Now that another month is in the books, you know what that means! It is time for the next installment of our Dividend Income from YOU the bloggers series. This is one of our favorite articles to write each month because both are extremely motivated by the hustle, hard work, and amazing results exhibited by so many in the dividend growth community. For those of you that are new followers, each month, we aggregate as many dividend income summaries from the community as we can into one article so we can share the results with all of you. Here is the June installment of the Dividend Income from YOU the Bloggers series!
Dividends Are Coming – 162.91 (Euros) – DAC starts this month off right! DAC received a MASSIVE dividend from Shell and make sure you enjoy that nice dividend increase from Philip Morris this month!
Dividend Seedling – $33.96 – We’re expecting this to be the first of many new personal records this month! Congrats on raising the bar a little higherEng Seedling!
My Dividend Dynasty – $939.27 – Whoa. Almost cracking the $1K mark! Even though it wasn’t your highest recipient, I love the Pfizer (PFE) dividend you have going on. It is pretty impressive. Keep up the work and you’ll continue to set the bar higher and higher.
Balanced Dividends – $1,946 – There we go, crossing the 4 digit and close to the $2K. Nice job BD, keep it up!
Dividend Guy Blog – $319.10 – Nice Job DGB! You are well on your way and are definitely putting the capital to work. You had a different bunch of stocks pay you, that I don’t traditionally get to see, such as Honeywell (HON), UPS & Microsoft (MSFT). Please keep it up!
Steps to FI – $1,066.02 – Steps to FI joined the four-digit dividend income club for the first time in June! It will be the first of many +$1,000 dividend income months! Congrats.
Dividend Vet – $532.44 – DV’s posted a 10% year-over-year dividend increase. Man oh man, that is an awesome list of stocks that you received paychecks from too.
Dividend Portfolio – $98.51 – Just on the doorstep of crossing $100! Man, you’ll get there in September DP. Keep hustling and keep up the hard work.
Pollies Dividend – $532.76 – The Vrijheid fund continues to grow and produce impressive results! We’re loving that dividend you received from Shell this month as well, since we are both fellow shareholders.
Dutch Independence – 89.11 Euros – Woah, woah, woah. DI – a 71% increase compared to last year. That is just incredible!
Dividend Compounder – $127.26 – There were a lot of moving parts in this summary. Some sales, some purchases, and some awesome dividend increases. All of which produced awesome results for DC.
All About the Dividends – $650.27 – What a freaking spike in June 2018 compared to June 2017 and 2016. You continue to just crush it in 2018!
Dividend FIREman – $1,099.75 – The fire continues to burn for our favorite FIREman. For the second consecutive month, DF crossed the $1,000 mark. You’re growth rate is darn impressive!
Dividend Income Stocks – $280.41 – You had our favorite words in your post this month DIS – A NEW PERSONAL RECORD. Congratulations on raising the bar once again and we look forward to you beating this mark shortly.
Screaming Little Man – $4,175.36 – Yes, you read that correctly. SLM earned over $4,000 of dividend income in June! HOLY SMOKES SLM! By the way – CONGRATS on seeing your portfolio cross $1M for the first time!
Tawcan – $1,690.82 – Bob continues his insane 2018 by posting yet another RIDICULOUS month of dividend income. Congrats on another new record!
Fiscal Voyage – $739.98 – Dividends made up just under half of FV’s total passive income totals for the month, thanks to rental income and income from cryptocurrency mining!
My Road to Wealth and Freedom – $1,431.29 – Mutual funds and etfs paid some huge dividends this month for MRWF. Money continues to flow in and all these purchase will continue to produce insane dividend growth rates going forward!
Retire Before Dad – $712.84 – RBD, you are making moves, increasing amounts received by 18% overall, compared to prior year and I am excited with what you’ll do in these last 2 quarters!
Tall Investing – $494 – Bodda bing, bodda boom! I see Pepsi (PEP) was your biggest hitter in your portfolio, a portfolio that had 28 companies pay you! Impressive and congrats on the large amount of dividend income this month!
Wallet Squirrel – $8.50 – Almost the double digits! Nice job with continually monitoring that dividend income, making more investment and having other avenues of where income is coming from. Keep pushing hard WS!
Passive Income Pursuit – $983.71 – PIP delivers a solid 11% year-over-year increase compared to last June! Plus, PIP really felt the impact of dividend increases, as six companies announced dividend increases during the month and increased his forward income $64!
DesiDividend – $2,035 – Desi….ARE YOU SERIOUS? Crossing over the $2,000 mark is just incredible! And your income increased over 40% compared to last year? You have allocated some serious capital to your portfolio this year!
Dividend Quest – $710.57 – This was just a rock solid, dividend paying month for Quest. Nothing flashy, just a bunch of great stocks paid Quest a ton of income!
Dividends and Hobbies – $699.18 – DH posted a ridiculous dividend growth rate during the year, aided by massive payouts from XOM and PEG!
The Money Sprout – $807.07 – Yet another blogger that set a new personal record during the month! Congrats TMS. This is the first of many new records, so get used to this feeling!
Money Maaster – $972.17 – MM was oh so close to cracking $1,000 for the first time. But that didn’t stop him from setting a NEW RECORD for dividends received during the month. With an insane YOY growth rate of 217%, we’re sure you will cross $1,000 in no time.
Dividend Family Guy – $767.35 – Even though this was not a record setting month for DFG, the fact that you nearly doubled your income from last June is great!
A Frugal Family’s Journal – $192.99 – You love that oil! I see Shell (RDS), Exxon (XOM) and Chevron (CVX) all paid you! Congrats on almost clipping $200, impressive.
Divhut – $976.79 – Another stellar month posted by Keith! Those dividends received from AFL, ADM, and SO were pretty freaking sweet! Congrats on nearly crossing $1,000 this month without the help of any mutual funds.
Engineering Dividends – $1,032.69 – ED, congratulations for setting a new record and crossing the $1,000 dividend mark for the first time. Get used to being in the club our friend!
Dividend Dozer – $153.91 – There were a lot of great companies that paid Dozer this month. Plus, one strong dividend from VTI. Solid month!
