Dividend Portfolio Update for February 2020

Volatility is back and boy is it back with a vengeance. The VIX was flirting near the 50’s. The S&P is down nearly 13% off its highs and we are breaking records this month. The fastest correction of 10% in recorded history! The S&P dropped nearly 13% in one week. Wiping out all gains since October 2019.

We can all thank the advancements in information technology, pandemic risks, political uncertainty, globalization and the proliferation of index investing for this swift sell off. I wonder if price action like this will be the new norm going forward.

We are more hyper connected than ever globally. Information spreads quickly. Risks of fear and misinformation spreading is more prevalent today than ever.

We are flooded with information and data. I feel the ability to identify facts from opinions is a valuable skill today.

The last time I recall such violent selling was back in 2008. Brought back sweet memories this week…

Investors are scared. Sell first ask later. All you hear on the news lately is related to the spreading of the coronavirus.

Indeed worrisome, and I fully understand the selloff in the markets.

HOWEVER, uncertainty equals potential opportunity. As a long-term investor, these are the moments you should look forward to.

Time for an update on my dividend portfolio!

 

Highlights and Recap

Boeing Company (Ticker: BA)

• Boeing had their first commercial order for the year from ANA Holdings for 15 Boeing 787 Dreamliners worth $5B after zero orders in January.

Wells Fargo (Ticker: WFC)

• Bank agreed to pay $3B to resolve SEC investigation into the company’s retail sales practice from 2002 to 2016.

Altria (Ticker: MO)

• WSJ reports that the SEC opened an investigation against Altria to determine whether the risks of investing in Juul has been adequately disclosed to shareholders.

 

Buy Orders

I purchased 2 shares of Boeing Company (Ticker: BA) at $323.76, which will add an additional $16.44 to my total annual dividend income.

I purchased 2 shares of 3M Company (Ticker: MMM) at $161.59, which will add an additional $11.76 to my total annual dividend income.

I purchased 12 shares of Invesco S&P 500 High Div ETF (Ticker: SPHD) at $43.12, which will add an additional $21.73 to my total annual dividend income.

I purchased 2 shares of Boeing Company (Ticker: BA) at $304.61, which will add an additional $16.44 to my total annual dividend income.

I purchased 11 shares of Corning Inc (Ticker: GLW) at $25.45, which will add an additional $9.68 to my total annual dividend income.

I purchased 17 shares of Energy Transfer LP (Ticker: ET) at $11.21, which will add an additional $20.74 to my total annual dividend income.

I purchased 8 shares of Enterprise Products Partners L. (Ticker: EPD) at $24.26, which will add an additional $14.24 to my total annual dividend income.

I purchased 3 shares of United Parcel Service, Inc. (Ticker: UPS) at $94.01, which will add an additional $12.12 to my total annual dividend income.

I purchased 35 shares of Fidelity High Dividend ETF (Ticker: FDVV) at $28.36, which will add an additional $44.66 to my total annual dividend income.

I purchased 3 shares of Boeing Company (Ticker: BA) at $272.30, which will add an additional $24.66 to my total annual dividend income.

I purchased 5 shares of Amphenol Corporation (Ticker: APH) at $90.35, which will add an additional $5.00 to my total annual dividend income.

I purchased 2 shares of Caterpillar, Inc. (Ticker: CAT) at $121.73, which will add an additional $8.24 to my total annual dividend income.

I purchased 4 shares of Wells Fargo & Company (Ticker: WFC) at $40.84, which will add an additional $8.16 to my total annual dividend income.

I purchased 5 Shares of Waste Management, Inc. (Ticker: WM) at $109.49, which will add an additional $10.90 to my total annual dividend income.

Total dividends added this month amounts to $224.77. 😍

 

Sell Orders

There has been no sales for this month.

 

Pass Go and Collect Dividends!

