How 3 Dividend Stocks Pay Me $1,500+ Per Year – Lanny’s Dividend Stocks

Dividend investing to $1,500+ from 3 Companies

Welcome back Dividend Investors!  Today, I am going to show you how 3 Dividend Stocks I own pay me $1,500+ in a single year.  The best part about the dividend income I receive from these 3 stocks, is that the income continues to grow, year after year.

If you did not know it by now, I love dividend investing.  In fact, dividend investing could be the BEST and EASIEST form of passive income to start and have, no doubt about it.  Dividend investing can allow your dividend income to grow automatically, as well, through dividend reinvestment (DRIP) and through dividend increases.  You put a lot of money/capital up front to start, but the compounding/snowball effect is incredible.

So much so, that with time and capital up front, the snowball can really build and pick up speed.  In my case, the speed of the snowball as rolled into a dividend amount of over $1,500+ that I receive from these companies, each and every year.  The best part – the snowball keeps getting bigger, stronger and FASTER!

What I did to build $1,500+ Dividends from 3 Companies

Therefore, as a dividend investor, you have a few ways where you can build this snowball.  I will list them out with detail below, to educate and provide stone cold facts.

1. Invest your money: There’s no sugar coating here.  You need to invest your hard earned savings into dividend stocks.  You don’t wake up and check your brokerage, to find out somehow someone/something gracefully has provided new shares in your account.  Outside of maybe Robinhood Investing, that more than likely isn’t happening.  You need to invest your savings into undervalued dividend stocks!  Good thing we showcase plenty of dividend stocks here on this site and our YouTube channel!
2. Dividend Reinvestment (DRIP): The Power of Dividend Reinvestment is REAL!  The 3 stocks that you will see below are extremely powerful.  Why?  They have incredible high dividend yields, for starters.  In fact, they all yield at least 5%+, which causes the reinvestment or the dividend snowball effect to be that much more powerful.  Each dividend paying stock listed below also pays quarterly, the most common dividend payout frequency.  Therefore, at each time a dividend is paid out, for those wanting to learn, the dividend gets reinvested back into the share price on the payable date.  Since these all yield at least 5%, we are talking a 1.25% reinvestment (5% / 4 quarters), at a minimum, each and every quarter.
3. Time: Yes, you need time to work on YOUR side.  It is true what they say about investing.  The first best day was yesterday, but the second best day is TODAY.  That goes perfectly with dividend investing.  Your passive income stream grows faster, bigger and stronger, as mentioned above, when the dividend snowball has had time to work with and for you.  Think about it, it makes sense.  The more years you have where the dividends are being paid and reinvested, with dividend increases, the bigger, stronger and faster your dividend snowball becomes!

3 companies that pay me over $1,500+ in dividends

Alright, without further-ado, here are the 3 dividend stocks that POWER me to over $1,500 per year!  The three powerhouse dividend companies are, in order on the list, alphabetically by ticker symbol: Canadian Imperial (CM), Philip Morris (PM) and AT&T (T)!

Each of the dividend stocks is paying a dividend yield of well over 5% and they are all close to yielding over 6%!  Given the high dividend yield, should I be concerned with the safety of the dividend?  That is where I look at the dividend payout ratio.

When I review for the dividend payout ratio, I look at the forward 12 month earning expectation.  You then take the annual dividend and divide over the expected earnings per share.  This is one of our dividend metrics we use in our Dividend Diplomat Stock Screener.

Canadian Imperial (CM): Analysts are anticipating earnings in the $7.69 range for 2021.  Currently, their dividend is $4.40.  The dividend payout ratio is 57%, which is below our preferred 60% threshold!  Even as the banking sector has declined, they have managed to maintain a sound ratio.

Philip Morris (PM): Analysts are anticipating earnings in the $5.64 range for 2021.  Currently, their dividend is $4.80.  Therefore, the dividend payout ratio is 85%, a blistering high rate.  Surprisingly this is lower than the 5 year average, which, per dividendinvestor.com is 98%.  Similarly, they increased their dividend by a small 2%+ recently.  I would anticipate this going forward.

AT&T (T): Analysts are anticipating earnings in the $3.23 range for 2021.  Currently, their dividend is $2.08.  Therefore, the dividend payout ratio is 64%.  This is right where I have seen them lately, and their 5 year average payout ratio is actually 85%, per dividendinvestor.com.  I do not have a concern about their payout ratio at this time.

Dividend growth expected

Given that these 3 companies each pay me over $500+ in dividends per year, I also wanted to show you the proof of what happens when even a small dividend increase occurs, such as what we see with Philip Morris (PM) and expectations are with AT&T (T).

First, I anticipate a 2% dividend growth rate for AT&T (T) this 4th quarter.  This will push their annual dividend to $2.12 per year.  Even with such a minor dividend increase, this will still push my forward dividend up by $9.92!

Second, if Canadian Imperial (CM) grows their dividend at 4%, barring a second increase this year in November, the income will grow by $22.89!  That’s a snowball in action.

Lastly, even with Philip Morris (PM) increasing their dividend at 2%, this will also increase my forward passive income by $10.  Proof, is in the pudding.

Therefore, the combination of the small dividend increases, can push my income forward by a total of $42.81.  If I had to create $42.81 in dividend income with a dividend stock purchase, at a yield of 3.50%, I would need $1,223 in capital.

dividend reinvestment examples for the 3 stocks

Now that is not even considering dividend reinvestment!  What happens when a dividend gets back and is reinvested BACK into the share at the prices mentioned above?

