Not only have the markets been see-sawing, but so has the weather here in Cleveland. From snowing one day to 50 degress the next day, it is wild! Luckily though, spring training has started and baseball season is right around the corner. Hopefully the Indians get off to a hot start. Speaking of hot starts, Lanny kicked off our dividend income summary by showing how he and his wife earned almost $900 in dividend income in February and notch a 17% annual growth rate. Now, it is my turn. Lets jump right in to my February dividend income summary.
Dividend Investing is amazing for so many reasons. As we continue to build a growing, passive income stream by investing in undervalued dividend growth stocks identified by our dividend stock screener, it is always important to track your progress and make sure you are achieving your goals. Seeing the progress makes the income feel real. And it motivates us that much more to reach financial freedom.
See – Our 3 Step Dividend Stock Screener that helps us identify undervalued dividend growth stocks
Further, dividend investing is very tax efficient. Capital gains are taxed a lower tax rate than your regular wages. So ask yourself this. Why wouldn’t you want to build a growing, passive income stream that is taxed more efficiently than “regular” wages. To me, it makes all the sense in the work.
Read – Dividend Tax Rates Explained
Hopefully you can see why we are relentlessly pursuing financial freedom. For the last five years, we have logged each monthly dividend income total on our “Dividend Income Page.” You can see first hand the results that each dividend stock purchase, dividend increases, and reinvested dividend have earned. That is why I am always so excited to type up my monthly dividend income summary. To review the results and hold myself accountable.
See – The Individual Holdings in Our Dividend Stock Portfolios
Bert’s February Dividend Income Summary
In February, my wife and I received $534.17 in dividend income! That was a 15.9% growth rate compared to last year! Here is a detailed listing of the stocks that paid us a dividend in 2020 versus 2019:
Here are some thoughts and highlights from the month:
- Interestingly, I did not receive a dividend from a new company this month. Every dividend received was from a company that paid me a dividend last year. What are the odds of that? Especially with some of the purchases made at the end of last year and beginning of this year!
- The increase was aided by several large purchases in 2019 where I decided to add to positions. ABBV, CVS, and WRK all saw large dividend increases due to the fact I focused on building these positions in 2019.
- Yes, I did receive a smaller dividend from Citizens and Northern this month. No, it wasn’t due to a dividend cut. The company paid a $.10 per share special dividend in 2019.
- It sure is fun to see the dividend increases posted from KMI. Their dividend cut feels like a distant memory, because management is delivering on their promise to increase their dividend after they cleaned up their balance sheet.
- Other than that. This was a “boring” month. The Power of Dividend Investing sure flexed its muscles.
Bert’s February Portfolio Update
In this section, I like to discuss the impact of stock purchased 401(k) contributions, and dividend increases had on my portfolio and forward dividend income. Typically, I include a chart showing the impact of each. However, due to the crazy end of February, that saw the stock market plummet, I am going to forgo listing out each individual dividend stock purchase. Rather, I’ll save that for a purchase summary article that I will release later in the month. I don’t want to spoil the surprise. But I had to have added a record level of dividend income due to stock purchases and dividend increases…stay tuned!
Now, I’ll show the impact that dividend increases had on my portfolio. Dividend increases are the heartbeat that keeps our passive income stream flowing. They help us increase our dividend income without lifting a finger. Man, following dividend increases and tracking the impact (big or small), is so much fun! In February, I received the following dividend increases:
8 dividend increases. Just incredible. 8 companies increased their dividend payouts to me. Now, my wife and I will earn another $72 in dividend income without lifting a finger. Man oh man it is sweet. I talked about the dividend increases in greater detail in my month “Expected dividend increases” article (where I summarize the previous month’s dividend increases and predict the next month’s dividend increases). The largest dividend increase I received was TROW price. I was expecting a double-digit percent increase; but man did that one knock me off my feet.
Sure, unfortunately, some of the other dividend increases didn’t have a large impact on my forward income. Going forward, I’m not expecting large dividend increases as the impact that the coronavirus has on the global economy becomes more clear. It’ll be an interesting story to follow over the next few months, that’s for sure.
Where do I go from here? First, I’m excited about the growth. Crossing $500 again in the second month of the quarter was huge for me. Hopefully, now, I am firmly past this milestone and am looking forward to the next one ($750 and then $1,000). I would love to start building up all of my months of dividend income so I can build a steady, smooth dividend income stream. But that’s a story for a different day and more dividend income.
For now, I’ll continue to focus on building my dividend portfolio one dividend stock, one Dividend Aristocrat at a time. I’ll continue to screen and find those undervalued stocks. More importantly, I want to get better about simply acting when the metrics are right. I was aggressive in February and want to continue to be just as aggressive in March and the rest of 2020.
How did you perform in February? What was your annual dividend growth rate. Did you purchase stock in February when the market fell? If not, are you waiting for more information and more down days?