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
I didn’t look into the numbers yet (been busy taking care of this basement flood effects again…), but happy for you! You and Lanny share a nice complicity and a unique sense of humor. Keep it up!
Thanks DivGuy. I really appreciate the kind words. It has been a lot of fun working on the website with Lanny. We try to treat our interactions on here in a similar manner to our in person interactions. That’s what makes it fun!
Hopefully things get better with your basement. It flared up again? Hopefully the end is in sight and you can put this all behind you.
Bert
Thank’s! It’s still the same flood but floor and walls needed some fixing… Can’t wait to be done with all this stuff indeed! 😉
Nice work. Decided to join you in CZNC since I had a slot to fill with the completion of the ESBF merger in February. Thanks!
Charlie,
Welcome to the club! CZNC is a great bank and you will receive a nice dose of dividends along the way. It’ll fit nicely into the hole ESBF will be leaving. Have you invested in a lot of community banks before, or was ESBF your first purchase in the industry?
Thanks for stopping by!
Bert
That’s one good thing about Motif. I’ve got at least an entry position in probably 25-30 of them. ESB was my first being acquired (with premium) while another 8 were acquirers. The two that were mildly irritating was when my bank was acquired but was the remaining entity – therefore the premium was retained by the acquirer’s shareholders.
Wow, I did not know that you could invest in community banks through Motif. I thought it was just for larger stocks. That’s very interesting. I am curious which other stocks in that market you own. The industry is going through some major consolidation right now, and your ratio of acquirers to acquired is remarkable considering just how many banks have been acquired over the last could of years. It is just unfortunate that you are missing out on the appreciation that comes with being acquired. And lastly, I can see how that would be very irritating, you saw your premium walk right out the door and into the neighboring shop.
drop me an email and I’ll send you my bank holdings and rationale.
Nice work Bert! A small increase YOY but an increase nonetheless. Considering you sold a few positions as well, very solid dividend income all around.
Thanks Tawcan. I appreciate it! I was just happy at the end of the day to see my income increase from last year, especially considering the positions I sold. ARCP made up such a nice sum of income, so it has taken a lot of capital to fill the void it left behind. Luckily I was able to add enough in the last year to keep the dividend increase moving forward. Now that the sales are behind me (hopefully), I can focus solely on adding income going forward!
Bert
I love that comment about this not being a sprint, but a marathon. So many times, people look at the tiny quarterly payouts and think “this isn’t worth it”, and they end up completely missing the bigger picture.
I received a little less in dividends than you (about $140), and likewise, I’m quite pleased with the haul this month! Congrats on a solid month!
Thank you very much Seraph! I couldn’t agree more, dividend investing requires a very big picture. One of my other favorite analogies is the dividend snowball. It starts off small but as it continues to roll downhill it grows at a much faster pace. But the key piece is that you will never get to the large part if you don’t persevere through the smaller parts. You have to start somewhere, right?
Congrats on a great month. It is exciting that we are both in a similar position. Before we know it we will be staring down four figure dividend income each month!
Bert
Great Month Bert. Progress is trending upwards which is nice. Keep up the good hustle. I know it’s an awesome feeling depositing money into the freedom fund every month. Take care bud.
Hustler!
Thank you very much, I appreciate it. I am going to keep on hustling until the day I reach financial freedom! I don’t care how I accomplish it, but all I care about is that my income is increasing and trending upward. That’s what it is all about.
Bert
Bert,
Another solid month, bud. Every dollar counts and this is still more than you took in last year, even with the sales there. Keep it up. You’ll be eclipsing $200 regularly and then it’s up, up, and away! 🙂
Best regards.
Thank you DM, I appreciate it. I cannot wait to achieve $200/month regularly. Right now, I will only hit that figure in June and December, both of which are pretty dependent on the activity of my mutual funds. Otherwise, I am consistently in the low to mid 100s. Transitioning into months that are in the mid 100s to low 200s will be huge for my portfolio and the dividend snowball. I am on the way and my purchases in the first quarter are a major step in the right direction. I cannot wait to start receiving the dividends from all of my new investments in the second quarter. And hopefully those were my only two sales and from now on my dividend income will only increase!
As always, thanks for stopping by!
Bert
You’ve come really far in such a short time my man. You are nearly at $150, soon you will pass $175 and $200 will be around the next corner!
Keep up the ace work and keep roling that snowball!
Cheers
M,
Thank you very much, I appreciate the kind words. I would love to find a way to hit $200 in core dividends (excluding mutual funds) by the end of the year. That would be one heck of accomplishment and take some serious capital haha But that’s why we push ourselves and try to same as much of our income as possible, right? I’m up for the challenge! I really want this snowball to start rolling and growing.
Thanks for stopping by!
Bert
Great job! I agree with everyone else, an increase is still an increase. Both with your lone dividend raise and the YOY stat. I can’t picture another strategy which could provide such tangible results. You’re making excellent progress my friend and it’s been a pleasure to watch 🙂
Ryan,
Thank you very much, I appreciate it. You guys are all right, with negative headwinds resulting from sales, I am just happy that my dividend income increased YOY. That’s a nice sign of progress to me, that my steps forward are larger than my steps back. You are right, how many other strategies will over a high single digit growth rate. That definitely will not be the case at the majority of employers. The morale of the story as lets get our dividend income as large as possible so we can pursue our dreams and becoming our own employer! The problem is that is easier said than done, but we are all making some pretty serious progress towards knocking that out of the park.
Thanks for stopping by Ryan. As I said before, I always appreciate the kind words from you. I freaking love this community!
Bert
Why did you sell ARCP? I think it could be a good riskier portion of the portfolio with high dividend rate.
Other than that, nice results. Congrats.
Thanks Martin. My article dives into my thought process behind ARCP in detail, but I’ll summarize briefly. ARCP did not fit my investing strategy anymore. The company was turning over management, had suspended their dividend, and were set to release their findings from all of their investigations. At that point, it was a crap shoot with what was going to happen at ARCP and the stock price had a 50/50 chance of increasing or decreasing. Would management’s findings show the fraud was much deeper than known? Would the dividend be slashed significantly? etc. My main focus with investing is to purchase dividend stocks that will produce growing dividends over the long term. Could ARCP eventually turn into that again and fit my investing strategy? Absolutely. But I did not want to continue to ride the roller coaster and I believe I found some great alternative investments with the capital. So I decided to cut my losses and never look back.
Hopefully that helps give you some insight on my thought process during the sale. Thanks for stopping by!
Bert
New purchases, dividend raises and good old fashioned compounding equals a respectable year over year increase in your passive dividend income. I see a couple common names between our March income producers and that ARCP is still in your portfolio. I think you are one of the few remaining dividend bloggers that held on. Thanks for sharing.
DivHut,
Thanks for stopping by! It always makes me feel better when I have some names in common with a fellow investor in the community. We are all pretty like minded and tend to invest in strong dividend growth companies. You definitely have more holdings than me, so hopefully by this time next year I can happily say that we have more holdings in common. All I want to say is that I am happy the ARCP episode is over. HCP provided much better long-term prospects and happened to take a dive at the time my capital from the sale became available for me to use, so it was the perfect storm form me. I am hoping that I will not have to worry about HCP for a long time.
Again, thanks for stopping by.
Bert
I can understand why you finally did swap out ARCP though. HCP is a great name in its place.
Good job Bert! A small increase is still an increase. For my dividend portfolio Ive started looking at diversifying into more consumer staple stocks, I bought JNJ recently but I’m looking to buy more in the future
Thank you very much. I agree, very little bit helps and there is no such thing as too small of an increase. What other stocks are on your watch list in the area?
Bert