Happy Halloween everyone! The fourth quarter started out with a bang and we are closing in on the new year quickly. I still cannot believe we are closing in on 2017; hopefully it will be as exciting for all of us as it is setting up to be for Lanny. The end of the month is always the best because it allows us to reflect on the growth we experienced over the last 30 or so days. I love seeing what the two of us and the dividend investing community were able to earn without lifting a finger. Now, it is time to take a look at my October Dividend Income summary!
october dividend income summary
In October, the first month of the fourth quarter, I received $148.32 in dividend income, or a 40% increase from the previous year! Bodda bing bodda boom! Couldn’t be happier with the results this month and breaking down the numbers left me even more excited than I was entering this article. First, I received my first dividend from Cardinal Health (CAH) after purchasing 50 shares in the third quarter. Nothing is better in my opinion than receiving a dividend check from a new company in your portfolio as it is obviously the easiest and fastest way to increase our dividend income. Coincidentally, this may not be the last time I am writing about receiving income from new shares of Cardinal Health; I may have to increase my stake after the nose dive the company took at the end of October. I’ve had my eyes set on Realty Income, especially after the dividend stock analysis I performed over the company recently, but the double-digit decrease in CAH’s stock price may just be too good to pass up. We will see what Mr. Market gives us in the upcoming weeks. Regardless though, I am pumped I received income from a new company in an “off month” in the quarter!
While it may appear that I received income for the first time from Kraft-Heinz (KHC), the table above is slightly misleading. If you all recall, KHC was a little late announcing and paying their dividend after their merger last summer. Instead of paying in the first month of the quarter, as they typically do, the company actually paid their dividend in November 2015. This will benefit my dividend growth rate this month and cause some pain in November. All in all though, this is just a timing difference and looks a lot better/worse than it actually was. Outside of those two items, the remaining year over year changes were a result of dividend increases (which are always awesome), currency items (GSK), and even the result of the selling of a few high fee mutual funds that occurred at the beginning of 2016.
October dividend increases this month
I’ve been looking forward to writing this section as I received dividend increases from three companies. What’s funny is they all came at the very end of the month and I am probably the most excited about the smallest increase of the three. Here are the announcements and the impact the increases had on my forward dividend income.
- AEP (AEP) – Lanny actually pointed this dividend increase out to me today and I was pretty excited. AEP increased their quarterly dividend from $.56/share to $.59/share, a 5.3% increase! This increased my annual dividend income by $2.57.
- Aflac (AFL) – Aflac increased their quarterly dividend from $.41/share to $.43/share, a 4.87% increase. This increased my annual dividend income by $2.56 per share. This increase oddly had nearly the same impact on my forward annual dividend income as AEP…what a coincidence.
- Chevron (CVX) – And now, the surprise dividend increase that I am the most excited about. We all know about the impact lower oil prices have had on the oil and gas community; several dividend increase streaks have been on the line. Out of the blue though, Chevron decided to increase their quarterly dividend by $.01, from $1.07/share to $1.08/share, a 1% increase. In total, this resulted in a $.43 increase in my annual dividend income. While the increase is tiny, it leaves me optimistic about the condition of some of the companies in this industry and the prospect of future dividend increases resuming soon. Time will tell, but it was an exciting surprise.
Summary
Another important thing to highlight here…I actually published my dividend income summary before Lanny did! Now talk about milestones here haha All jokes aside, another strong month of dividend income. I received some unexpected dividend increases as well, which is always a treat. Dividend growth rates are still below the levels we experienced over the last few years, but that is a product of the current environment. Regardless, this was a great kickoff to the fourth quarter and hopefully I can replicate these kind of results for November and December. Now, it is time to make a strong push with two months ago to knock out all of my goals for 2016. I still have some work to do, so I need to stay focused on the end game. I built a strong watch list a few weeks ago, so hopefully I can act on some of the stocks I am targeting and add to a position (or create a new position) in my portfolio soon. We say it all the time here, but it never gets old. Every..single…dollar counts in your pursuit of financial freedom. Don’t forget that!
How did you perform in October? Did you benefit from any unexpected dividend increases? If so, which companies increased their payout to you? What stocks should I be watching as we head in to November? Do you have any hidden gems? As always, I’m looking forward to your comments!
-Bert