Dividend Earner – $1,613.13 – DE crushed it this month and received a heavy dose of dividends from the banking sector! Keep the good times rolling DE.
Passive Income Maverick – $1,334.31 – PIM continues to dominate 2018 and is over halfway towards achieving his goal of receiving $15,000 in dividends in 2018. Looks like you may need to increase that goal at the rate you are receiving dividends this year!
I Want Dividend – 222.43 Euros – Just a casual 315% increase compared to last year. That is a pretty freaking impressive growth rate IWD. Holy smokes!
American Dividend Dream – $450.44 – WOW! Nice job ADD, even with the crawling and handling the adoption, gardening, etc.. the dividends still do their thing. Keep it up!
Drip Til Rich – $344.01 – Nice job on receiving your first dividend from L Brands (LB) and I hear you on Target’s (TGT) dividend increase – but like you, always appreciate and understand an increase, is still an increase.
Mr. Free @ 33 – $1,449.18 – Another solid month for Jason! As he is living in Thailand, his dividend income continues to increase, each month. Further, he had a whopping 55 dividend stocks that paid him! Now that’s diversification. Keep killing it Jason!
Dividend Hawk – $1,274.56 – That was a LONG list of dividend payments you had Hawk! Your 30% increase from last year is something I am in awe of, you are pushing the envelope, that’s for sure. You’ve got a pretty nice Intel (INTC) dividend that is sent your way, not to mention – 4 monthly dividend payers, which is awesome. Congrats Hawk!
DivvyDad – $202.66 – You know a dividend growth rate is impressive when it can’t even be measured!! Congrats on increasing your dividend income $202.66 compared to last June
Money Hungry – $614.12 – Money Hungry delivered an excellent month and even set a new personal record! The dividends from your Vanguard funds continue to grow at an insane rate and will only continue to cause you to set new records each quarter! We can’t wait to see what your December has in store for you!
Dividend Daze – $138.39 – Seven great, powerful companies delivered a nearly 50% increase compared to last year for Daze!
Dividend Driven – $1,198.13 – Heck yeah Driven! This is another excellent month. Those ETFs came through in the clutch for you and had some nice increases compared to March.
Financially Free in 10 Years – 22.97 Euros – Mr. Robot’s dividend charts continue to crush it and trend in the right direction. We are seeing a lot of growth compared to 2017. Keep it up!
Total: 45 Bloggers Received $40,266.97 in Dividends in June (depending on the exchange rate used at the time of the calculation)
INSANITY. What more can we say? This community received over $40k in dividend income this month.. ARE YOU SERIOUS? 2018 has been an incredible year for some many reasons. We are all receiving great dividend increases based on the impact of tax policies, and as Lanny highlighted in an article last month, the impact is really starting to be felt. On top of that, the power of dividend investing and the fact that we continue to make EVERY DOLLAR COUNT helps fuel out dividend fire. Let’s make the most out of the second half of the year everyone and continue to push ourselves. Look how many records were set this month? Let’s continue this trend throughout the second half of the year!
We’re always talking about side hustles on our website. We love those little activities that help us put a few extra dollars in our pockets each month. One of our favorites each month is Ibotta. We’ve both managed to earn hundreds of dollars using this easy-to-use shopping app. We thought it would be a good idea to perform a detailed review of the app and share some pros and cons we have identified after several years of usage. Here is our Ibotta Review!
What is Ibotta? How Do You Earn Cash Back?
Ibotta is an app that offers cash-back on everyday purchases. This includes grocery, cleaning, and everyday household items. I will discuss the categories/discount offerings in greater detail later in the article. Ibotta allows you to earn cash back three ways:
Selecting offers on everyday products purchased in store
Linking a rewards card
Online purchases (similar to Ebates).
Personally, I earn Ibotta through the the first method listed above. To earn, after preparing my grocery list, I will open the App and identify the products or rebates that I wish to earn during my shopping trip. Then, you watch a brief video or answer a question about the product to unlock the offer for redemption. Once my shopping trip is complete, I will open the app once again to redeem the rewards. To redeem the rewards, select the redeem option, scan your receipt, and select the offers that you were able to find during the shopping trip. Boom, just like that, you have earned some cash back.
Overall, the experience takes minutes. This includes identifying the offers and the redemption phase. The ease of use is one of my favorite aspects of the App. For those of you that want a more detailed explanation, here is the “How To Use” guide on the company’s website.
How do I sign up?
It is very easy to sign up for the app and should take you minutes to download the app and create a code. In fact, at the time of this article, there is a pretty generous sign-up bonus. After your first use, you will receive a $10 sign-up bonus and you will receive a $5 bonus for each friend you refer. The beauty is that you are eligible to cash out after $20 in earnings, so you are already halfway there just by signing up for the app and using it once.
Of course, here is our REFERRAL LINK for any new user that would like to sign-up.
Ibotta Review – Pros
-Ease of Use – The app is very easy to use and I enjoy using it. The interface makes it easy to quickly identify the store where you are shopping, find potential discounts (organized by categories), read/understand the discount, add it to you available offers, and scan your receipts at the end of your shopping trip. Overall, this process takes minutes, which is nice when you are trying to squeeze every precious minute out of your day. I’ve found that some apps have a burdensome, slow, clunky, interface that discourages me from using it. That is not the case with Ibotta.
-Rebates are Offered on a Variety of Products – Ibotta offers products in all categories that may appear on your weekly grocery list. Discounts are offered over the following categories: produce, boxed goods, dairy/eggs, frozen, meats, seafood, beer/wine, beverages (non-alcohol), candy, snacks, beauty/personal care, pet, health & wellness, household goods. Within each of these categories, there are many products offered.
-Rebates Are Offered on Common Products, not Just Specialty Brands – This is the best part. The last bullet point showed that Ibotta offers goods in a variety of categories. Some apps may offer goods that are too expensive to purchase with the rebate or are such a specialty/niche item that it may not apply to you. That is not the case with Ibotta. The goods offered on Ibotta are common products that users would consider purchasing without the rebate (there are some exceptions to this, of course). Many of the products are household brand names, such as Kraft, Coke, Budweiser, Miller, Quaker Oats, Special K, etc. Also, the app offers discounts on generic products as well. For example, Ibotta may offer a $.25 rebate for purchasing any brand of milk, any box cereal, or simply purchasing a banana.
