dividend Income Summary
In April, I received $110.76 in dividends, a 169% increase from last April. So yeah, I would say i destroyed my last month’s dividend growth rate of 8%! But to be fair, this isn’t an apple to oranges comparison. Most companies pay their dividend in March and the third quarter, so of course a lot of the companies I bought at the beginning of my dividend investing career such as PG, PM, Shell, BP, etc. paid in the third month. But man is it hard to build a dividend stream in an off month, and my share of companies that pay in April and May have grown over the last year as I continue to find new dividend stocks to invest in. It isn’t that they aren’t out there, there just aren’t as many of them. So for the rest of this year, as I continue to invest in new companies, I am expecting double and triple growth rates in the first and second months of the quarter. Sorry, I went off on a soap box there. Back to business, let’s see which companies I received dividends from this month!
Interestingly, compared to last quarter, I did not receive dividends from any new companies. The can’t be said for last year however, as I received dividends from 4 new companies (and of course one less, as I sold my ARCP stake earlier in the year). What major transactions impacted my dividend income for the month?
- I received dividends from GSK. As all other shareholders know, GSK pays an inconsistent dividend that can fluctuate in any given month. The variances are annoying to me, but the pendulum swung my way this month and gave me a nice little bump up from January. And on top of it, I did not own GSK last year, so this dividend represented a 100% increase from April 2014!
- This April represents the first dividend I received from my second stake in PM, which I purchased in March. I picked the perfect time to re-up my position as the stock increased from the high $70s to ~$83. So finally I received the dividend benefit from this transaction.. Congrats to all other dividend investors out there that either initiated a position or re-upped their position in the company!
- The same story can be told for my stake in Canadian Imperial, as I purchased the company twice during the last year. My second purchase was after the January ex-dividend stake, so I missed the cutoff for the first quarter dividend. But in April, I received a dividend from my full position!
- Lastly, DEO represents a new position when compared to last year, as Lanny and I both initiated a position in last August. Even better, this company only pays a dividend semi-annually, so I did not receive a dividend in January from DEO. Hence why you are seeing an increase for both periods in the table above. Now there is one thing I want you all to pay attention to very closely, because I don’t get to brag frequently. But if you look at Lanny’s dividend income summary, Lanny only received $13.00 in dividends from DEO. Why is this important? Because I own one more share of DEO than Lanny (which of course was done on purpose) and received $14.30 in April. So take that Lanny!
Dividend Increases
This month was mixed in terms of dividend increase for my portfolio. The highs were high and the lows were low. To start with the good news, IBM had a phenomenal increase, increasing their quarterly dividend from $1.10 to $1.30! Lanny and I were speculating that the new dividend would be $1.25/share, so imagine how happy we were when we saw what the actual figures were. The increase provided me with $.95 in additional dividend income each quarter. Am I breaking the bank?? No! But I did not have that income at the same time last month! But on the flip side, we were anticipating a nice dividend increase from PG but instead the company announced a rather disappointing increase when compared to previous years. While the good news is that their increase will still classify them as a Dividend Aristocrat, I always counted on them for about a 7% dividend increase. An as we all know, the increase was not at that level. To make it even worse, Chevron, which I purchased at the end of March, was set to announce a dividend increase in March. As each day passed and the calendar eventually turned, I had to accept the realization the Chevron was not announcing a dividend increase this month. Very disappointing, but not totally unexpected given the current oil environment. Hopefully things begin to turn around quickly so Chevron can increase soon! As I said before, I had some highs and lows in terms of dividend increases this month.
Summary
I can’t complain with a triple digit dividend growth, and I hope I can keep this up in the future. Even though this seems unlikely, I should have some new capital from my recent job change which saw my salary increase nearly 20%! My dividend snowball is beginning to grow, which means I am closer to financial freedom! How were your months? Did you see some great improvement? What dividend increases did you receive?
Bert