Lanny beat me to the punch for releasing our monthly dividend income summary and lets just say I have a tough act to follow. $1,100 in total dividend income and a 30.31% dividend growth rate…impressive numbers Lanny! You are crushing it. However, the show must go on here and luckily for me, I had some nice year over year growth as well. Time to peel back the layers and take a dive into my June dividend income summary!
June dividend income summary
This month I received $447.03 in dividend income, which represents a 56.58% dividend growth rate from the previous period! At least I beat Lanny in the dividend growth rate category. Below is a detailed breakdown of the individual companies that paid me a dividend during the month and some observations about the month!
Woah that is a long, growing list of companies! I received dividend paychecks from 20 companies and mutual funds this month…aka 57% of the holdings. Just goes to show you how top-heavy the third month of every quarter is. I mentioned above I had some observations about my month, so here they are:
- Three of the five largest dividend checks I received this year were from positions I have initiated in the last 12 months. Two of which, TROW and PFE, were purchased during 2016. The large dividend checks from these three companies reflects a change in investing methodology I have beginning to follow (ever since Lanny talked me into it at the end of last year). This philosophy is trying to initiate large positions in companies, ideally $3,000+. The larger dividend checks help get the dividend snowball rolling that much faster as larger checks create larger DRIPs, which creates more forward income.
- The move to sell 3 higher fee mutual funds and invest those funds in individual stocks really paid off for me in terms of consistent dividend income. In June 2015, I received $16.58 in dividend income from the funds. When I sold the funds, I used the capital to purchase all of my Pfizer position and about half my TROW price position. That equates to $43.09 in dividend income from the re-invested position, or a 160% from the prior period. Of course I forfeited the massive capital gain distributions that the funds pay out at the end of the year, but I am happy to sacrifice that for a more consistent dividend income stream!
- Last year I created a list of 5 “Always Buy” stocks to buy in the event of a flash sale. I flagged those companies because I fell in love with their dividend metrics and history of consistently increasing their dividend. After looking at the listing above, I realized I have purchased 3 of the 5 stocks in the last 12 months (MMM, JNJ, and EMR). Further, I just purchased a fourth a few weeks ago when we purchased 50 shares of TGT!
- This last point isn’t as obvious, so hang in there with me. I received a benefit because of my employer’s 401k match from the previous year, which validates the powerful impact the 401k match can have on your dividend income and retirement plans. In the first go around with my employer, I always invested in the mutual fund VWNAX (now I am building a position in another mutual fund VINIX). VWNAX actually paid a lower dividend this quarter compared to last; however, because I received additional shares with my employer match and re-invested dividends from last year, my YOY dividend income from the fund actually increased!
June dividend increases
On a technicality I received one dividend increase this month. As Lanny pointed out in his article, Target announced a 7% dividend increase during the month. However, I did not actually own TGT at the time of the announcement and purchased shares in the company a few weeks later. For fun though, I’ll pretend I received an increase to avoid putting none in this section. June just isn’t a popular month for companies to announce dividend increases
Conclusion
Comparing my dividend income to the previous year is always a humbling experience for me. You forget how quickly each move you make, each dollar you save, and each dividend increase impact your dividend income. We are so focused on the individual transaction level that it is easy to forget how much has been accomplished over a longer, 12 month window. The amount of new companies that paid me income this year compared to the last serves as motivation to keep on grinding, saving every dollar possible, and getting that dividend income rolling as soon as possible. Now, that June is over, it is officially time to kick off the second half of 2016! LET’S GO!
How were your months of June? Do you own predominately dividend paying stocks or mutual funds? How many new companies paid you dividends in June 2016 compared to June 2015? Did you set a record this month?
Bert