-Low Cash Out Threshold and Simple Process to Transfer to Venmo or Paypal – Most rebates are between $.25 to $1.50. It would suck if you had to wait to cash out your rewards until you reached $100 in rebates, wouldn’t it? For Ibotta, you are eligible to cash out your rewards after earning $20. To cash out, you simply link your Paypal or Venmo account to the app and transfer the funds accordingly. After registering your bank account the first time, the process to cash out your rewards takes 30 seconds or less.
-$1 Off Uber Ride (periodically) – This discount is awesome. Ibotta offers $1 per Uber ride if you access Uber through Ibotta app. So for those that are heavy Uber users, you can finally earn cash back on all of those rides! This offer isn’t always available, which is the only downside. But I am always excited to use this offer when it is available!
-There is always a $.25 Cash Back Reward for scanning a receipt, even if you do not purchase any goods I know what you are thinking. What happens if you do not purchase anything that has an eligible rebate? Ibotta thought about this as well. The app offers a $.25 “Any Item” rebate that can be redeemed with any purchase. Simply select this option and scan your receipt.
-Bonus Offers – Ibotta even offers bonuses categories. There may be additional dollars off for purchasing a certain brand, a $2 bonus if you redeem 3 rebates during a weekend, etc. I do not promote shopping just for the sake of earning a cash back reward, that defeats the purpose. But if you are purchasing an item regardless or were on pace to redeem three rebates, it is nice to receive the bonus!
Ibotta Review – Cons
-Trader Joe’s and Aldi are not included – This isn’t a surprise since Trader Joe’s and Aldi are owned by the same company (Albright). However, my wife and I have been shopping primarily at Aldi and will use other grocery stores to pick up the items that we could not find at the store. Unfortunately, since Aldi is not registered with the app, we cannot claim the $.25 any-item rebate each shopping trip or benefit from discounts on generic goods (such as $.25 for bananas, peppers or milk).
-Further, Ibotta Does Not Have All Local Grocery and Convenience Stores – Ibotta is registered with one of our local grocery stores, but not the other. So while one local chain decided to sign-up with the cash-back app, there are plenty of other local supermarkets that are not eligible for discounts. So if you prefer to shop and support the local grocery store or farmer’s market, you may be out of luck.
-Some Products Are Not Stocked at Store – While Ibotta offers some awesome discounts on products and alcohol, you cannot always find them at the grocery store. It may tell you that a product is eligible for a rebate at Target, Walmart, or Costco; however, after navigating the store’s aisles, the product is nowhere to be found. It would be nice if there was an “is this product available at your location” option.
-Cash Back for Shopping by visiting a site through Ibotta is not as high as other websites or apps. I mentioned earlier that you can also earn via Ibotta in a manner similar to Ebates.com or Swagbucks. But I also mentioned that I do not use this cash back feature for Ibotta. You can earn a percent cash back by shopping online at a store by simply entering the website through the app rather than going to the website directly. However, what I have found is that Ibotta’s cash back percentage is not as high as others. I created the table below to show Ibotta’s cash back percentages compared to Ebates and Swagbucks for some of the places I shop online (Excluding Amazon – since their cash back tiers are complicated on the various websites). As you can see at the table, for each store listed, I was able to find a higher cash back percentage at one of the alternate websites.
Overall, I am very high on Ibotta. I have enjoyed using the app and have earned nearly $200 using the cash-back app. In my opinion, the pros easily outweigh the cons and I would recommend that people try the app (Sign-Up here) to see if you enjoy the experience as much as we do. Earning a few extra dollars by taking an extra minutes to your shopping experience is well worth it. If you haven’t given the app a shot yet, why not give it a shot and see if you like it as much as we do?
Have you used Ibotta before? If so, what are some of your pros and cons for the app? Do you disagree with any of the items in our Ibotta Review? Do you typically prefer a different app that offers similar rewards?
I hope everyone got the gist that I was buying a stock from my July dividend stock watch list! It surely did not take me long to deploy capital in a highly valuable company. Now, I may not have bought a stock in the order I thought that I was going to do, but still fit in my plan for purchases. It excites me to say, that the love for coffee, dividends and company culture, has engaged me to purchase stock into Starbucks Corporation (SBUX)!
The Stock Purchase – Starbucks Corporation (SBUX)
This isn’t the first time that any of us have purchased the wonderful green logo’d company. Bert just made a sizable investment earlier and my fiance, actually, owns around 100 shares worth, as well (she loves Starbucks, so I pretty much asked – why don’t you own them?). Outside of that, I always had thoughts on investing into Starbucks (SBUX), given what they do from a community and a, “gathering people together”, standpoint. In addition, they’ve been going through headwinds, with Howard Schultz stepping away from the company, the CFO retiring and the announcement of domestic store closings. Honestly, one could easily state there are way too many stores on top of each other! Further, to offset the bad news, they also announced a 20% dividend increase (as a dividend investor, it just doesn’t get any better) and a statement to return $25 billion of cash in total (dividends and buy backs) through fiscal year 2020.
Dividend Diplomat Stock Metrics
Price to Earnings: At $48.50 with a forward earning project of $2.48, this equated out to a p/e ratio of 19.5. The ratio is easily in the range that I like to see and shows sign of undervaluation, as the S&P 500 is in the low 20’s.
Dividend Growth: They recently announced a growth rate of 20%, which was par for the course. Further, the 3 and 5 year dividend growth rate stands at over 23%! See the Impact of the Dividend Growth Rate.
Dividend Yield: With the $48.50 price point, at a dividend of $1.44, their yield was at 2.97%, well above the S&P 500 (on average) but just below my dividend yield, overall, on my portfolio. However, that incredible growth rate makes up for the lower yield.
Payout Ratio: Based on forward earnings of $2.48 and a dividend of $1.44 per year, this equates to a payout ratio of 58%. This is definitely within the dividend payout ratio range I like to see. See why the Payout Ratio is an extremely important metric.
