My Income Portfolio Quarterly Update (Q1 2014)

by: Invest Yourself


Income Portfolio.

Long Term Holdings.

Dividend Reinvestment Strategy.


The first of last 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 and progress. You can view my first article here and my previous quarterly updates Q1, Q2, Q3, and Q4 from 2013 in the provided links. These articles will show you on a quarter by quarter basis how I am managing my income seeking portfolio.

Activity Summary:

The stock market Q1 performance was a rather tumultuous one. Q1 has seen its share of ups and downs but has still trended slightly higher. The Federal Reserve has officially started QE tapering operations as well as appointing a new Federal Reserve Chief. Janet Yellen is now in charge of directing the central banks actions. I believe these two factors have made bullish investors slightly hesitant and are causing a slowdown in the bull market trends. Housing is improving at a moderate pace and many people are predicting a good year for homebuilders. The finance industry just underwent further stress tests and 29 of 30 institutions passed the Federal Reserve tests. I believe that Q2 will present quite a few good buying opportunities due to continued market turmoil. The current market perched in a holding pattern waiting for good news to drive it higher or bad news to drive it lower.

Portfolio Holdings/Dividends:

My portfolio holdings for the end of Q1 2014 are as follows.

Stock Held Shares Current Dividend Annualized Dividend
The Hershey Company (NYSE:HSY) 22.0967 $0.485 $42.86
Waste Management, Inc. (NYSE:WM) 48.8565 $0.375 $73.28
Cisco Systems Inc. (NASDAQ:CSCO) 91.3451 $0.19 $69.42
PowerShares Preferred Stock ETF (NYSEARCA:PGX) 144.279 $0.0726 $125.69
iShares iBoxx High Yield Corporate Bond (NYSEARCA:HYG) 22.8228 $0.4633 $126.88
Wells Fargo & Company (NYSE:WFC) 47.7971 $0.30 $57.35
Southern Company (NYSE:SO) 44.9836 $0.5075 $91.31
E. I. du Pont de Nemours and Company (DD) 38.0141 $0.45 $68.42
Darden Restaurants, Inc. (NYSE:DRI) 40.2243 $0.55 $88.49
Chevron Corporation (NYSE:CVX) 17.9036 $1.00 $71.61
Archer Daniels Midland Company (NYSE:ADM) 60.2494 $0.24 $57.83
Johnson & Johnson (NYSE:JNJ) 23.1511 $0.66 $61.11
Wal-Mart Stores Inc. (NYSE:WMT) 25.9525 $0.48 $49.82
Intel Corporation (NASDAQ:INTC) 79.9235 $0.225 $71.93
Aflac (NYSE:AFL) 38.1096 $0.37 $56.40
PepsiCo, Inc. (NYSE:PEP) 24.4584 $0.5675 $55.52
American Water Works (NYSE:AWK) 52.3012 $0.28 $58.57
General Electric (NYSE:GE) 88.4934 $0.22 $77.87
Main Street Capital (NYSE:MAIN) 69.3645 $0.165 $137.34
Realty Income Corp (NYSE:O) 43.3061 $0.1824 $94.82
WeyerHauser (NYSE:WY) 19.8192 $0.22 $17.44
Deere Inc (NYSE:DE) 2.3027 $0.51 $4.69
Norfolk Southern (NYSE:NSC) 2.1844 $0.54 $4.71
Alerian MLP ETF (NYSEARCA:AMLP) 11.3315 $0.278 $12.60
Market Vectors ETF HG YLD MUNI (NYSEARCA:HYD) 6.8564 $0.135 $11.10

Main Street Capital currently has declared semi-annual bonus payments of $0.25 per share amounting to additional dividend payments totaling $34.68. Since these are bonus payments are not guaranteed I will factor them into the annualized portfolio dividend total but not into the annualized total for MAIN.

The dividends of these holdings result in a total annualized dividend for this portfolio of:

Annualized Portfolio Dividend Total: $1587.19 + $34.68 = $1621.87

Portfolio Buys/Sells:

Here are the Q4 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 during Q2 mainly dealing with the compounding of dividend payments for my monthly paying investments. For more information about those changes please refer to my Q2 update which I referenced at the top of this article.

  • Stock Buys
Stock Shares Bought Share Price
CSCO 91.3451 $21.89
WY 19.8192 $30.27
DE 2.3027 $86.85
NSC 2.1844 $91.56
AMLP 11.3315 $17.65
HYD 6.8564 $29.17

This quarter I bought CSCO as a one for one replacement of IBM in my portfolio. More details about that can be read below. Also this quarter I started purchasing smaller increments of the next five stocks I decided to add to my portfolio. More information about why I chose the stocks I did can be read about here. I will continue to buy shares of these investments until they reach the same cost basis as my other current holdings at the $2,000 mark.

  • Stock Sales
Stock Shares Sold Share Price
IBM 10.6629 $190.00

In my last article I had mentioned that I was placing IBM under further scrutiny. I decided that it was best to sell IBM and replace it in my portfolio with Cisco Systems. More information about that decision can be read about here.

Portfolio Performance:

I deposited an additional $1300.02 into this portfolio during the second quarter raising my total current cost of this portfolio to $28,392.54 including current cash on hand. Performance metrics for this portfolio are displayed in the tables and graphs below.

Annualized Dividend Total


Portfolio Dividend Yield On Cost (YOC) 5.71%
Total Net Portfolio Gain $16,998.39
Total Portfolio Value $45,390.93

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.

This graph represents the growth of my annualized dividend.

This graph represents my total portfolio value (blue) and my net gain in value above deposited funds (red) over time.

This graph represents my portfolio's Yield On Cost over time.

Portfolio Quarterly Summary:

As you can see from the statistics above Q1 was a decent quarter for this portfolio. The annualized dividend increased by 6.36% on a quarterly basis and 36.63% on an annual basis (primary goal); the net portfolio gain increased by 5.47% on a quarterly basis and 40.50% on an annual basis (secondary goal). Our Yield on Cost (tertiary goal) increased this quarter by 1.42% on a quarterly basis and 6.73% on an annual basis.

Future Portfolio Actions:

I will be continuing my planned purchases of WY, DE, HYD, AMLP and NSC until their cost basis reaches $2,000 as I previously mentioned. The current cost basis of each stock is as follows.

Stock Cost Basis
WY $600
DE $200
HYD $200
AMLP $200
NSC $200

Market Headwinds:

As I predicted Q1 presented many value buying opportunities. If you had cash on hand I hope you took the opportunity to put some of it to work. I think Q2 has the same potential to offer some more value buying points. Please let me know what you think Q1 holds for us in the comment section below.

Disclosure: I am long ADM, AFL, AWK, CVX, DD, DRI, GE, HSY, HYG, IBM, INTC, JNJ, MAIN, O, PEP, PGX, SO, WFC, WM, WMT, DE, AMLP, NSC, HYD, WY. 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.