Dividend Portfolio Update (September 2019)

It’s been one year since I started sharing my journey building a dividend portfolio. The progress has been predictable and steady thus far. Markets have recovered quite nicely from the start of the year even with the political uncertainties clouding future guidance for many businesses.

The market return of this year’s first 3 quarters have been amazing. Quite rare from the near 20 years of investing in my life time. S&P is nearly up 19% as of this writing and we still have 3 months to go till year end.

The “Smart Money” expects 2020 recession and still large amounts of cash is being sidelined. Earnings from luxury retailers who tailor to the 1% are sending signals of drastic reductions on spending from the rich. Many analysts see this as an early sign of recession.

I feel there is a healthy dose of skepticism in the markets to keep valuations from getting out of hands. It’s like the uncertainty is keeping a lid on exuberance keeping valuations from getting too frothy.

Relative to past valuations that led to massive corrections markets don’t look all that much expensive. I feel if we had a recession, it’s likely a modest one.

When the herd runs one way, I always question and challenge myself if I should run the opposite way.

If 2020 is met with a recession, I feel it would be one of the most anticipated recession in recent times. But you know what they say, even if a recession is not likely, all the talks and anticipation can make one reality.

The risks are clear either way. There may be a window of opportunity to do some decent shopping!

Make sure you have some extra arrows in your quiver!

Anyhow, enough with the rambling! There is always a deal in the markets if you keep an eye out!

On with the details for the month!

Highlights and Recap

AT&T (Ticker: T) Activist investor billionaire Paul Singer discloses a 3.2 billion position in AT&T as he shines a light on the companies concerns and optimism. His position is a drop in the bucket compared to the total market cap of the company therefore, not much power in his hands to get them to do anything. However, the publicity is a nice welcome to shine a light on the company placing pressure to perform.

Altria (Ticker: MO) Looks like merger talks with Phillip Morris are called off. The news was followed by Juul CEO, Kevin Burn’s being replaced with an Altria executive K.C. Crosthwaite. The incoming CEO was the growth officer at Altria who oversaw the companies e-cig expansion in the U.S. He was the CEO of Philip Morris from 2017 to 2018 and has been in the industry since 1997. The tobacco industry is a unique one in my opinion. If anyone, he looks like the better leader to take the helms than Kevin Burn who has no prior experience in the industry.

Wells Fargo (Ticker: WFC) Company finally gets a CEO! A much better CEO than I was expecting. I wonder what his pay package is… Charles Scharf will depart his role as CEO at BNY Mellon to take the role as CEO/President and a member of the board as of October 21. Prior to his role at BNY, he also served as CEO at Visa.

Energy Transfer (Ticker: ET) Company will acquire SemGroup for 5 billion. Big surprise for me here with mixed feelings. I was expecting the company to deleverage going forward. Looks like a strategic long term move for the company. This is quickly becoming an even longer term investment for many investors who bought at much higher share prices. I can see why many investors are angry at the move. Investors are not happy with this acquisition because it removes the likelihood of raises in the distribution, debt reduction or share buy backs to support share prices. Looks like the possibilities of a distribution raise is less likely for the next few quarters unless management sells some assets.

 

Buy Orders

I purchased 24 Shares of Invesco S&P 500 High Div (Ticker: SPHD) at $41.32, which will add an additional $41.36 to my total annual dividend income.

I purchased 4 Shares of Johnson & Johnson (Ticker: JNJ) at $127.06, which will add an additional $15.20 to my total annual dividend income.

I purchased 18 Shares of Corning Incorporated (Ticker: GLW) at $28.15, which will add an additional $14.40 to my total annual dividend income.

The addition of dividends added to the year from this month’s purchase comes to $70.96.

 

Sell Orders

There have been no sales for this month.

 

Pass Go and Collect Dividends!

Wells Fargo & Company (Ticker: WFC) paid $5.61

United Parcel Service, Inc. (Ticker: UPS) paid $26.88

Boeing Company (Ticker: BA) paid $16.44

Johnson & Johnson (Ticker: JNJ) paid $14.25

Chevron Corporation (Ticker: CVX) paid $40.46

3M Company (Ticker: MMM) paid $60.48

Fidelity High Dividend ETF (Ticker: FDVV) paid $225.41

Qualcomm Inc (Ticker: QCOM) paid $87.42

Invesco S&P High Dividend (Ticker: SPHD) paid $162.22

This month the LBF dividend portfolio paid out dividends in total of $639.17 from 9 holdings.

 

Dividend Increases & Decreases

JP Morgan Chase (Ticker: JPM) raised its dividend by 12.5%, which added an additional annual dividend income of $15.20 to the portfolio.

Fidelity High Dividend ETF (Ticker: FDVV) TTM yield increased by 3.4%, which added an additional annual dividend income of $27.89 to the portfolio.

The total dividend increases provided by companies for the month totals $43.09.

Portfolio Snapshot

• The portfolio now consists of 22 holdings which is higher by 1 since last month.
• The portfolio closed the month at $143,139.40 which is 4.9% higher than the previous month total of $136,388.63.
• Total dividends paid this month amounts to $639.17 which is 426.8% higher YOY. That’s an all time high for collected dividends thus far!
• As of this month, the portfolio is expected to generate $6,022.06 in annual dividends. That is a 1.9% increase from the prior month which was 5,908.86.
• Total dividends paid YTD is $4,316.13.

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Conclusion

I dreamed a life where I would be free from the worries of money. A life where I live my own life on my own terms. Today, I am somewhat living that life. Thanks to passive income sources such as this dividend portfolio and rental income, I have the financial and emotional freedom to enjoy my life. Or should I say enjoy my time.

Lately, I have been focusing more of my mental energy on loved ones around me. The freedom to apply your mental energy anywhere you wish at any time you want is also an amazing benefit from achieving FIRE.

Hard work pays off. Combined with specific goals and persistence, your chances to progress and improve at any given task can be realized. A hint of obsession doesn’t hurt.

Building wealth for the average person with the average income can seem like a slow process. I hope that sharing this portfolio with friends and family will help alleviate and remove the fears of investing but also to raise a clearer expectation of building wealth. It is, in my experience, similar to laying a brick over brick one by one over a long stretch of time.

It’s a game of determination and persistence. You must put on your long term game hat. Set your vision far out and recognize that it will require you to stay engaged and take action for years on out. Financial freedom, is it worth it? 100%.

Till next month! Thanks for reading!