Monthly Review Of DivGro: September 2021
- This article reviews DivGro, my portfolio of dividend growth stocks. I provide a summary of transactions and indicate how those transactions affected DivGro's projected annual dividend income.
- This month is the first time my projected monthly dividend income topped $3,000!
- In September, I added shares to six existing positions. DivGro still contains 95 different positions.
- Twelve DivGro stocks announced dividend increases in September.
Once a month, I review my portfolio of dividend growth stocks, DivGro. My goal with these reviews is to share updates to my portfolio and to detail the dividends I received during the month. I also look at how DivGro's projected annual dividend income (PADI) has changed.
In September, I added shares to six existing positions and twelve DivGro stocks announced dividend increases. The net result of these changes is that PADI increased by about 5.9% in September. Year over year, PADI increased by 15.7%.
As for dividend income, in September I received dividends totaling $4,632 from 48 stocks in my portfolio, a year-over-year increase of 13%. So far in 2021, I've collected $27,762 in dividends or about 80% of my 2021 income goal of $34,500.
DivGro's PADI of $36,400 means I can expect to receive $3,033 in dividend income per month, on average, in perpetuity, assuming the status quo is maintained. But DivGro's PADI should increase over time because I invest in dividend growth stocks. Furthermore, I plan to reinvest dividends until I retire, so DivGro's PADI should continue to grow through dividend growth and through compounding.
In September, I received a total of $4,632 in dividend income from 48 different stocks, the second-highest monthly total since I founded DivGro in January 2013:
Source: Unless noted otherwise, all charts in this article were created by the author from portfolio spreadsheets
Here is a list of the dividends I collected in September:
- Archer-Daniels-Midland Company (ADM) - income of $74.00
- Aflac Incorporated (AFL) - income of $33.00
- Amgen Inc (AMGN) - income of $158.40
- Anthem, Inc (ANTM) - income of $11.30
- Atmos Energy Corporation (ATO) - income of $62.50
- Broadcom Inc (AVGO) - income of $108.00
- American States Water Company (AWR) - income of $31.03
- BlackRock, Inc (BLK) - income of $144.55
- Cummins Inc (CMI) - income of $72.50
- Canadian National Railway Company (CNI) - income of $60.25
- Chevron Corporation (CVX) - income of $134.00
- Digital Realty Trust, Inc (DLR) - income of $52.20
- Enbridge Inc (ENB) - income of $66.21
- Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO) - income of $224.00
- Eaton Vance Tax-Advantaged Dividend Income Fund (EVT) - income of $203.25
- Gilead Sciences, Inc (GILD) - income of $213.00
- The Home Depot, Inc (HD) - income of $115.50
- Honeywell International Inc (HON) - income of $65.10
- International Business Machines Corporation (IBM) - income of $164.00
- Intercontinental Exchange, Inc (ICE) - income of $33.00
- Intel Corporation (INTC) - income of $69.50
- Johnson & Johnson (JNJ) - income of $133.56
- Lockheed Martin Corporation (LMT) - income of $104.00
- Main Street Capital (MAIN) - income of $53.30
- McDonald's Corporation (MCD) - income of $64.50
- 3M Company (MMM) - income of $111.00
- Microsoft Corporation (MSFT) - income of $56.00
- NextEra Energy, Inc (NEE) - income of $38.50
- AllianzGI Equity & Convertible Income Fund (NIE) - income of $475.00
- Northrop Grumman Corporation (NOC) - income of $62.80
- Realty Income Corporation (O) - income of $35.33
- Public Service Enterprise Group Incorporated (PEG) - income of $51.00
- PepsiCo, Inc (PEP) - income of $150.50
- Pfizer Inc (PFE) - income of $117.00
- Pinnacle West Capital Corporation (PNW) - income of $207.50
- Public Storage (PSA) - income of $120.00
- QUALCOMM Incorporated (QCOM) - income of $47.60
- Raytheon Technologies Corporation (RTX) - income of $30.60
- Snap-on Incorporated (SNA) - income of $73.80
- The TJX Companies, Inc (TJX) - income of $26.00
- T. Rowe Price Group, Inc (TROW) - income of $108.00
- The Travelers Companies, Inc (TRV) - income of $88.00
- Tyson Foods, Inc (TSN) - income of $66.75
- UnitedHealth Group Incorporated (UNH) - income of $87.00
- Union Pacific Corporation (UNP) - income of $51.36
- United Parcel Service, Inc (UPS) - income of $51.00
- Visa Inc (V) - income of $28.80
- Valero Energy Corporation (VLO) - income of $98.00
The chart below shows DivGro's monthly dividends plotted against PMDI. Clearly, quarter-ending months are huge outliers:
For this reason, I now create a rolling 12-month average of dividends received (the orange bars) plotted against a rolling 12-month average of PMDI (the blue, staggered line):
While I would prefer receiving more evenly distributed dividends, that preference wouldn't influence my investment decisions.
In September, the following stocks announced dividend increases:
- Accenture plc (ACN) - increase of 10.23%
- American States Water Company (AWR) - increase of 8.96%
- JPMorgan Chase & Co (JPM) - increase of 11.11%
- Lockheed Martin Corporation (LMT) - increase of 7.69%
- McDonald's Corporation (MCD) - increase of 6.98%
- Microsoft Corporation (MSFT) - increase of 10.71%
- Realty Income Corporation (O) - increase of 0.21%
- Philip Morris International Inc (PM) - increase of 4.17%
- Starbucks Corporation (SBUX) - increase of 8.89%
- Texas Instruments Incorporated (TXN) - increase of 12.75%
- Verizon Communications Inc (VZ) - increase of 1.99%
- W. P. Carey Inc (WPC) - increase of 0.19%
I like seeing dividend increases above 7%, and seven of the twelve increases top that expectation. The arithmetic average of this month's dividend increases is 6.99%, which easily beats inflation.