Here is proof of my purchase:
In summary, I purchased 25 shares on 7/5/2018 of Starbucks Corporation (SBUX) at $48.50 with a $4.95 trading fee for a total cost of $1,217.45. The 25 shares adds $36.00 to my forward dividend income project. Further, their dividends are received on “off-months” or February, May, August and November.
Are you loving that coffee brew, as much as I am? A dividend track record of Starbucks (SBUX), with a continuous line, extending to the door, is exactly the cup I want to drink. They finally have come down to earth on their earnings multiple, and I was very happy to finally have shares of the roast in my portfolio. I don’t expect 20%+ dividend increases going forward, but I expect the brand, loyalty and following to survive & continue on. Though I only have $9 per quarter going forward, once my fiance and I are married, that will surely change. What’s nice is that I am confident, all things remaining the same, that with the yield & modest growth rate, the $9 will become over $10 in a year. I cannot wait! This is also a new position in my portfolio.
What do you think of the purchase? Like or hate the price point? Do you have other insight that I don’t have? Further, do you believe the company is losing it’s luster or has a lot further to decline? Thank you for sharing your thoughts everyone and, as always, good luck and happy investing!
Half of 2018 is officially in the books! I am also another year older and have one year left to enjoy my 20s. 2018 has been an investing year unlike any other in the past. There have been a ton of great buying opportunities and companies are providing shareholders with some crazy dividend increases and share buyback programs. Lanny and I are having a blast following the twists and turns of Mr. Market. Now that another month has come to a close, it is time to take a step back and review the dividends received during the month. Here is my June dividend income summary!
June Dividend Income Summary
This June, I received $1,156.68 in dividend income. This represents a 40.57% increase compared to the dividends received in June 2017. The following chart provides a detailed breakdown of the individual dividends received. Please note that a “W” represents a dividend received in my wife’s account.
Here are some of the highlights and notes from June:
This was the first dividend I received from PEP after my large purchase in the second quarter. I was excited that I was able to make this purchase before the ex-dividend date. Hopefully you can see why! On top of that, this was the first dividend we received from our purchase of Dominion in the first quarter. Unlike PEP, I missed the ex-dividend date for that purchase, so I had to wait a long time to receive my first dividend from them.
Dividend summaries from the third month of a quarter are always fun since this is month that mutual funds make their distributions. This is the first year where my wife and I are maximizing our 401(k) contributions. As you can see in the top left portion of our table, the growth rates for VINIX, VITSX, and VIIIX show the impact of this additional capital being deployed. The results are really starting to show!
There are too many examples to list out individually, but I wanted to make this broad comment. The impact of dividend increases during the year was HUGE in June. We have noted countless times that 2018 has been insane in terms of dividend increases. Six months in, it is easy to visualize the impact of these increases. I can’t help but smile when I see many dividend increases compared to last year that are greater than 10%.
I’m continuing to love the new, large monthly dividend from Realty Income. I purchased the company three times in January and February, increasing my monthly dividend income from $8 to over $20. This is one of my favorite positions!
June Portfolio News and Dividend Increases
n this section, I’ll review two different ways that my forward dividend income will increase during the month: dividend increases and investment activity. The first table I will review is the dividend increases during the month.
I happened to receive a ton of dividend increases during the month, which doesn’t surprise me based on the last edition of the “expected dividend increases” article series. Of the dividend increases, two jumped out at me and caught me by surprise. First, I was not expecting this large of an increase from PM given their recent performance and the downward trend of the industry during the year. I was expecting a much smaller increase! Second, I think all of us we caught off guard by the 20% SBUX increase. I did not include the additional 40 shares I purchased at the end of the month in the table above. Instead, I wanted to show how I received an extra $10 in dividend income from this dividend increase alone during the year! As I said earlier, these dividend increases continue to be insane and provide us with great results.
Next, I wanted to take a look at the dividends received from new stock purchases during the month and from our 401(k) and HSA contributions. In total, I added $186 in dividend income from these purchases.
As you can see, I made two purchases during the month. Consolidated Edison was purchased during the month while Lanny and I were painting his house. I was pretty darn excited to add to my position in this electric utility! Second, as I’ve talked about countless times over the last week, I added 40 shares to my position in Starbucks. Both individual stock purchases added $117 in new dividend income to my annual total. In addition to individual purchases, we added additional income from our 401(k) maximization strategy (that I discussed earlier). It has been a treat adding this consistent new dividend income each month and I couldn’t be happier that we finally decided to implement this strategy.
In total, dividend increases and new purchases added $221.61 in dividend income! This doesn’t even factor in DRIP!
One again, I couldn’t be happier with my June Dividend Income summary. Investing has been a lot of fun in 2018 and I have been blessed with some additional capital to deploy. I’m trying as hard as I can here to make every dollar count and do whatever it takes to continue pushing the dividend snowball forward. The results are real folks. What we are all doing is making a huge difference. Let’s do amazing things in the second half in 2018 and finish the year strong.
What was your dividend growth rate this month? Did you set a record in June? What was your largest holding in the month? Are you ready to CRUSH the second half of 2018?
Wow! We are finished with half the year already! The sun is bright, shining and…hotter than heck! In fact, the temperature reads 95 degrees tonight and I am loving it. There were a great deal of positive events in June, that I am excited to write about, but earning dividend income just added to the fun of summer! Sadly, our Cavs were out of the Finals and the NBA free agency has been crazy already. However, this is about dividend income, so let’s get to the numbers!
I received a total of $1,828.54 of dividend income in June. Another record month for me, to say the least! I cannot even rub the blur out of my eyes, when I see this figure. It helps that the mutual funds paid out higher than normal dividends (due to all of the increases this year), as well as earlier purchases that are starting to bear fruit. Outside of that, everything went smooth, with dividends coming and being reinvested. The 401(k), Health Savings Account (HSA) and all dividends are automatically invested/reinvested and helps take the emotion out of timing & making a decision. Also, to find out why I max out my 401(k) and HSA – please refer to the 3rd part of my tax series, as that describes the magnitude of benefits to increase the amount you can invest due to reduction in taxes. Here is the breakdown of dividend income for the month of June!
