June is coming to a close and you know what that means….we are officially halfway through 2015! That’s right, our year is nearly 50% completed. Are you kidding me?? It seems like just yesterday that I was writing my 2015 goals article and trying to scheme about how I am going to knock these goals off. This month is one of my favorite dividend months as most of my portfolio pays out in third month of the quarter, so this is always one of my favorite articles to write! Let’s see how I performed in June and if I was able to knock of Lanny, who had one heck of a month as well racking up nearly $850 in dividend income!
Dividend Income Summary
In June, I received $282 in dividend income, an increase of 37% compared to June 2014 and 97% compared to March 2015. However, I must say, the June to March comparison is very skewed because my portfolio’s largest holding, VWNAX (my employer’s 401k plan) pays a semi-annual dividend in June and December. The true comparison lies in the YOY comparison, and I am pretty pumped about a 37% increase. What drove this increase? Let’s take a look.
- As I mentioned in the last paragraph, the largest driver of this increase was my 401(k) retirement plan. The increase in the dividend from the plan alone was almost $43, and this increase was the result of another full year of 401k contributions. My share count jumped as I was pumping in 5% of my salary twice a month. What’s funny is that the actual dividend paid decreased this year, from $.834/share in 2014 to $.758/share in 2015. Luckily my dividend income did not skip a beat and I was able to withstand the decrease because of the increased share count.
- I received dividends from 6 new contributors compared to June 2014 and 3 new contributors compared to March 2015. This quarter has been very active for me and it seemed like a lot of my new additions paid a dividend on June 10, 2015. Luckily for me, I was able to catch some of the stocks prior to their ex-dividend date and receive a dividend in the first quarter I owned the stock. The additions during the quarter accounted for ~$28 in dividend income, or nearly 10% of my total dividend income for the month. Here are the stocks that I received a dividend from for the first time this quarter:
- Chevron – $10.70. Purchased in March.
- Norfolk-Southern Corporation – $9.63. Purchased in both April and May.
- Archer Daniels Midland – $7.53. Purchased in April.
- Lastly, and my favorite, my dividend income increased as a result of the power of dividend reinvesting. There is nothing better than watching your income from a stock increase as a result of doing NOTHING. Music to our ears. This is why we invest as soon as possible, so we can get the power of dividend reinvestment rolling as soon as possible. I won’t go into detail about this, but check out the table above to see.
Dividend Increases
Similar to last month, this was a relatively quiet month in terms of dividend increases. I received one increase this month from Canadian Imperial. And as Lanny mentioned in his article, CM increased their dividend $.03 (CAD) which resulted in a dividend increase of $.60/quarter. I’ll take it! Sure as heck beats a $.00 increase. Man am I getting tired of these boring months with barely any dividend increases though…oh well, especially considering the impact dividend growth rate has on your portfolio and forward dividend income. But as I look ahead, the second half of the year should be pretty fruitful for all of our portfolios!
Summary
June is by far my strongest dividend month outside of December (when all mutual funds hand over their capital gains to their shareholders) and I am pumped that I as able to realize a 37% YOY increase. If I keep up my current pace, I should eclipse $300 next June. Boy would that be sweet! This is why I love investing and this is what it is all about. Growing your dividend income stream and pushing yourself so you could reach financial freedom sooner and spend as much time as possible with those you love. I can’t wait to read all of your income articles this month, so hopefully Lanny is planning another blogger dividend income summary like he did in May!
How did you perform this month? Were your mutual fund distributions greater r less than you anticipated? What stocks did you receive income from for the first time in June? Do you think I rely too heavily on dividend income from my employer’s 401(k)?
-Bert