Due to exchange rate fluctuations, the income I project from the following stocks will decrease:
These changes will increase DivGro's PADI by about $199.
In September, I wanted to add mainly high-yielding stocks to my portfolio in a push to achieve my goal of increasing DivGro's PADI to $37,500 by year's end. I targeted discounted stocks in my portfolio that were not yet full-sized positions.
Here is a summary of my transactions in September:
Increased Stock Positions
Atmos Energy is discounted by 16% to my fair value estimate of $106. While the stock's yield is only 2.83% at $88.78 per share, its 5-year dividend growth rate of 8.23% is attractive, so I decided to add a few shares. DivGro's PADI will increase by $75 due to this addition.
Chevron is the top-ranked Energy Sector stock in Dividend Radar. With a yield of 5.28% at $104.33 per share, I decided it was a good time to turn my CVX holding into a full-sized position. The buy added $268 to DivGro's PADI.
I focused on Verizon in a recent Dividend Increases article, noting that the stock was discounted by about 15%. While VZ's dividend increases are anemic (about 2% every year), the stock yields a generous 4.74% at $54.30 per share. This buy added $76.80 to DivGro's PADI.
This buy is due to the assignment of a put option. MO yields 7.91% at $45.86 per share and this buy added $360 to DivGro's PADI. My fair value estimate of MO is $57, so I think the stock is discounted by about 19%!
Increased Closed-End Fund Positions
Last month, I reported particularly thrilling distribution increases from ETO (26%) and EVT (12%). Those increases added $440.40 and $211.20 to DivGro's PADI, respectively. So I thought it was opportune to add more shares to these positions, and also to NIE:
- Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO) - added 250 shares and increased position to 1,250 shares
- Eaton Vance Tax-Advantaged Dividend Income Fund (EVT) - added 250 shares and increased position to 1,250 shares
- AllianzGI Equity & Convertible Income Fund (NIE) - added 250 shares and increased position to 1,250 shares
DivGro's PADI will be increased by $537.60 (ETO), $487.80 (EVT), and $380.00 (NIE). That's a substantial addition, and I'm looking forward to collecting these distributions in the next year or so!
In all, these buy transactions increased DivGro's PADI by about $2,185.
Here is a summary of various market indicators, showing the changes over the last month:
|Aug 31, 2021||35,360.73||4,522.68||15,259.24||1.304||16.48|
|Sept 30, 2021||33,843.92||4,307.54||14,448.58||1.529||23.14|
In September, the DOW 30 dropped 4.3%, the S&P 500 dropped 4.8%, and the NASDAQ dropped 5.3%. The yield on the benchmark 10-year Treasury note rose to 1.529, while CBOE's measure of market volatility, the VIX, increased by 40.4% to 23.14.
Here's a chart showing how the stocks and funds in DivGro performed over the past month:
September was a tough month and only a few DivGro stocks ended the month in positive territory. DivGro essentially matched the performance of the S&P 500.
Given DivGro's current market value and the total capital invested, the portfolio has returned about 118% since inception. But calculating the IRR (internal rate of return) gives a better measure of portfolio performance, as IRR takes into account the timing and size of deposits since inception. DivGro's IRR is 16.1%.)
I track the yield on cost (YoC) for individual stocks, as well as an average YoC for my portfolio. DivGro's average YoC increased from 3.81% last month to 3.91% this month.
Percentage payback relates dividend income to the amount of capital invested. DivGro's average percentage payback is 25.4%, up from last month's 21.0%.
Finally, DivGro's projected annual yield is at 6.22%, up from last month's value of 5.87%. I calculate the projected annual yield by dividing PADI ($36,400) by the total amount invested.
Here's a chart showing DivGro's market value breakdown. Dividends are plotted at the base of the chart so we can see them grow over time:
It would be interesting to see how the markets perform in the last quarter of 2021. September certainly saw a lot of volatility! DivGro is performing quite well, and I'm happy to note that I'm well on my way to achieving my dividend income and PADI goals for 2021!
Please see my Performance page for various visuals summarizing DivGro's performance.
Thanks for reading and take care, everybody!
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL, ABBV, ACN, ADM, ADP, AFL, ALL, AMGN, AMZN, ANTM, APD, ATO, AVGO, AWR, BEN, BLK, BMY, BNS, CB, CMCSA, CMI, CNI, COST, CRM, CSCO, CTAS, CVS, CVX, DHI, DLR, DTE, ENB, ETO, EVT, FDX, GD, GILD, GOOG, HD, HON, HRL, IBM, ICE, INTC, ITW, JNJ, JPM, KO, LMT, LOW, MA, MAIN, MCD, MDLZ, MDT, MMM, MO, MRK, MSFT, NEE, NFLX, NIE, NKE, NNN, NOC, O, ORCL, PEG, PEP, PFE, PG, PM, PNW, PSA, QCOM, RTX, RY, SBUX, SNA, SRE, SYK, TD, TJX, TROW, TRV, TSN, TXN, UNH, UNP, UPS, V, VLO, VZ, WPC, XEL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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