Seeking Alpha

Blue Chip DRiP: October 2019 Dividend Income Portfolio Update

|
Includes: ABBV, AVGO, BP, BPR, CAT, CSCO, INGR, PPL, QCOM, T, VLO, XOM
by: Blue Chip DRiP
Summary

This is our first monthly update on dividend income received in the Blue Chip DRiP portfolio. We currently hold 58 stocks.

In October, we received a total of $416.84 in dividend income.

We made 20 buys in October for a total cost of $26,325.18. These cash investments and 6 DRiPs add an estimated $1,110.53 in forward annual dividend income.

Looking back at October 2019

Cheers to another month of increasing our passive dividend income and taking steps towards financial glory! Although the first month of the quarter is my "slowest" compared to the others, I'm very pleased with the progress this month. This is my first "Monthly Portfolio Review" since becoming an SA Contributor and I've been looking forward to it. Let's dig in to the numbers!

Dividend Income Received: Year to Date

As of 10/31/19, I've received $4382.46 in dividend income so far this year. I started the Blue Chip DRiP portfolio at the end of February, and we're full steam ahead. My goal is to receive $6,500 in actual dividend payments by year's end. I'm also hoping to reach $1,200 in dividends next month - which would be my highest single month to date. Crossing fingers! I've had a very high savings rate/investment rate (for me) this year, but that will slow down over the next few months, as my work is cyclical. Regardless, we'll continue doing our best each month to reach our financial goals, right?

Dividend Income Received: October 2019

Our October income of $416.84 was $139.97 more than the $276.87 received in July. That's a whopping 50.5% increase QoQ! None of my holdings increased their dividends in October. I did add some fresh capital, which accounts for the large jump. Since July, I added to my positions of (AVGO) Broadcom, (CAH) Cardinal Health, (CSCO) Cisco, (JPM) JPMorgan, and (LAND) Gladstone Land. I opened new positions in (INGR) Ingredion and (PPL) PPL Co. which was my highest dividend payer for the month with $72.19, boom! On a somber note, my worst performing stock to date (SUP) Superior Industries, suspended dividend payments. I lost $22.50 of income in October with that one. It's my smallest holding (0.22% of my portfolio) and I will be selling it for a loss very soon. #learningcurve.

Ticker / Stock Name Dividend Income (July) Dividend Income (October)
Broadcom $18.55 $37.10
Cardinal Health $52.92 $67.35
Cisco $17.50 $28.00
Ingredion NA $18.90
(IRM) Iron Mountain $45.83 $45.83
JPMorgan $16.00 $39.60
(NYSE:KO) Coca Cola $20.00 $20.00
Gladstone Land $5.57 $10.04
(PFF) (iShares Preferred ETF) $16.12 $15.95
(PPL Co.) NA $72.19
Superior Industries $22.50 $0
(UBA) (Urstadt Biddle) $27.50 $27.50
(VER) (Vereit) $34.38 $34.38
Total: $276.87 Total: $416.84

Stock Transactions: October 2019

We made 20 purchases, 0 sales, and 6 DRiPs (automatic dividend reinvestment). I took some opportunities to lower my cost basis on existing positions and opened one new position - (MCD) McDonald's which I discussed in this article. Between the dry powder deployment and DRiPs, I'm very happy with the $1,110.53 of estimated forward annual dividend income added to the portfolio. If only I could keep that pace up every month!!

Here's the purchases made with cash in October:

Ticker / Name Shares Price Total Invested Est. Annual Income
Broadcom 8 267.35 2138.8 84.6
(BP) British Petroleum 30 36.13 1083.9 73.2
(CAT) Caterpillar 10 117.57 1175.7 41.2
(EMN) Eastman Chemical 15 69.3 1039.5 37.2
15 69.01 1035.15 37.2
(ET) Energy Transfer 100 12.66 1266 122
50 12.44 622 61
(GD) General Dynamics 10 172.85 1728.5 40.8
6 174.86 1049.16 24.48
(IP) International Paper 30 38.89 1166.7 61.5
(JNJ) Johnson & Johnson 5 130.22 651.1 19
10 130.32 1303.2 38
(KMI) Kinder Morgan 50 20.04 1002 50
Coca Cola 15 53.55 803.25 24
McDonald's * 15 198.04 2970.6 75
(MMM) 3M 8 155.79 1246.32 46.08
10 152.1 1521 57.6
(SPG) Simon Property 10 145.85 1458.5 84
(UPS) United Parcel Service 20 113.23 2264.6 76.8
(XOM) Exxon Mobil 12 66.6 799.2 41.76
26325.18 Total: $1095.42
* = New Position 4.16% avg. yield

