Dividend Portfolio Update (June 2019)

Your money should be working hard for you 24/7. No longer the days when I would wake up 6AM in the morning, grind through the long day and arrive home at 11PM. Those days are long over, and boy am I glad I’ve escaped the rat race.

It has been around 11 months since I began this portfolio and the snowball effect is clearly visible. I continue to throw all dividends generated by the portfolio right back into the fund each month. Fortunately, even after reaching FIRE, I don’t need the dividends to sustain my life.

The portfolio’s primary focus is on dividend growth with appreciation coming second. My expectations for this portfolio going forward is to shelter my finances from inflation and diversify my income away from real estate income.

The timing has been perfect for me as the historic run in markets does have me slightly concerned. Dividend investing comes with some interesting hedging properties. Investing in value and dividend stocks tend to come with lower beta.

The goal is $10,000 in annual dividends! The journey may seem long but by checking on your progress on a monthly basis will help you keep focused.

“What gets measured, gets improved.” – Peter Drucker

So, with that in mind, let’s get into the details!

 

Quick Recap

Raytheon (Ticker: RTN) There was a merger of equals announced between Raytheon and United Technologies (UTX) this month. The combined company will be called Raytheon Technologies if merger finalizes. UTX has been on my wish list for many years and looks like I can cross this one off the wish list thanks to the merger. The prospects of the merger create some interesting potential for the combined company in the space race arena.

AbbVie (Ticker: ABBV) News broke out this month that ABBV will be acquiring Allergan (Ticker: AGN) for 63 billion. The acquisition results to some high level of debt that I’m not too comfortable with and gives me mixed feelings about this one. The debt in exchange for diversification away from AbbVie’s huge revenue reliance on their hit drug Humira seems to be the tradeoff. The potential synergies amongst the two companies seem little interesting. Dividends seem to be safe but on thin ice after the merger. Revenue uncertainty combined with political risks are weighing on the stock bringing valuations down.

 

Buy Orders

I purchased 6 Shares of 3M Company (Ticker: MMM) at $160.33, which will add an additional $34.56 in dividend income per year.

I purchased 5 Shares of United Parcel Service, Inc. (Ticker: UPS) at $98.14, which will add an additional $19.20 in dividend income per year.

I purchased 7 Shares of Invesco S&P 500 High Div (Ticker: SPHD) at $41.15, which will add an additional $11.69 in dividend income per year.

I purchased 10 Shares of Fidelity High Div ETF (Ticker: FDVV) at $29.15, which will add an additional $12.20 in dividend income per year.

I purchased 7 Shares of AbbVie Inc. (Ticker: ABBV) at $67.84, which will add an additional $29.96 in dividend income per year.

The total addition of dividends added to the year from this month’s purchase comes to $107.61.

 

Sell Orders

There have been no sales for this month.

 

Sweet Sweet Dividends

Wells Fargo & Company (Ticker: WFC)  $4.95

United Parcel Service, Inc. (Ticker: UPS)  $22.08

Boeing Company (Ticker: BA)  $12.33

Chevron Corporation (Ticker: CVX)  $40.46

Johnson & Johnson (Ticker: JNJ)  $14.25

3M Company (Ticker: MMM)  $47.52

Fidelity High Div ETF (Ticker: FDVV)  $216.46

Qualcomm (Ticker: QCOM)  $87.42

Invesco S&P 500 High Div (Ticker: SPHD)  $155.83

This month the LBF portfolio paid out dividends in total of $601.30 from 9 holdings.

 

Dividend Increases

There have been no dividend increases for this month.

 

Portfolio Summary

“Click photo above to enlarge”

The LBF portfolio closed the month at $130,988.08 which is 8.5% higher than the previous month total of $120,669.92. The portfolio ended the month with 19 holdings.

As of this month, the portfolio is expected to generate $5,545.43 in annual dividends. That is a 1.97% increase from the prior month which was at $5,437.82. The average current yield for the portfolio sits at 4.37% adjusted in proportion to weight.

A great free online tool I use to help track all my finances is Personal Capital and Mint.com.

 

Conclusion

While I was on a 10-day road trip this month, great hard-working productive companies provided 9 additional paydays. What a great feeling to know your money is working hard and staying productive while you have the freedom to live your life the way you desire.

Investing in the markets opens a whole new arena to seek out opportunities in life. This month presented some great opportunities as well but now that I am FIRE (Financial Independence Retire Early), I am learning to work with the flame I have burning. Learning to roll this FIRE snowball in effort to create a much bigger one to expand my options in life, as well as my loved ones around me.

Next month will consist of only 4 holdings paying out dividends. I do have a list of 12 companies that pay dividends on July, but all are expensive. If there is one thing I hate, I hate buying stocks overpriced.

However, waiting on a great deal on a stock sometimes may take many years. Sometimes you average in as prices go up. As long as you do not place your position into a holding all at once, you may potentially have better opportunities for better prices over the period of time. Sometimes you pay more, sometimes you pay less. Sometimes a better opportunity presents itself. Disperse your risk.

June was an amazing month of returns for investments. It’s hard to recall single month returns such as this month. S&P is up 7% in the month of June alone! That is crazy and quite rare. S&P YTD return is clocking in at 19%! Surprising returns especially with all the geo-political and trade war issues ongoing this year.

Looks like many of us with exposure to markets have gotten a nice wealth bump this month. Looking forward to the next month! Thank you for reading.