AT&T Inc. (Ticker: T) paid $193.96

Bristol-Myers Squibb Company (Ticker: BMY) paid $4.95

Enterprise Products Partners L. (Ticker: EPD) paid $76.10

AbbVie Inc. (Ticker: ABBV) paid $25.96

The Blackstone Group Inc. (Ticker: BX) paid $38.43

Energy Transfer LP (Ticker: ET) paid $115.60

Caterpillar Inc. (Ticker: CAT) paid $9.27

Invesco S&P 500 High Dividend (Ticker: SPHD) paid $179.42

Total dividends paid out this month amounts to $643.69.

 

Dividend Increases & Decreases

3M Company (Ticker: MMM) raised its dividend by 2.1%, which added an additional $6.00 to the total annual dividends.

Corning Incorporated (Ticker: GLW) raised its dividend by 10%, which added an additional $2.24 to the total annual dividends.

United Parcel Service, Inc (Ticker: UPS) raised its dividend by 5.2%, which added an additional $5.60 to the total annual dividends.

Invesco S&P 500 High Dividend (Ticker: SPHD) TTM yield has increased by 0.8%, which added an additional annual dividend income of $17.34 to the portfolio.

The total dividends added this month by companies amounts to $31.18.

 

Portfolio Summary

“Click photo to enlarge”

 

• The dividend portfolio consists of 24 holdings.
• The portfolio closed the month at $145,724.45 which is -5.8% than the previous month total of $154,652.27.
• Total dividends paid this month amounts to $643.69 which is a 20.7% increase YOY.
• Dividends added from this month’s purchases and company provided increases totals $255.95.
• The portfolio is expected to generate $6,735.39 in annual dividends. That is a 28.4% increase YOY.
• Total dividends paid YTD is $940.39.

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Conclusion

Investing is a long-term game. I’m not a trader. I once was but retired that game long time ago. Trying to predict price movements in the short term did not cut it for me. The emotional swings and gains after taxes wasn’t worth it. More importantly, I determined it was more tilted to the feeling of gambling. I wanted to learn to become a real investor!

The world is highly random. Many traders believe the many trends and indicators in charts are predictable but that’s a fool’s fallacy. It will seem predictable until a week like this comes along and breaks everything. It only takes one market movement like the one we had this week to potentially wipe out gains far greater than the benchmarks.

I’ve seen it happen to many people around me over the years. 1 to 2 years of gains wiped out in a matter of weeks.

Stop losses will not save you when the buy side is nearly nonexistent. And yes, if you’re trading off margins, you better be ready to cover in all circumstance!

It’s unfortunate to see friends get hurt by such events. Observing such outcomes continue to contribute to my ever evolving investment philosophy today.

Reaching for yield in dividend stocks are just as dangerous. Unfortunately, with the low interest rate environment we are in, investors from all around the world have been driving down yields in US equities. The negative rates in some parts of the world is likely contributing.

Ticker SPHD, has not performed as well as I had hoped during this week drop but I’m not surprised. Too much money is chasing yield driving them down resulting to overpriced dividend payers in the holdings.

We really needed a nice flush and this coronavirus was the perfect catalyst.

The S&P 500 companies in 2019, returned about 92.3% of their earnings back to investors through dividends and buybacks. That’s amazing but if you bought equities overvalued, you risk reaping less of the earnings.

“Blindly buying an overpriced stock is value-destructive, a fact lost on many promotional or over-optimistic CEO’s” -Warren Buffett

Just as companies buying back their own stocks overpriced is value destructive, it’s no different for us, individual investors.

It’s more difficult to make money in stocks if you pay up for large premiums.

In investing, I believe the turtle wins the race. There are the rare cases.

The more I realize the time I have ahead of me, the more I welcome market corrections. The younger you are the more you should welcome the corrections. I am always in anticipation of one but more so lately as valuations got stretched rapidly towards the top line.

Luckily, my hedge against the downside is paying off for now. My total investment portfolio is down 4.1% YTD, while the S&P is off 8.5%. I guess I got lucky.

I’m slowly putting money back to work. Dividends are rolling in and still growing! That is what’s important for this portfolio! Hopefully, I am smart enough to make some great investments. I sure need it to hit that 10 million net worth mark! 😌

I can’t wait to see what the next month holds. Happy investing!