Here's my DRiP Purchases for October. Note - Some of these were from dividends received in September, but the DRiP didn't occur until Oct:

Ticker/Name Div. Amount # of Shares Share Price Est. Annual Income
(PFF) iShares Preferred ETF 7.99 0.22 37.22 0.44
(ARCC) Ares Capital 80 4.28 18.7 6.85
(BPR) Brookfield Capital 57.75 2.87 20.13 3.79
Broadcom 37.1 0.14 273.04 1.48
Coca Cola 20 0.37 53.84 0.59
Vereit 34.48 3.55 9.69 1.96
Total: 15.11

Diversification Checkup - Sector Allocations

Each month I review current sector allocations vs. goals. As you can see in the chart below, I'm overweight in Energy, and underweight in Technology and Utilities. I'll consider limiting my Energy purchases and spend more time examining opportunities in Tech and Utilities. I'm not a "stickler" for exact allocations, and won't buy purely based on sector, but I like to have a guideline to make sure we stay the course.

Stock Sector Current % of Portfolio Goal % of Portfolio
Basic Materials 4.94% 5%
Communications 5.94% 5%
Consumer Cyclical 4.90% 5%
Consumer Defensive 7.69% 8%
Energy 17.50% 12%
Financial 11.83% 10%
Health Care 11.48% 10%
Industrials 9.01% 10%
Real Estate / REIT 12.13% 12%
Technology 7.10% 10%
Utilities 6.23% 10%
Misc (ETF's, Funds) 1.26% 3%
100% 100%

Diversification Checkup - Individual Holdings

As a general rule of thumb, I try not to let any single position grow over 5% of the overall portfolio value. This is not a hard and fast rule, but I do like to make sure I don't get carried away with any individual holdings, no matter how glorious they may seem. Below are my Top 10 Holdings ranked by Portfolio Percentage and the income each company generates:

Ticker / Name Ranking Percentage of Portfolio Estimated Annual Income
(T) AT&T 1 3.91% $612
Simon Property 2 3.72% $604.80
(ABBV) AbbVie 3 3.53% $608.88
3M 4 3.31% $334.08
Energy Transfer 5 3.05% $860.10
(VLO) Valero 6 2.84% $306
Exxon Mobil 7 2.68% $400.20
General Dynamics 8 2.65% $179.52
(QCOM) Qualcomm 9 2.40% $212.49
Cardinal Health 10 2.37% $268.80

Blue Chip DRiP Portfolio as of 10/31/19

Last but not least, is the "whole enchilada" - a spreadsheet of the entire Blue Chip DRiP Portfolio as it currently stands. Although overall value and unrealized gains/losses are not my primary focus, this is where I keep tabs of everything. Note - I didn't capture this image of my spreadsheet until 11/1, so the "current prices" and all stats will be slightly different than on 10/31, but you get the point...

Conclusion

So there you have it. If you've hung in this long, hopefully you found some useful nuggets in my first Portfolio Review. How does it compare to your portfolio? What else would you like to see? What did you find most helpful, interesting, etc. (if anything)?

What's on tap for you in November? Watch lists? I'd love to hear from you.

PS - Thanks for clicking the "follow" button and feel free to read my other articles. Best of luck on your journey towards financial emancipation!

Disclosure: I am/we are long EVERY STOCK MENTIONED IN THIS ARTICLE (EXCEPT SUP). 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.

Additional disclosure: This is not stock advice. These are purely my opinions. I'm not a professional. Do your own research. Best of luck in your investing journey!