The first quarter is officially in the books and we have completed one dividend cycle for the majority of companies. 2015 has started off with a bang for me, recording record dividend growth rates in the first two months (190% in January and 79% in February), as my portfolio has grown exponentially since the same time last year. I know that rate is not sustainable and surely will decrease to a lower amount – however, my monthly income will continue to grow nonetheless! After all, the amount of capital needed to sustain a 190% monthly dividend growth rate would be insane! But I am not complaining, I am blessed to be in the position I am in and am happy that I have joined this community that pushes each one of us to continue to grow our income, whether that be 1% or 1400%. It is even easier to push yourself when you have a a friend like Lanny who is killing it in terms of dividend income, as he nearly eclipsed $800 in March. What better motivation is there than watching the success of one of your best friends? With that being said, let’s take a look at the dividend income that I received in March!
Dividend Income Summary
I received my final dividend on the last day of March, fitting, which increased my total for the month to $142.80. When compared to March 2014, this represents an increase of 8.4%. If I were reviewing the growth rates of one of my dividend stocks, I would be very happy – as this increase is greater than my portfolio’s weighted average dividend growth rate. Check out the table below to view an itemized listing of dividends received:
As I said, I am very happy with a dividend growth rate of 8.4% compared to last year; however, with how much my portfolio has grown since last year, I expected my growth rate to be slightly higher. After diving into a little more detail for the month, here are some of the major transactions that have occurred over the last twelve months that shaped the amount of dividends I received in March:
- Last August, I sold my stake in SWM back in August 2014. Man, does it feel like ages ago that I owned this stock. What a funny experience that was, as I took my first step at trying to find a small/mid-cap diamond in the rough. The experience did not end well, as I took a nice loss on the transaction, but it was a great learning experience for me! SWM was a quarterly dividend income payer from March, and I used the proceeds to purchase shares in Diagio. Thus, the dividend income transition from quarterly receipts in the last month of the quarter to semi-annual payments in April and October. The yields are similar, so the dollar loss was not material. The income was just shifted around and caused my March dividend income to decrease.
- I know you all are rolling your eyes with this and I promise I will stop bringing it up soon, but I sold my stake in ARCP in January, which lowered my monthly dividend income by $15-$17 depending on the comparable month. I used the proceeds to purchase three quality dividend stocks (HCP, CZNC, and NWFL) and added $18 in quarterly income. The issue for my March income totals is that all three stocks pay out in February! Therefore, I received no additional benefit in March from these purchases.
- Not all news for March is bad news. This month, I received my first dividend from IBM, which I purchased at the end of 2014. IBM was my first tech purchase and I am excited to see this position grow over the next year through dividend receipt and hopefully additional purchases. I am also excited for this stock because it is set to increase its dividend in April and Lanny and I are all over this announcement! We have some pretty high expectations, so I am sure you all will hear our thoughts once IBM makes their announcement…stay tuned for this one!
- Another new addition was AFL, which was purchased twice at the end of 2014. AFL was my first purchase in the financial sector and has performed well since the purchase.
- Lastly, I received a dividend this year from SMG, which was not purchased until the second half of 2014. The company is a company that is a market leader in a niche industry that can be found in nearly every Americans home/lawn (whether they realize it or not). Lanny found this gem and I was fortunate enough to purchase the stock and receive the large special dividend they paid to investors last year. SMG is not going anywhere in my portfolio any time soon! Great find Lanny.
So as you can see, my growth rate for the month was lower than expected due to various purchases and sales that had an offsetting impact on my income. Again, I don’t mind as the result of many of these transactions resulted in larger dividend income in other months. The important thing is that my dividend income is growing, and I can happily say that it is.
Dividend Increases
Lanny always has this section in his monthly dividend article and you know what…I love it. I, for some reason, never discussed any dividend increases in my portfolio, which is funny considering that is one of the things that we all track the most and we all know how important our dividend growth rate is in the long run. So Lanny, I am sorry, but I am stealing this section from your monthly dividend article! Unfortunately, I am starting this addition to my monthly article out with a dud. I only had one company announce a dividend increase and it was minimal. NWFL increased their quarterly dividend from $.30/share to $.31/share, or 3.33%. This added $.72 to my forward income. Next month will be much better though, I promise!
Summary
All in all, this was a great month for me. I am happy to have received $142 in passive income this month, considering this amount was $0 just a few years ago. This just shows me that dividend investing is a marathon, not a sprint. The most important thing is that you are progressing on your journey towards financial freedom, which is the end goal for most of us. Whether your dividend income grew 8% this month, 80%, or 180%, the important thing is that it grew and you are one step closer towards breaking the shackles and living the life that you want to. I’m starting to feel like Lanny now with how pumped up I am getting writing this!
How did you perform this month? Did you receive any surprise dividends or dividend increases in March? How was your first quarter?
-Bert