Dividend Portfolio Update (July 2019)

Wow! I noticed a huge spike in viewership this month. Looks like this month’s traffic alone was larger than all traffic since I began this site combined! Holy cow!😳

Just wanted to remind people that this is not investment advice and my updates are for entertainment purposes! Just sharing my experience retiring early at 35 and my journey to grow my wealth beyond FIRE (Financial Independence Retire Early)!

This dividend portfolio has been separated from my primary portfolio to slowly shift and reduce my exposure away from growth stocks.

The focus of this portfolio is to invest in dividend paying companies. I am also using the portfolio to study its ability to soften the downside against any market corrections.

Anyhow, welcome!👋

Warren Buffett often says he tap dances to work every day. I can’t recall a single day I felt that way when running my business. More like walking into a war zone was how I remember. Lately, I think I can relate to Mr. Buffett but in my own odd way. My mind is on FIRE!

Life is so much more fulfilling when you create, share, learn and give.

 

My life went from waking up because I had to, to waking up because I want to. This is bizarre even for me. It’s odd waking up some mornings with this surge of feeling grateful. I’m still trying to come to grips with these new emotions. I’m curious if others who reached FIRE have come across such feelings as well. If so, do share in the comments below!

It’s amazing how fast time flies when you’re having fun. Who would have thought learning to write could be so enjoyable. The last time I did such amount of writing was back in high school. Who am I kidding, maybe even back as far as Jr High. So, I hope you bear with me as I try to improve my writing ability. 😊

Anyhow, the markets have been flirting with all time highs this month. Dividends continue to trickle in and continue to slowly grow. It’s a great feeling to have when you know your money is being productive. I love managing my own money. It’s fun! The amount of knowledge you gain from active investing is humbling. You really do learn a lot about how the world works.

The other goal is to hit that $10,000 per year dividend income. To slowly diversify my income from being heavily weighted on real estate rental income. The objective is to create a more diversified portfolio of passive income sources that continues to grow and fund my 50 to 60 year retirement… Jesus Christ… every time I mention that… I need time to soak that in…

To help keep my finances organized in this journey, I current use Personal Capital. I also use Mint.com but Personal Capital has the edge when it comes to UI and options. The simple layout of your total financial picture along with the analysis of your investment accounts are better than Mint, in my opinion.

Ok, lets get to it!

Highlights and Recap

United Parcel Service (Ticker: UPS) Company reported earnings that achieved record profit growth. Beating analyst estimates with revenue up 3.4% and operating profits up 6.3%. Next day air volume was up 30% YOY. Business is showing great signs of growth even in times of uncertain trade dispute among China and other countries.

Boeing (Ticker: BA) Company continues to take hits due to uncertainty on when the 737 MAX will clear to fly. Boeing customers such as American Airlines and Southwest are beginning to drastically cut forward earnings expectations due to the expected delay in shipments for their planes. CEO may temporarily shut down production of the MAX if the delay goes beyond the current expectations for October. Stock shows resilience but under pressure. Company still has a back log of about 4,621 MAX plane orders with only 387 deliveries.

Raytheon (Ticker: RTN) Company reports strong Q2 revenue growth of 8% YOY. Sales of missile systems gained 8% with margins expanding by 11.4%. Raytheon’s space and airborne systems segment which is their second largest business jumped 13% but margins dropped by 12.6%.

AT&T (Ticker: T) Company reports earnings in-line with estimates. Cord cutting continues at a dramatic pace and expected to be peaking, while wireless business remains strong. Massive FCF of 8.8 billion up about 72% in comparison to Q2 of 2018! Even with the large Time Warner acquisition resulting to huge increase in debt on their balance sheet, AT&T manages to improve their FCF over the last few quarters. What is amazing is how they have managed to reduce their dividend payout ratio by 34% down to about 50% based on previous 6 month earnings. If they remain on this path, investors should feel quite good about their dividends going forward.

Qualcomm (Ticker: QCOM) Company missed on revenue numbers and beat on EPS estimates. Revenue is down -12.7% YOY. Ouch. Sales for the quarter was weaker than expected, part to do with weak 4G smartphone sales. Forward guidance was much lower than many expected as well. Company seems to be excluding numbers from Huawei for Q4 guidance due to negotiations that are still ongoing. Looks like there will be potential for upside surprise if Huawei agreement is reached. Qualcomm agrees to partner with Tencent to create 5G versions of gaming phones. Tencent is China’s largest mobile software company with a market cap of about 450 billion.

 

Buy Orders

I purchased 16 Shares of Iron Mountain Inc (Ticker: IRM) at $31.42, which will add an additional $39.04 in dividend income per year.

I purchased 3 Shares of 3M Company (Ticker: MMM) at $164.97, which will add an additional $17.28 in dividend income per year.

I purchased 2 Shares of Boeing Company (Ticker: BA) at $352.12, which will add an additional $16.44 in dividend income per year.

I purchased 12 Shares of Invesco S&P 500 High Dividend (Ticker: SPHD) at $42.63, which will add an additional $20.68 in dividend income per year.

I purchased 17 Shares of Fidelity High Div ETF (Ticker: FDVV) at $30.27, which will add an additional $20.91 in dividend income per year.

The total addition of dividends added to the year from this month’s purchase comes to $114.35.

Sell Orders

There have been no sales for this month.

Ahhh… Dividends

Iron Mountain Inc (Ticker: IRM)  $9.78

Altria Group Inc (Ticker: MO)  $32.00

Invesco S&P 500 High Div (Ticker: SPHD)  $154.95

JP Morgan & Co (Ticker: JPM)  $30.40

This month the LBF dividend portfolio paid out dividends in total of $227.13 from 4 holdings.

Dividend Increases & Decreases

Invesco S&P 500 High Dividend (Ticker: SPHD) TTM yield has increased by 0.8%, which added an additional annual dividend income of $14.21 to the portfolio.

Enterprise Products Partners (Ticker: EPD) raised its dividend by 0.6%, which added an additional annual dividend income of $1.71 to the portfolio.

Wells Fargo (Ticker: WFC) raised its dividend by 13.3%, which added an additional annual dividend income of $2.64 to the portfolio.

The total dividend increases provided by companies total $18.56.

Portfolio Snapshot

“Click photo to enlarge”

The LBF dividend portfolio closed the month at $133,671.34 which is 2% higher than the previous month total of $130,988.08. The portfolio ended the month with 19 holdings.

As of this month, the portfolio is expected to generate $5,726.07 in annual dividends. That is a 3.3% increase from the prior month which was at $5,545.43. The average current yield for the portfolio sits at 4.28%.

 

Conclusion

At this point in my life, any stocks I buy, I plan to never sell. My plans are to invest in companies that have the best probabilities of outlasting me.

I find myself becoming more conservative in my investing than in my earlier years. Perhaps it’s because of this subconscious reminder that I am now no longer working therefore should be more risk adverse. They say as you get older, your risk tolerance drops. Perhaps it’s simply human nature.

However, I hope my risk appetite remains healthy even when I am in my 80’s like Mr. Buffett and Gates.

Small or large, progress is progress. What’s most important is moving forward. Sometimes you have setbacks and sometimes you hit a lucky stride and leap forward.

“Take your time to absorb the lessons that come with the journey.” Lifebeyondfire

Building wealth is like watering a plant and watching it grow in slow motion. It’s a slow and gradual process. Just as rock climbers need to take their time to secure themselves every section of their climb. I see the process of wealth building sharing similar attributes. It feels as though I am currently in the process of securing a portion of my climb in wealth.

Anyhow, it’s been a great month overall. How was your month? Thanks for reading.