Just astonishing and I am almost running out of room! Those retirement dividends are kicking into high gear. Vanguard European ETF (VGK) paid a much higher dividend this go around, as the international entities have either increased or brought back dividends, due to improved performance.
Similarly, I have split out between the individual stock amounts and the retirement accounts, as the ” – R” indicates a retirement account dividend (or the furthest column to the right). I separate these two, as I like to know what portion of my dividend income is coming from those retirement accounts that I cannot touch until 59.5 (barring any other usage rule I could use). Here, it shows that I received a total of $946.08 (up from $627.54 last year) or 52% of my income from retirement accounts and the other 48% was from my individual taxable account portfolio. Additionally, this shows from retirement accounts that I’m all ready for my set it and forget it mentality to keep that income going. To see my portfolio – one can go to our portfolio summary page.
Dividend Income Year over Year Comparison
Delta (DAL), Dominion (D) and Kroger (KR) were the new names in 2018 versus 2017. Each company or entity on this list paid substantially more than prior year, hands down. I could not be any happier about this! What’s amazing are the unexpected dividend increases starting to make a gigantic impact. Which names am I referring to? Aflac’s (AFL) 15% dividend increase, Intel’s (INTC) 10%, Norfolk’s (NSC) 18%; just to name a few. How great has 2018 been for dividend investors? This represents a 22% dividend income growth, year over year. Last year’s June represented a 36% dividend increase, but I attribute that to the maximization of the 401(k). I am going to keep this up, to ensure I can increase the dividend income by 22% for next year!
A month wouldn’t be a month without high quality companies increasing their dividend! See the small chart below for the details on the dividend increases announced this month that are holdings in my portfolio.
Not only is the temperature hot outside, but these dividend income investments are lighting it up on the increase board! Philip Morris (PM) and Caterpillar (CAT) were the surprises this go around. PM increase of 6.54% was insanely larger than prior year and you can see the impact of $25.75 from that increase alone. Further, the 10% increase from CAT wasn’t too shabby either. Then, on June 28th, Kroger (KR) came to finish my month with a 12% dividend increase. 5 companies increasing their dividend in a single month for me is not normal, but I am not complaining, either. In order for me to add $52.96 to my dividend income, I would have to invest $1,513 at 3.50%!
Dividend Income Conclusion & Summary
The name of the game is to learn and act in the right manner, using what you have learned. The plan is to maximize every dollar for investment opportunities and live a balanced life. My hope is my dividend income, shown above, shows the community that one can use dividend income as a revenue engine to take back controlof your life. Dividend investing, once you learn the right way, becomes easier to do and starts to make quite a bit of sense!
As I discussed in my normal monthly expenditures article, this dividend income would cover well over 100% of my average $984 monthly expense, which includes the mortgage, property taxes, insurance and utilities. Given that this is a quarter end, it’s not uncommon to be able to crush through the coverage of these expenses. In similar fashion – all of the investing from last year and moves this year, shows that my aim to save 60% of my income,and making every dollar count, has allowed promising results already this year.
Another month down and it was a fun, record-setting June! I am sure there are many more who established new highs for the month and even for your lifetime, to this point. June was a really strong month of dividend income, as the previously announced increases are taking effect, as well as the quarter end dividend income payers & mutual funds. I hope the heat continues (you know I’m monitoring that A/C usage!) throughout the rest of the summer months and that the dividend income keeps flowing. As always, I am excited to read the comments and thank you, the community, for stopping by; as you are helping me on my journey to financial freedom!
What is a dividend? Someone new to investing and hearing about the word, “dividend”, may ask. Therefore, I thought I would take time, to break down what a dividend actually is, what the benefits are and what it can do for you, as an investor and individual looking to invest.
What is a Dividend?
By sheer definition, a dividend can be two things, simultaneously. A dividend is money paid to a shareholder of a company, whether that be from the net income (profits) or from their reserves (retained earnings/profits). Similarly, dividend has the word, “divide” within the word. One could look at a dividend, as dividing the profits among shareholders and to retain profits within the company. For instance, we will take a look at the company – Johnson & Johnson (JNJ is their ticker symbol) and their recent quarterly financial statement filing from Quarter 1, below:
We can see, above, that the company had net earnings or net income of $4,367, which is actually $4 billion dollars, as this is disclosed in millions. Based on the number of shares that are outstanding to individuals, when dividing the profits by that number, you are calculation earnings per share or EPS. Therefore, JNJ earned $1.63 per share of stock outstanding. How did JNJ “divide” those earnings or profits? The last line, you can see, they had a dividend given to each share of stock owned, in the amount of $0.84. JNJ, then, gave a dividend of cash (money) out of their profits to each share holder of stock in the company. If you owned one share of JNJ stock, you received $0.84. If you owned 10 shares of JNJ stock, you received $8.40 and so forth. Therefore, they divided their earnings in two ways. One was an $0.84 cash dividend and the remaining $0.79 was to keep in reserves or retained earnings. Make sense?
What is so great about a Dividend?
Now that we understand what a dividend is, so what? What is so great about a dividend? Why would you, someone who owns share in a company, care about a dividend?
Healthy: First, a dividend shows (typically) that the company is healthy & profitable. It becomes very insane when companies are paying a dividend that is greater than their earnings per share, consistently. We can touch on more of that later. Therefore, if a company has the ability to pay the dividend, because of earnings, it shows their financial health is “well”.
A Return: Secondly, a dividend payment is a way to return your investment back to you, as a shareholder, in the form of a dividend. You have invested your money to buy and own a share(s) of a company. What better way to reward a shareholder, during profitable years, than the form of a cash dividend?
Income Source: This doesn’t come to a shock to those who frequent our blog, as dividends are one of our main sources for financial freedom. A dividend can be an income source for you. See our monthly income articles or our portfolio page. You’ll see the amount of projected income from our investments, at any given time. A dividend can be a very valid and reliable income source for you. You can use a dividend payment to pay for your living expenses. Further, there is preferential tax treatment to dividends, see this article on what $50,000 in dividend paymentslooks like!