I will also use the annual income in a simple calculation, but keep in mind – the annual income is divided quarterly throughout the year.  Therefore, technically, the dividend snowball gets bigger throughout the year and not in just one full swing.  In essence, this equation will be conservative!

First, with Canadian Imperial (CM), $572.46 reinvested back into more CM stock would produce an additional $33.77 in additional forward income.  The 5.90% dividend yield definitely allows the additional forward income to be massive on reinvestment!  The dividend reinvestment fun does not stop there.

Second, Philip Morris (PM) will add a solid punch, given their dividend yield is 6.37%, 47 basis points higher than CM.  Given that the annual dividend income is $500.98 going forward, if this amount is reinvested at 6.37%, you will add $31.91 in additional income as well.  Between two dividend stocks, on reinvestment alone, the snowball adds $65+!  Time to finish this off with a dividend aristocrat.

Third, that dividend aristocrat is AT&T (T).  AT&T’s yield is a sweltering 7.42%.  Upon $515.61 in dividends being reinvested that that significant rate, this produces additional income of $38.26!  The cherry on top, no doubt.

In total, from Dividend Reinvestment (one of the hidden treasures to dividend investing), adds an additional $103.94 in forward dividend income.  Remember, this is the 2nd method that dividend income becomes more or less passive income.  To generate $103.94 in forward dividend income from a dividend stock investment, I would need to use almost $3,000 at 3.50%!

how much and how often to invest to 3 stocks that pay $1,500+

In fact, I haven’t made substantial investments in these 3 dividend stocks for quite some time.  There are quite a few common statistics that each company has.  Here are the details of my investments in the companies listed above for the past 4 years, dating back into year 2017:

• AT&T (T): In 2020, I acquired 13 shares, primarily during the downturn.  However, no new shares were purchased in the 3 years prior to this year.  That’s right.  0 shares in 2019, 2018 and 2017.  I do not have history any longer to go back beyond that period.  Therefore, ONLY 13 shares of my 248 shares were acquired in the last 48 months via purchasing.
• Philip Morris (PM): Similar to AT&T, I have acquired 2 shares in 2020.  However, no new shares were purchased in the 3 years prior to 2020, as well.  Similarly here, 102 other shares were purchased before that time or were from a heavy game of dividend reinvestment.
• Canadian Imperial (CM): It’s a different story with this beloved Canadian Bank.  I have acquired 16 shares in 2020, 0 in 2019 but I did acquire a whopping 27 shares in 2018, with 0 in 2017.  Therefore, approximately 1/3 of the shares I own were from purchases in 2020 and 2018.

A question you may have is – how much did I invest to create this form of dividend income from the 3 dividend stocks above.

Keep in mind, I have been dividend investing for over 10 years and the 3 companies of Canadian Imperial (CM), Philip Morris (PM) and AT&T (T) have been long-term holdings of mine.  I believe I have owned each for over 6+ years now, some even almost 7+, investing in chunks over the years.

Over the years, I have invested over $21,140 spread across the 3 companies above.  I have invested $8,500 in CM, $6,300 in PM and approximately $6,300 in T.

Obviously, I was acquiring in MUCH higher share prices than what we are currently seeing now, hence why the MV to Cost is not that significant int he differential side.  This is propped up due to dividend reinvestment and the acquisition of more shares.

It’s good to note, I obviously had no way of doing this all at once, this is from years of investing into the dividend stocks.  Definitely shows what you can do if you save at least 60% of your income.  If you are interest in 5 ways to save at least $500 – definitely check out the link there, as well!

Conclusion and Takeaways

The high points from discussing how I was able to have 3 dividend stocks generate over $1,500 and keep that dividend income growing is fairly simple, but powerful, at the SAME TIME.

1.) TIME – Starting as soon as you can, only helps the dividend snow ball build.  Time is your friend if you have it or your enemy if you don’t.  I am also dividend investing as my primary vehicle to financial freedom to have just that… TIME!

2.) HIGH SAVINGS RATE – Since I have been in investing a little over 10+ years, this still is hard to find the capital and make the investments.  I don’t even realize I have poured this many thousands into the dividend stocks above with Canadian Imperial, Philip Morris and AT&T.  It took a high savings rate and maintaining a high savings rate.  I keep life on the expense side simple.  I’d rather spend money on experiences vs. higher priced, material things.

3.) DIVIDEND INVESTING – I couldn’t generate this form of passive income without investing into dividend stocks of course!  Yes, when I came across dividend investing, what I believe is well over 11+ years ago (check this tweet of mine!), I was in awe.  I thought wow, this could be the best and easiest form of Passive Income there is.  Between the POWER of Dividend Reinvesting AND finding undervalued dividend socks that GROW their dividend each year – that is a match made in heaven!  The DIVIDEND SNOWBALL continues to roll, stronger, heavier and faster.

I cannot wait what the next 5 years will bring to these dividend stocks above.  I do know that I am happy I started investing, as much as I could.  Let me know if this has been helpful, motivating, as the aim and name of the game is to show YOU that this is real and YOU can do it.  Especially, if a kid from Akron can do it.  Share your comments and feedback below, as always – good luck and happy investing!

-Lanny