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How I Grew My October Dividend Income By 19.9%

The DGI For The DIY portfolio was built to provide me with a growing dividend income stream that will eventually help fund my retirement.

The portfolio continues to do as it was designed by producing a steady increase in dividend payments over the course of the year.

October continued this trend, as the dividend income earned was 19.9% higher than that received in October of 2016.

This increase came from a mix of organic growth of the dividend payments made by companies I hold, the impact that dividend reinvestment makes by increasing share count, and new purchases made in the portfolio.

October Dividend Income Report

Here is the breakdown for October, and how the income compares with 2016’s numbers:

Table of dividend growth for October, 2017.
Dividend Income Growth – October 2017

The 19.9% growth was a nice number for me, but more than half of the increase came from new positions in Altria Group $MO and Nike Inc. $NKE.

Removing those two from the equation leaves roughly 8.6% growth from the legacy stocks in the portfolio.

This number is low due to a few stragglers in EOG Resources $EOG, MDU Resources $MDU, and Occidental Petroleum $OXY. Those three companies are all seeing slower growth due to weakness in the oil & gas sector, which has kept dividend growth at a minimum.

Three other companies: Chatham Lodging Trust $CLDT, Philip Morris International $PM, and STAG Industrial $STAG have also given small or non-existent dividend increases, and are providing higher income primarily because of dividend reinvestment.

The two top performers were Dr Pepper Snapple Group $DPS and Watsco Inc. $WSO, who both provided double-digit increase in income.

I’m hopeful that the pace will pick up for the first three mentioned, as crude oil prices have continued to improve of late. WTI is now around $57, demand is strong and growing, and crude storage levels have dropped around the world. If this trend continues it will bode well for EOG, MDU, Occidental and other energy related positions in the portfolio.

Dividend Income History

Here is the updated table of the dividend income received in the portfolio since its start in 2013:

Table of dividend history for October, 2017.
DGI For The DIY: Portfolio Dividend History

As you can see the portfolio has consistently shown ~20% income growth over the course of the year. This is a pleasant surprise for me, as I was expecting growth to slow some from last year’s 15.6% number.

With two months go I am approaching last year’s income level, and with November and December being the two highest income producing months of the quarter, it is looking like the portfolio will hit the $2,000 mark in dividend income for the year.

This is an exciting milestone, and is remarkable to me considering the account provided just $1,119 in income in 2014. As the numbers get bigger, the progress becomes more and more visible.

Looking forward to next milestone of $3,000!

Recent Dividend Increases

Announce DateCompanyTickerPrevious Payout RateNew Payout RateSequential IncreaseYear Ago Payout RateYoY IncreaseDividend YieldLINK
10/11/2017Thor Industries, Inc.THO$0.3300$0.370012.12%$0.330012.12%1.14%LINK
10/12/2017Omega Healthcare Investors IncOHI$0.6400$0.65001.56%$0.6106.56%9.27%LINK
10/13/2017Dominion Energy IncD$0.7550$0.77001.99%$0.70010.00%3.79%LINK
10/18/2017Visa IncV$0.1650$0.195018.18%$0.16518.18%0.70%LINK
10/27/2017AbbVie IncABBV$0.6400$0.710010.94%$0.64010.94%2.96%LINK
11/2/2017Starbucks CorporationSBUX$0.2500$0.300020.00%$0.25020.00%2.09%LINK
11/2/2017Stag Industrial IncSTAG$0.1175$0.11830.71%$0.1171.43%5.00%LINK
11/9/2017AmerisourceBergen Corp.ABC$0.3650$0.38004.11%$0.3654.11%2.02%LINK
Averages:8.70%10.42%3.37%

There has been a flurry of announcements in the last month, and several of them have been big increases.

Thor Industries, Visa, AbbVie, and Starbucks all announced double-digit increases to their payouts, and Dominion also gave a small sequential bump to provide a 10% increase over the 2016 payment.

Omega Healthcare also announced another penny raise to its dividend, making it 21 straight quarters now with a dividend increase.

The sequential increase of 1.56% doesn’t look impressive, but that increase is 6.56% when compared to a year ago. That kind of growth rate coupled with a dividend yield of 9.3% leads to some serious income growth with dividend reinvestment.

STAG announced another small raise, as it is working to lower the payout ratio. With this increase the payout ratio stands at 84% of FFO. With a goal of an 80% AFFO payout ratio, it may be another year or so until higher dividend growth returns.

Employment Change Affects Portfolio

I recently had a big change in my professional life, as the small engineering company I’ve worked for since I graduated from college was acquired a larger regional engineering firm.

With that acquisition comes changes to my retirement plan, meaning there will be no further cash contributions made to this portfolio.

The new company has a 401k plan, which I will contribute to and receive a company match on. However, that will be a new account and will likely be limited to managed funds rather than individual equities.

This may lead to a change in strategy with this portfolio, but for now I plan on continuing with the automatic dividend reinvestment on all positions. I also plan to continue writing updates on this portfolio and tracking its performance.

Conclusion

October was another excellent month for the portfolio, as my dividend income increased by nearly 20%. Additionally there were several new dividend increase announcements made by companies I own that will lead to more income growth going forward.

I hope this update finds all my readers well. I’d love to hear how you are doing with your investments in the comments below.

Happy Investing!

8 thoughts on “How I Grew My October Dividend Income By 19.9%”

  1. Happy to read about your dividend increases Eric. as well as your new employer! I had the pleasure of using a A.O. Smith hot water dispenser at the airport in Beijing, China last week. I actually thought of you since I remember you own the stock.

    Black Hills Energy announced their 2nd dividend increase this year. It was a nice surprise. It was reported in Barron’s this week. ABBVIE’s dividend increase was really large! When possible, I enroll in the company’s DRIP plan and reinvest the dividends.

    We are looking forward to dividends on Nov 15 from ABT, ABBV, LNT, HRL & PG!! Also looking forward to December’s dividends $$$

    Happy Veteran’s Day!

    Joe

    1. Joe,

      Thanks for the well wishes, I appreciate the comment!

      AOS is a company that I’ve written about multiple times when listing some of the best high dividend growth companies, but unfortunately for me is one that I’ve yet to actually buy. I remain impressed with the company, and if you take the time to read any of their investor presentations, I think the future is still bright for the stock. I may need to just buy some and get a position started!

      I noticed that BKH recently announced a dividend increase, buy didn’t realize that was the second increase this year. With a 3.3% yield and reasonable growth expectation, BKH is probably one of the better buys in the utility sector right now.

      You have some nice names there on your upcoming dividend list. Been debating about opening a position in HRL. If it ever hits a 2.5% yield I might have to pull the trigger on it.

      Happy Veteran’s Day to you as well. My wife is a veteran, as is most of her family, so it is an important day for us.

      Best wishes,

      Eric

  2. I enjoy your dividend process. I embarked on increasing my cash flow a couple of years ago. Just checked my Fidelity account and found I had received $21,000 in dividends, about $12,000 in deferred or tax free dividends. I have reinvested most of it.

    1. Chip,

      Thanks, great to hear you are enjoying the updates. Sounds like you are doing quite well with your change in approach, congrats on your success!

      Eric

    1. Thanks for the words of encouragement!

      Btw, I enjoyed your Dave Chappelle pic on your blog. I feel like that too sometimes! =)

    1. Capturando Dividendos,

      Thanks so much for the positive feedback, it’s great hearing that people are finding the updates useful.

      Sometimes I wonder if writing them is worth the effort, so hearing your comment really does help me keep up the motivation.

      Have a great day!

      Eric

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