Reinvestment: When you receive a dividend, and depending on which brokerage you use, you have the ability to automatically reinvestment RIGHT back into the SAME company who paid you, thus, increasing your shares. When doing this, this will ultimately (should, at least) increase your income going forward. The other option you have is to build up cash from dividends and find a new investment. I currently have automatic reinvestment on, but that is based on personal preference.
Now, That’s a Dividend!
I hope that helps answer the question, “What is a Dividend?”, with full details. Who is ready to invest their money into a share of a company, that produces a dividend? Look at those benefits above, it just doesn’t get any better than that. Please do not hesitate to leave a question in the comments below, send us an e-mail or find us on twitter. We are looking forward to what you may have to say and hope we talk soon! Good luck and happy investing to all!
Now that June is over, it’s time to turn the page to July. For some reason, with each new month, I have a feeling that it brings new opportunities. By opportunities, I mean new stocks to have on the watch list, as there usually is never two consecutive watch lists that are the same. I would say that goes to show you how much activity can happen, in such a short period of time. Lebron just left Cleveland, again, and turning to look at stocks helps ease the pain of seeing a fellow-Akron-born native depart. Without further-ado, here are my dividend stocks I am watching for July
Dividend Stock Watch List
Delta (DAL) – Delta Airlines has been on my watch list before, and even in recent months this year. As of June 29th, they were trading at $49.54 and analysts have an expectation of $5.87 earnings per share this year. Their price to earnings ratio is at 8.44, which is staggeringly low. They opened up this year at $55.35. Talk about a steep drop, where they have plummeted 10.5%. The most enticing piece for me, here, is that they have a recent history of stronger than usual dividend growth rates, as the 2017 increase was 50%. Can Delta (DAL) keep that growth rate up? I actually think they can do it, at least, one more time, before going down to the 15-30% growth rate range. I am flying high on this stock, right now.
Starbucks (SBUX) – Ah, yes, a dividend stock watch list wouldn’t be complete with the iconic symbol that we see across the nation. As they continually go through management shake-ups, as well as other news related to their product offerings, including store closures across the United States, I don’t believe this changes much, if anything, for the long-term performance of the ‘bux. In order for them to solidify the shareholder appetite, they boosted their share repurchase program and jacked up the dividend another 20%! This was off-schedule and was well-timed with the negative press going on. What has happened to the stock since? They have dropped over $5 per share and, as of June 29th, were at $48.85 or 14% decline since the start of the year. Further, analysts have a $2.42 earnings per share expectations, to which this equates out to a 20.18 price to earnings ratio. This is still slightly on the higher side, but much less than where they historically trade at. I am a fan of what Starbucks (SBUX) brings to the table and am keen on keeping them on my radar.
Cisco (CSCO) – They are back baby! Cisco is back on my list, as they have started to come back to the ground, quite a bit, falling $2-$3 in recent weeks. However, they are actually up quite a bit, since the start of the year, but they also have a much higher yield, after they announced a 13.79% dividend increase earlier. At a price of $43.03 and earnings per share expectations of $2.59, the price to earnings is 16.61. Therefore, they are in the middle of SBUX and DAL, as well as hold a spot on my dividend stock watch list.
Now, I currently have over $2,000 to deploy out into the market and I want it to be deployed in the best spot imaginable. However, I also know that I must take the emotion out of the decision, use the numbers as fact and invest based on the best decision at that time, with the best information I have at that same time. I currently have a position in 2 of the 3 companies above, with CSCO and DAL. However, my position with DAL is not as significant with only ~30 shares. I could double that position up and still have cash left over. CSCO already has almost $3.5K in my portfolio, based on market value, and DAL is less than half of that. Therefore, DAL would be the better option right now.
Dividend Stock Watch List Conclusion
Therefore, as it relates to my dividend stock watch list above, my order of operations, pending upcoming prices on these stocks, Delta, Starbucks and Cisco would be my order of preference. I’ll be highly targeting my favorite airline and I’ll follow it up with one of my favorite cups of ‘Joe’!
I would anticipate making a purchase within the next 5-8 business days/trading days. Reason for this, I am waiting for a brokerage transfer to go through, as that would cause less speed bumps along the way, given I have current ownership in DAL and CSCO. In addition, my trading cost may either be free, $3.95 or $4.95 – so not a drastic impact, when making this decision. Further, the other niece piece is the timing of the ex dividend dates. In order, from DAL, SBUX and CSCO, the ex dividend dates are August 10 (expectation), August 8 and July 5. Cisco, being at the bottom of my 3, the July 5th ex-dividend date is okay.
What would you pick out of my top 3 dividend stock picks above? Going more towards flying, food or technology? Are you staying away from any of them, pending new information? Any thoughts on my factors above? Thank you everyone for coming by and sharing your thoughts. As always, good luck and happy investing.
The month of June was coming to a close and I was looking for another investment opportunity. For the second half of the month, I had one of the most publicized companies on my watch list. The company’s stock price had began to fall. Having added to my position earlier in the year at a higher price, I was instantly excited for the opportunity to add to this coffee giant. Here is why I added to my position in Starbucks (SBUX) in June!
Starbucks (SBUX) – the earnings release and the dividend increase
SBUX suddenly popped on my radar again once the company filed their earnings release on June 19th. I’m sure most of you know where I am going with this. Because immediately following the press release, the pundits that were dissecting the filing were out in full force. Before I review the details and analysis by outsiders, I wanted to cover the part that was exciting for a dividend growth investor. In this press release, the company announced a 20% increase in their quarterly dividend, from $.30/share to $.36/share. A heck of an increase that as a shareholder, I was very pumped to receive! And on top of that, the company announced an increase $10b increase in their current share buyback program. They are now eligible to purchase up to $26b of the company’s stock. Both of these moves will generate some nice value and returns for shareholders.
Sure, while there were a lot of positives in the earnings release. In addition with the dividend increase, the share buyback, the was other great news. For example, Starbucks Rewards membership continues to increase, the company announced new efficiency and cost-cutting programs, and the company continues to improve its digital footprint. However, there were some noteworthy items that caused the company’s stock price to decrease.
