September was a crazy month and it flew by. It felt like every day Lanny and I were either receiving a dividend, purchasing a stock, or watching for a dividend increase announcement. There was just a ton going on. September was also huge for me since I was able to knock out my first 2015 goal: Investing $15,000 in “New Capital” in 2015. With the recent downturn, I have felt as compelled as ever to maintain a low cash balance to purchase some great discounted dividend growth stocks. Now that the month is over, I can finally breathe and take a step back to assess my monthly dividend income and compare the total to prior periods. Let’s see the results for September.
Dividend Income Summary
This month I received $224.26 in dividends, which represents a 20% dividend increase compared to last September and a 20% decrease from June. However, the devil is in the detail and there are a lot of moving parts that contributed to the growth rates above. Let’s take a further look at my dividend income for the month.
First, and quite frankly, the most my favorite item to report. I received dividends from three new companies this quarter: Emerson Electric, Johnson & Johnson, and Consolidated Edison. Man it has felt like ages since I purchased Consolidated Edison, one of the stocks we believe is a foundation stock for a dividend investor’s portfolio. In total, the total dividends from these three companies represented 18% of the total dividends received in September. Talk about a nice contribution from your team’s newest players! The best part is that the quarterly dividend I will receive from Emerson is set to increase as I re-upped my position earlier in the month. I can’t wait till December rolls around.
As I mentioned earlier, there were some extra details to discuss. No, the details did not revolve around the stocks I purchased this month. It centers on the pure dollar dividend growth rates that I mention a few paragraphs ago and how the numbers are misleading when I compare the actual dividends received during the period. Making a few adjustments will portray a better picture of the core dividend growth of my portfolio. First, if you recall, last September we received a special dividend from Scotts Miracle-Gro, which we all know is a special one-time event. Thus, to accurately compare the dividend growth rates, I adjusted the total income to reflect re-occurring dividends (similar to what I did in July when we all received that massive special dividend from Kraft). After removing the special dividend of $42.25, my year over year dividend growth rate was actually 55%! Similarly, I own shares in a large-cap growth fund that pays a semi-annual dividend in June and September. So for fun, when I remove this dividend, my dividend income actually increased 32% when compared to June. Now that’s what I am talking about!
After these few items, the rest of the growth was attributed to every dividend investor’s best friend…the DRIP. Outside of a few stocks, I received a nice bump due to dividends re-invested in the previous quarters. Are the numbers small right now…sure. But the impact will be larger and larger as the dividend snowball begins to pick up steam and roll further down the hill.
Dividend Increases
This was an odd month for dividend increases, as Lanny mentioned during his article. It seems the recent trend of large dividend increases for many large companies is slowing down, as we have noticed that many large companies have been announcing smaller than usual dividend increases. Which is unfortunate news for us dividend growth investors. Oh well, what can you do. I guess a smaller increase is better than no change or a decrease, right? Anyway, similar to Lanny, I received a slight bump from Philip Morris (from $1.00/share to $1.02/share quarterly). Even stranger than the small increases is the fact that McDonalds has still not announced their dividend increase that was scheduled to occur a few months ago…what the heck? Lanny and I have been watching for this announcement (which may sadly be considered an obsession) and are giving each other practically hourly updates. STILL NOTHING. Come on McDonalds…let’s increase that McDividend!
Summary
Wow! This month is a textbook example of why I love dividend growth investing and I am so passionate about investing every dollar NOW to build a dividend income stream that will carry me to financial freedom. These results are real and the impact is beginning to be felt and trickle down throughout my portfolio. I couldn’t be happier with my results this month and hopefully I will have as many new companies paying me a dividend as I did in 2015. This is what it is all about, so let’s keep pushing, scratching.clawing, and investing every penny we can so we can achieve our end goal as soon as possible. LET’S GO EVERYONE!
How was your month of September? Did you see a large increase in dividends this month? If so, which investments caused the large leap? Did you realize any smaller than usual dividend increases? Do you know what the heck is going on with the Golden Arches?
-Bert