My Income Portfolio Quarterly Update (Q2 2013)

by: Invest Yourself


The first of this year I decided to start sharing my personal income portfolio with my readers. As part of this article series I decided that I would write quarterly follow up articles so that my readers can view my portfolio changes. You can view my original article here and my Q1 update here.

Activity Summary:

As everyone is well aware, Q2 continued right where Q1 left off. The gains made in stocks over the first half of Q2 continued to pace the gains that Q1 had given us. The second half of Q2 was a totally different story. Decent economic reports and suppressed bear market traders coupled with Federal Reserve statements regarding the tapering of QE infinity cause a much more volatile market to emerge. I took this opportunity to realize profits in some of my positions and rotate those gains into higher yielding investments. For this reason you will see a lot of buy and sells in the following sections of the same stocks as I realized some of the gains that those stocks had given me. I am also in the process of adding to my accumulated cash position in order to take advantage of any market drops that may occur after the next Federal Reserve statements due out at the end of July. Current cash on hand total is $1,722.23 and growing.

Portfolio Holdings/Dividends:

My portfolio holdings for the end of Q2 2013 are as follows.

Stock Held Shares Current Dividend Annualized Dividend
The Hershey Company (NYSE:HSY) 16.9327 $0.42 $28.44
Waste Management, Inc. (NYSE:WM) 37.0096 $0.365 $54.03
IBM Corporation (NYSE:IBM) 7.9593 $0.95 $30.24
PowerShares Preferred Stock ETF (NYSEARCA:PGX) 137.4772 $0.075 $123.72
iShares iBoxx High Yield Corporate Bond (NYSEARCA:HYG) 21.9273 $0.4797 $126.22
Wells Fargo & Company (NYSE:WFC) 36.5675 $0.30 $43.88
Southern Company (NYSE:SO) 44.9836 $0.5075 $91.31
E. I. du Pont de Nemours and Company (NYSE:DD) 38.0141 $0.45 $68.42
Darden Restaurants, Inc. (NYSE:DRI) 40.2243 $0.55 $88.49
Chevron Corporation (NYSE:CVX) 14.0661 $1.00 $56.26
Archer Daniels Midland Company (NYSE:ADM) 49.0127 $0.19 $37.24
Johnson & Johnson (NYSE:JNJ) 17.7349 $0.66 $46.82
Wal-Mart Stores Inc. (NYSE:WMT) 19.6990 $0.47 $37.03
Intel Corporation (NASDAQ:INTC) 79.9235 $0.225 $71.93
Aflac (NYSE:AFL) 30.6370 $0.35 $42.89
PepsiCo, Inc. (NYSE:PEP) 18.3504 $0.5675 $41.65
American Water Works (NYSE:AWK) 40.1918 $0.28 $45.01
General Electric (NYSE:GE) 88.4934 $0.19 $67.25
Main Street Capital (NYSE:MAIN) 65.3656 $0.155 $121.58
Realty Income Corp (NYSE:O) 41.6080 $0.1815 $90.62

Main Street Capital currently has declared semi-annual bonus payments of $0.20 per share amounting to additional dividend payments totaling $26.14. Since these are bonus payments and not guaranteed I will factor them into the annualized portfolio dividend total but not into the annualized total for MAIN.

These holdings result in a total annualized dividend for this portfolio of:

Annualized Portfolio Dividend Total $1313.03 + $26.14 = $1339.17

Portfolio Buys/Sells:

Here are the Q2 transactions that affected the holdings of this portfolio. All of the rules governing the way purchases are made and how much of each stock is purchased can be found in my original article here with a few fundamental rule changes that I decided to make and I will document at the end of this article.

  • Buys
Stock Shares Bought Share Price
MAIN 17.0000 $29.80
GE 21.1277 $22.29
HSY 16.9327 $88.35
DD 8.9003 $54.38
PGX 30.3901 $14.97
O 29.9485 $49.75
PEP 18.3504 $81.52
WMT 19.6990 $75.94
JNJ 17.7349 $84.35
HYG 4.8167 $92.80
WFC 36.5675 $41.02
WM 37.0096 $40.53
O 11.4103 $43.82
SO 10.8679 $44.54
  • Sells (Cost Basis For All Sales Was $1500)

Stock Shares Sold Total Sale Profit
HSY 22.5416 1962.96 462.96
O 37.6533 1977.38 477.38
PEP 22.6484 1817.15 317.15
JNJ 23.0427 1947.99 447.99
WMT 23.8481 1804.79 304.79
WFC 45.0339 1860.16 360.16
WM 46.8771 1893.92 393.92
  • Total Quarterly Profit From Sales
Total Realized Quarterly Profit $2764.35

This realized quarterly profit will now be recognized in the cost basis of future and current stock holdings but will not contribute to my YOC statistics since these profits did not come from deposit actions.

Portfolio Performance:

I deposited an additional $1677.64 into this portfolio during the second quarter raising my total current cost of this portfolio to $23,850.48 including current cash on hand.

Portfolio Dividend Yield On Cost(YOC) 5.62%
Total Net Portfolio Gain $12670.48
Annualized Portfolio Gain(Based on Portfolio Cost) 12.25%

There are three important metrics for this portfolio that I will track over time: Annualized Dividends, Yield On Cost (YOC), and Portfolio Value/Net Gain.

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Even though this quarter had some very dramatic swings to it my portfolio still managed to gain in all of the above three categories. The annualized dividend, net gain, portfolio value, and YOC all managed an increase. Also this quarter I revised part of my previous investing strategy rather than have all of my holdings reinvest their dividends I have decided that I will only the have investments that pay monthly reinvest their dividends so that I can take advantage of monthly compounding. All of the rest of my holdings that only pay quarterly dividends will pay them as cash to my account so as to afford me the ability to work with the cash in a more advantageous way. This will also allow me to choose when to capitalize on market swings.

Disclosure: I am long ADM, AFL, AWK, CVX, DD, DRI, GE, HSY, HYG, IBM, INTC, JNJ, MAIN, O, PEP, PGX, SO, WFC, WM, WMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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