Dividend Income & dividend raises - October 2015

Dividend income
October was not a very exciting month, in terms of dividend income.
2 of the 16 companies I am currently invested in, paid me their dividends.

KO - $13.86
GE - $9.20
Total October (gross): $23.06
Total dividends received in 2015: $287.65 (net)

My 2015 goal for dividends is to receive a net total of $300 of them.
With only $13 to go, I think it it safe to say I will be reaching this goal.
That makes me a happy person, especially if you compare this to what my local bank would have paid me.

If we compare this months result to last years, we were able to create a small increase.

October 2014: $22.08
October 2015: $23.06

This is a 4.44% increase.
It's not amazing, but with the power of compounding behind me, I'm still happy with this result!

Dividend increases
While it was a calm month on the dividend income, we cannot say this about dividend raises.

On October 14th, OHI increased their dividend from $0.55 to $0.56.
This is a 1.8% increase. Due to this change, my YOC is now at a very nice 6.31%.

On October 21st, KMI increased their dividend from $0.49 to $0.51.
This is a 4.1% increase. Due to this change, my YOC is now at a nice 5.86%.

On October 27th, AFL increased their dividend from $0.39 to $0.41.
This is a 5.1% increase. Due to this change, my YOC is now at 2.6%.

How was your October?

Thanks for reading.

Recent buy - October 2015

A few weeks ago, I put some fresh capital to work!

Unfortunately the amount of this fresh capital was not as large as it should have been, but that's because we spent some time in the city of London. It's a great place to be, although it's not very cheap.

We did the usual sightseeing and went to one of the most succesful musicals ever: Les Miserable.
A very exciting experience! We had a great time.

In the midst of all this, I'm in the process of buying my first apartment!
More about that soon, as it is not yet finalized.

Let's get back to business!

Wells Fargo & co (WFC)
Buy 12 shares @ $51.32 at 9/30/2015

Wells Fargo is one of the biggest banks in the US. Their total assets have a value of $1.69 trillion dollars. They offer a wide variety of financial services like personal banking, insurances, mortgages, wealth management and investing services.

During the Great Recession the entire financial sector took a big hit and WFC was no exception. The stock went from $39 to $8 in a matter of months.

WFC stock price during the Great Recession (source: Google Finance)

As we know now, they have managed to recover pretty well from that.

WFC stock price after 2008 (source: Google Finance)

The impact of the recession is also shown in the graph below, which shows the dividend payouts of WFC from 2002 until now.

This graph leads to the following DGR numbers.

DGR-1, 17.4%
DGR-3, 41.2%
DGR-5, 22.5%
DGR-10, 3.8%

With an earnings per share of $4.11 and a very small payout ratio of 36.54%, there should be more than enough room for WFC to grow their business and their dividends to the $0.52 per quarter they once paid. The low forward P/E of 12.49 is just another metric of showing this potential.

I can definitely see why Warren Buffet has so many of shares of this great company.

What do you think of this purchase?

Thanks for reading!

Why did I start this journey?

It has been a great journey so far!

Just 15 months ago, I did not know anything about DGI.
Of course I knew about stocks, but I thought the only way to make money on the market is to know which stocks will be at a higher price tomorrow than they are today. However, I did not find myself capable enough to find such stocks. As I have learned recently, this is not because I am stupid, but because nobody in the entire world knows.

Fortunately I came across DGI. This strategy enables you to make a profit without relying on rising stock prices, basically without doing anything. It opened my eyes and I really have to thank bloggers like Dividend Mantra, Captain Dividend, DivHut, DivGro and Roadmap to Retire, amongst many others for this insight!

Just knowing about the strategy was not enough reason for me to start the journey.
At the time I was very disappointed in all the major banks in The Netherlands. The average interest you would get at a standard savings account was 1.4% to 1.2%. With inflation taken into account, I was just losing money, instead of gaining some.

This was how it all started.
My primary goal was to beat the 1.25% interest rate I received in June 2014.

So, let's see what happened with the interest rate after June 2014.

Interest rate of a standard internet savings account at the largest bank of The Netherlands.

Ouch! Down 0.45% to 0.80% at this moment.

What would the bank have net me in interest?
In order to determine what the bank would have paid me in interest if I kept my money at the savings account, I calculated the balance of each month and added the according interest rate to it.
The bank would have paid me a total of €108.80 in interest over the past 14 months.

The power of DGI
Meanwhile I invested in 14 solid companies. From June 2014 to September 2015, they paid me a total of $484.04 in dividends. Unfortunately we have to deduct 15% because of tax, meaning a net total of $411.43 was received. This is the equivalent of €367.27.

Kaboom! The blue chip companies I invested in, paid me 3.38 times as much as the bank would have done. Amazing.. I would not have thought that this simple strategy could be this successful.

