One month down, eleven more to go in 2015! Man does time fly. January has been quite the active month for me, as I have been slowly (but surely) adding dividend income to my portfolio through a series of small purchases. While this won’t impact January’s income, I am setting the table for the remaining eleven months of the year. After having a lot of activity in 2014, I am expecting to start the year off on the right foot and have a solid dividend month. Let’s dive into the results and see how I performed in January.
Dividend Income Summary
Coming off of a record dividend month in December, I knew my dividend income for the month was set to decline as I wouldn’t be able to replicate that performance until December 2015. The exciting part is that I saw some significant year over year improvement as this month, I received $80.89 in dividend income. This represents a 190% increase from January 2014, as I only received $27.85 during the same period last year. Unfortunately though, my dividend income decreased 31% from the October (the first month in the fourth quarter) due do several major transactions in my portfolio, which I will discuss later on.
Dividend Income- January
As you can see in the chart above, January’s dividend income had a lot more deletions than additions. First, DEO is a semi-annual dividend payer and pays their dividend in October and April. Not receiving a dividend from the alcohol giant was expected due to this pattern, so seeing a $0 next to their name was not shocking. The great news is that DEO is set to announce their April dividend payment at the end of February, so Lanny and I have something to look forward to at the end of the month. Hopefully we will have a pleasant surprise! The second item was that my mutual fund that pays a monthly dividend, OIEIX, actually paid their dividend on December 31st instead of at the beginning of January. The amount is immaterial as the monthly dividend is less than $3. But still, I would have rather shifted the dividend income to January since I receive less this month. Come on OIEIX!
The last transaction that caused my January dividend income to decline compared to October was the decision to sell ARCP at the beginning of the month. With the sale, I reduced my monthly dividend income significantly, as I was receiving over $15/month from ARCP. There were many reasons to sell ARCP (As I discussed in my article last month) and I am very happy I did; However, since ARCP provided me with over $186 of dividends annually, there will be a void each month that will need to be filled through additional purchases. Challenge accepted! I can’t wait to re-allocate my cash and find better and stronger companies to add to my portfolio. I have a few moves lined up, but I can’t disclose them yet to the community. The only person who knows is Lanny, so good luck getting the information out of him!
Not all the news was negative. I did receive dividends from a new company this year, as I purchased 5 shares of Canadian Imperial prior to its ex-dividend date. This was only my initial purchase of CM, as I later bought 4 additional shares as the price continued to fall. However, this second purchase was after the ex-date, so for this month, I had to settle with only receiving dividends for 5 of my 9 shares. Oh well! Going forward, I will also be receiving dividends from Schlumberger during the first month of the quarter due to my multiple purchases over the last month. SLB is a low yielding, high growth stock and will pay me a quarterly dividend of $10.50. I wanted to purchase SLB to take advantage of both the tumbling stock price due to crude oil and the expected dividend increase that was set to take place this month. When the day finally came, SLB’s management team did not disappoint. The company announced a 25% dividend increase! It’ll be a nice treat to start receiving additional shares via DRIP come April. Welcome to my portfolio SLB!
Conclusion
Even though I took a step back from October, I am ecstatic that my dividend increase has grown so much in a year. The hours spent finding great investments last year and my efforts to invest every dollar possible last year are finally paying off. Over one year, the snowball has grown and is finally beginning its journey down the hill towards financial freedom. Now, on to February!
How were your months? How much has your dividend income grown since January 2014? Do you recommend any stocks that pay their dividend this month that are not in my portfolio?
Bert