Reading other articles, the key takeaway was the slowing of growth in the company. The company’s sales growth was below their estimates and the company slightly reduced their EPS guidance for the remainder of the year. The Frappachino, SBUX’s golden child, experienced poor sales during the quarter as well. When looking at the income statement, an investor will see growth in the dollars listed for sales, stores, income, etc. However, over the years, SBUX has relied on their growth to continue moving the company forward. Thus, when growth was sluggish during the quarter, the sellers came out in full force.
Personally, while there may be some turbulence in the short-term, I am long on the company’s long-term growth prospects. Every time I drive by a SBUX store, the line is long and the drive-thru is wrapped around the store. Further, the $8b retail distribution deal with Nestle will help expand the SBUX brand and access new customers. I understand the concerns, and they are warranted. But the slowing of growth and the negative news was not enough to stop me from proceeding with my analysis of SBUX.
the dividend diplomats’ stock screener – sbux
After I saw the earnings release, the dividend increase announcement, the additional share buyback program, and the subsequent tumble of their stock price, I knew I wanted to invest more in the company. However, it wouldn’t be an investment purchase without running the investment through the infamous Dividend Diplomats’ Stock Screener. For this analysis, I will use my purchase price of $50.00/share, and annual dividend of $1.44/share, and a forward EPS figure of $3.32 per share, the low end of management’s GAAP EPS guidance per their recent earnings release. Here are the results
Price to Earnings Ratio Less than the S&P 500 – The S&P 500 typically has a P/E ratio in the mid-20X earnings. At the time of my purchase, SBUX had a ratio of 15X earnings. SBUX passes this metric with flying colors.
Dividend Payout Ratio < 60% – We typically use a 60% threshold when reviewing a company’s payout ratio. We believe this percentage point allows a company to continue to grow their dividend going forward without sacrificing the safety of their dividend. SBUX’s dividend payout ratio of 43% is well below our threshold. Once again, SBUX passes this metric.
History of Increasing Dividends – I already discussed how SBUX increased their dividend by 20%, which is freaking amazing. Typically, I look for companies that are Dividend Aristocrats or have long streaks of increasing their quarterly dividend. But I also understand that this can’t always be a reality. I also know that SBUX is new to the dividend paying game, as they paid their first dividend in 2010. SBUX has actually increased their dividend each year since this date. Therefore, I am content with the shorter streak as management has demonstrated their desire to continue to increase their dividend.
5-Year Average Dividend Yield – I like using five-year average dividend as a quick valuation metric. If the company’s yield is above their 5-year average yield, it could potentially indicate that the company is undervalued. SBUX’s yield at the time of purchase was 2.88%, which exceeded their 5-year average yield of 1.5%!
sbux – the purchase
The results of our stock screener were great and SBUX passed all the metrics listed above. Ultimately, despite some of the news in their earnings release, I became confident in the long-term growth prospects of the company and was ready to dive in and make a purchase.
At the end of June, I added 40 shares of Starbucks (SBUX) to my current position. This purchase added $57.60 in forward dividend income. Now, I own 81.2456 shares of the company and will receive $116.99 in annual dividend income from them. I am pretty content with my current position in the company. Barring the price continuing to fall, I will set my sights on building other positions or establishing a new position in my portfolio.
What are your thoughts about Starbucks right now? Are you buying this dip? Or are you less optimistic about the long-term success of the company than me? Are you excited about their dividend increase as well?
Dividend investing at it’s finest! I thought now would be a great time to reflect on what has occurred over the last 6 months in the dividend income portfolio of mine. I do not mean just any old reflection, but I am going to be specifically talking about dividend increases and what the impact has been on my portfolio this year. Tax reform has truly showed their colors and companies have been sending the savings, or part of, to their shareholders.
Why dividend increases matter
Why does this matter? Why would dividend increases even matter to my investment journey? This is where a little bit of a breakdown needs to occur. The cost of goods increasing; say milk, gas and food or for what we hear in the news, “inflation” has gone up and usually continues to go up over time. Now, as the community knows, dividend increases are typically a requirement for when we invest! We don’t just invest for current income, but we are investing for the future potential income too!
Why do dividends increasing in the future matter from companies that we own? When the price of goods are increasing, don’t you want that income to continue to grow, in order to offset or “trump” the inflation? For example, Johnson & Johnson (JNJ) increased their dividend 7.15% back in April. The 7.15% dividend increase far outpaces the rate of inflation, which has been stated at a tad over 2% over the last year. Does this start to make sense now? Buying a dividend income stock, that increases their dividend every year, not only pays you a solid rate each year, but they also increase their dividend in a way that outpaces or should outpace the enemy called, “Inflation” (see Our Top 5 Foundation Stocks for great dividend income stocks that have increased their dividend each year for 25+ years!).
Here is the other kicker that I wanted to mention. Most of us are all working for employers and, if we are lucky, receive a raise from our employer or from our clients. However, sometimes the raise doesn’t touch the rate of inflation or sometimes we don’t receive a raise, depending on performance of what we do, how the company or even how our clients are doing. A dividend income stock that increases their dividend, each year, can also take care of that. I have been lucky and blessed to have the ability to invest into dividend income companies.
Dividend Increase Impact Through Six Months
Now, with all of that being said, what have dividend increases done for my portfolio through the end of June 2018? I’ll list out each dividend increase from the monthly posts, the rate of increase, each dollar impact and the total. My goal is to show the community, the readers and those that are curious about dividend investing, how wonderful of a plan that it is! They say proof is in the pudding and here, my friends, is proof that the dividend increases impact my portfolio in a massive way. Here are my dividend increase results through 6 months of 2018:
The dividend increase announcements that these companies have had this year have been nothing more than remarkable. Kinder Morgan (KMI) has had the most intense increase of 60%, adding over $40 to my dividend income portfolio. Further, the unexpected dividend increase announcement from not just Philip Morris (PM), but from John Deere (DE) and Caterpillar (CAT), were well received and tremendously impacted my forward income.