Keep at it and I'm sure you will beat your local bank as well!

Thanks for reading.

Dividend Income - September 2015

September was an amazing month for me.
Another record is broken! The power of compounding is starting to show off.

Dividend income

CVX $10.70
TGT $15.68
JNJ $12.00
AFL $7.41
MCD $9.35
QCOM $6.24
TROW $6.24

Total September: $67.62 (pre tax)

Comparison with last year (gross)
September 2014: $13.08
September 2015: $67.62

This is a 517% increase!
Let's see if we are able to maintain that percentage in 2016.. ;-)

In order to achieve the annual $300 of net dividends, I should have received $225 by now.
The total net dividends of 2015 are currently at $268.05, so we are ahead of our goal. Looks like I could set a goal for >$100 in one month, somewhere in 2016. That would be a very appealing milestone to look forward to!

How was your September?
Thanks for reading!

Recent buy - September 2015

Looking at my current holdings, we see a reasonable balanced breakdown of sectors I'm invested in.

Those who are familiar with the sectors used in David Fish' CCC list, might miss 2 sectors.
You are right! I am not yet invested in any company related to the Materials or Utilities sector.

Keeping my portfolio diversified is one of my main goals. This is why I was specifically looking for opportunities in these sectors. However, I did not find many great looking quality stocks here. During my research I came across ALB, SYT and CMP as potential purchases, but they didn't make the cut for different reasons. If theres anyone who might have a good suggestion, please let me know down below.

The next best thing was adding a position to either Information Tech, Energy or Industry.
This is where I found Caterpillar.

Caterpillar Inc (CAT)
Buy 12 shares @ $73.75 at 9/8/2015

Caterpillar is a huge company that manufactures mining and heavy industrial equipment. It is founded in 1930 and has grown to be the largest company in their business.

Most of their segments, like mining, energy & transportation and resource industries are depended on natural resources. This is why their profits are not steadily growing, but making pretty big swings instead. In Q2 2015 they suffered a 13% decline in revenues, compared to Q2 2014, as indicated by the comparison below.

Source: CAT Q2 2015 earnings release

Growth
The company has been raising their dividends for 22 consecutive years.

Their growth over the years has been amazing. As with many other companies, I wish I knew about this company about 25 years ago. If you would have invested $1,000 in CAT at 8/31/1990, it would have been worth $13,823 right now. (source)
Of course, this is just hypothetical, as people probably did not have the ability to for see the future, back in 1990.

However, recent growth numbers are still double digits.

DGR-1, 11.1%
DGR-3, 13.0%
DGR-5, 9.1%

Yield & competitors
The yield of 4.03% is well above the sector average of 2.06% (all industry contenders).

Valuation
With a payout ratio of almost 53%, the payout of future dividends should be maintainable.
With a forward P/E of just 13.11, it sure looks like we get some value for money.

The Coca Cola Company (KO)
Buy 1 share @ $38.76 at 9/8/2015

This is an addition to my existing holding, because I had a little bit of money left in my account.
KO goes ex dividend tomorrow.

What do you think of these purchases?

Thanks for reading!

Dividend Income - August 2015

August was a great month. As a matter of fact, it was my best month ever!
This is very exciting to me. I did not expect to have $50+ months within just 14 months.
I'm loving this and I hope to break records many more times!

It was the first time I received dividends from OHI (wow!) & KMI.

T - $23.03
PG - $8.62
OHI - $18.15
KMI - $9.20

Total August (gross): $59.11

Total dividends received in 2015: $210.57 (net)

My 2015 goal for dividends is to receive a net total of $300 of them.
Currently, I received an average of $26.32 per month.

If this continues, we are passing the goal!
Thanks to August, our expectation changed from failing to passing. Great news!

Comparison with last year
July 2014: $32.79
July 2015: $59.11

This is a 80.26% increase.
This is where the true power of compounding and steadily investing with fresh capital kicks in!
I'm very happy to see this is possible, even with a small income.

How was your August?

Thanks for reading.

Dividend income - July 2015

July was an OK month.
2 of the 13 companies I am currently invested in, paid me their dividends.

It was the first time I received dividends from GE.

KO - $13.53
GE - $9.20
Total July (gross): $22.73
Total dividends received in 2015: $160.33 (net)

My 2015 goal for dividends is to receive a net total of $300 of them.
We are 7 months deep in the year, meaning I averaged $22.90 per month.

If this continues, we are failing the goal!
However, August & December should be great months, so I still have confidence I could reach the goal.

The most interesting part to me, is the ability to start comparing to the result of last year.
I have been looking forward to this!

July 2014: $22.08
July 2015: $22.73

This is a 2.94% increase.
Last year my broker paid AT&T dividends in July. That's why the difference is not too big.
Looking forward to August!

How was your July?

Thanks for reading.