Based on my forward income, at year-end of 2017, this $329.84 was a 3.39% add! Of course, one can annualize the percentage and equate to 6.78%. In order to add the $329.84 to your forward dividend income, based on a 3.50% dividend yield, one would have to invest a whopping $9,424!! Please re-read that. I would have to invest ALMOST $10,000 into the stock market in order to generate that much forward income. What did I have to do, in this case? Not a DAMN thing. Obviously I had to commit the up-front capital, in order to make the investments into high quality dividend income companies, but each dividend increase did not take a decision from me. This should be the point where it all, for a lack of a better way to phrase it, “clicks”. This is in line with why we think the power of the dividend growth rate is real!
**to note – this article was written before Kroger (KR) announced a dividend of increase, which would have added $4.28 to the above total!
Dividend Increase Six Month Summary
First, I am lucky to make enough money and to save as much as I can, to make investments into dividend growth stocks. However, I hope that my goal of driving home that dividend investing is extremely powerful. As you noticed above, not every dividend increase is gigantic, in fact, about half are below the double digit mark. The huge BUT here, is that each dividend increase when added together, produces incredible results. Each of those dividend increases above, added up to $329.84 and it would take almost a $10,000 investment for that to happen! Does it take saving, investing and patience? Hell yes it does and a “whole lot of it”, in this game. However, with these results, could you do it, too?
Thank you everyone for coming by to read another dividend investing lesson with the proof in the pudding example above. I love to be full disclosure, especially if it helps beginners, experiences investors or readers who simply want to learn more. Have you been enjoying each and every dividend increase announcement? Are you experiencing the same benefits above? Does this help show the benefits of being a dividend investor? Please comment below and, as always, good luck and happy investing!
I can’t believe I am about to say this. But half of 2018 is in the books already. Man oh man, where has is time going? As the calendar gets ready to turn, it is time for another installment of the “Expected Dividend Increases” summary article. For those of you that are new to the website, each month, I try my best to compile a list of companies that are expected to announce a dividend increase in the coming month. While I can’t include every company in the article, I do my best to capture as many Dividend Aristocrats and other companies as possible. Let’s see which companies are expected to announce dividend increases in July!
actual dividend increases in june
Before I jump ahead to the coming month, I thought I would review the companies that I discussed in the June edition of this article. Let’s see if the company’s delivered as expected!
Company #1: Kroger Co. (KR) – KR crushed their earnings release during the month, that’s for sure. However, it appears that the company is set to increase their dividend in August rather than June. After this last earnings release, I’m pretty darn pumped to see what KR has in store for investors. I’m expecting a pretty nice, double-digit increase.
Company #2: Target Corp. (TGT) – TGT’s dividend growth rate stalled in 2017 (3.3%) compared to their five-year average. But based on performance over the last 12 months, I was not expecting the company to return to their recent history of increasing their dividend by a double-digit percent. Rather, their $.02/share increase in their quarterly dividend, or 3.23%, was very much in line with my expectations. I just wish it would have been higher than that 5% discount they offer when we use their red card each shopping trip (kidding).
Company #3: Caterpillar Inc. (CAT) – CAT came roaring back in 2018. After a small $.01/share increase in their quarterly dividend in 2017, CAT increased their dividend $.08/share. This was a 10.26% increase. That’s what we are talking about CAT.
Company #4: Realty Income (O) – O announced an ever-so-slight increase in their monthly dividend in June. Their month dividend increased from $.2195/share to $.22/share. Will this move the needle significantly for most investors? Not likely. But in aggregate, each small dividend increase by O begins to add up. As I said before, I’ll never complain about a dividend increase, regardless of the size!
Bonus Company #1: Starbucks Corp (SBUX) – SBUX was one of the most talked about stocks this month, in my opinion. The company’s earnings release caused the stock price to tumble, which presented a buying opportunity for a lot of dividend growth investors. The earnings release may have had some negative new in it; however, the release also announced a 20% increase in the company’s quarterly dividend and an increased share buyback program. From a DGI perspective, this was excellent news and it definitely increased my dividend income going forward.
Bonus Company #2: Medtronic PLC (MDT) – This Dividend Aristocrat increased their dividend by 8% in June. This amount has been pretty consistent with the dividend increases over the last few years. I don’t own MDT, but I’m pumped up for those in the DGI community that do.
Expected Dividend Increases in July
That was a lot of dividend increase folks. Investors continue to enjoy the benefits better than expected dividend increases. As we see in each blogger’s monthly dividend income summary article, the results of these increases are real and are starting to produce amazing results. With June behind us, lets see which companies are expected to announce dividend increases in July!
Company #1: Stanley Black & Decker (SWK) – SWK’s stock price is down nearly 20% in 2018 at the time I am writing this article. While my household primarily uses Ryobi tools, you have to love the fact that SWK is a Dividend Aristocrat. Their 5-year average dividend growth rate of 5.18% is low for a low yielding dividend stock. So I’m excited to see if SWK surprises us with a large dividend increase post-tax reform.
Company #2: Walgreens Boots Alliance (WBA) – Despite the fact that I own shares in their competitor, CVS, I’m excited to see if WBA can provide investors with a solid dividend increase. Last year, WBA increased their quarterly dividend 6.67%. Can they exceed this mark in 2018?
Company #3: J.M. Smuckers (SJM) – It is so great, it has to be Smuckers’, right? I’m kicking myself for missing a buying opportunity when SJM’s stock price dipped below $100/share. For the first time in a while, their dividend yield exceeded 3%. Well, I’m expecting the yield to rise above 3% once again once SJM increases their dividend in the coming month. SJM’s 5-year average dividend growth rate is 8.5%, so the increase should be pretty solid. At least that’s what I am expecting!
This month should be quieter than the recent months, as there have been A LOT of companies that have increased their dividend in the first half of 2018. This has just been a remarkable year so far. It has been a while since I have seen this many strong dividend increases from organizations. Hopefully, this trend will continue in the second half of 2018 and we can continue to see our forward dividend income totals climb. July will be interesting, so let’s see if these three companies can provide me with a nice birthday present.
Do you own SWK, WBA, or SJM? What about the companies that announced an increase in June? Did you receive any dividend increases that I did not include in the summary? Are there any companies that you are expecting to receive a dividend increase in July not listed above?