Dividend Income – April 2019

Dividend growth investing is one of the best instruments to build wealth over time. Thereby the time aspect is of significant importance. DGI is not about finding the next Google or Amazon. It’s more about picking boring companies, staying invested and watch the power of compound interest do its magic. Let’s take Johnson & Johnson (JNJ) as an example. In April JNJ has announced a dividend increase of 5.6%. The dividend yield is at 2.68%. This might sound not much, but when we consider the time aspect, the whole picture changes. If you would have bought JNJ in March 2000 (at around 35$/share), it would equal a yield on cost of 10.8% today. Not bad, isn’t it? But it’s getting even better. Think about all the dividends that JNJ has paid from 2000 until today. When reinvested back, those dividends would have a massive impact on total performance. That is the beauty of the compounding effect: money on money earned leads to exponential growth. And last but not least, don’t forget about capital appreciation. JNJ would be up more than 300% in your portfolio.

Dividend Income: April 2019

In April 2019, 5 companies have rewarded me with a dividend payment:

  • Coca-Cola (KO): €8.15
  • Illinois Tool Works (ITW): €9.77
  • Philip Morris (PM): €17.07
  • JPMorgan Chase (JPM): €10.89
  • Altria (MO): €38,71

This month’s dividends sum up to €84.59 ($94.75) in total. That result is almost exactly in line with April’s dividend income from the previous year.

Month2019
2018
+/-
Total€ 438.83€ 1,163.80
January€ 97.98€ 25.26+ 288%
February€ 89.69€ 55.35+ 62%
March€ 166.57€ 107.33+ 55%
April€ 84.59€ 84.92+/- 0%
May€ 177.26
June€ 103.13
July€ 50.96
August€ 190.84
September€ 125.87
October€ 54.34
November€ 71.56
December€ 116.98

The zero growth in April is due to a payment shift by Daimler AG (DAI). Last year Daimler paid out the dividends in April. This year the payout is scheduled for May. So the flat performance in April will be compensated by some surplus income in the coming month.

(Dividend Income: 2019 VS 2018)
(Accumulated Dividend Income: 2019 VS 2018)

Monthly cash flow might fluctuate due to a shifted payment schedule or portfolio changes, as long as this income is growing year over year, I’m more than fine with that. On a cumulative basis, this portfolio still shows some respectable growth figures. This year I have collected €438.83 ($491.50) in dividends so far. Compared to the same period last year, this is a year over year growth of 61%.

(Accumulated Dividend Income 2019: Received VS Projected)

The blue line shows the projected dividend income for this year. Based on today’s data, I expect to receive €1,443 ($1,616) in annual dividends in 2019. As the year goes by, I hope to boost that number towards €1,650 ($1,890) which is my annual target for 2019.

Summary

Although April’s income was rather flat, I’m more than satisfied with the year to date performance of this portfolio. The cash flow keeps on growing and that is what matters the most. For the remaining of the year, I will continue doing what I’ve done since I started investing back in 2015. That is adding small amounts on a regular basis and thus growing this portfolio.

6 Comments

  1. Div.Income May 5, 2019 at 7:11 pm

    Hi,

    nice income for April. I especially like that you ITW in Portfolio, is also on my watch list. But at the moment a bit too expensive.

    Keep up the goo work!

    Reply
    1. Snugfortune May 6, 2019 at 4:11 pm

      I like ITW as well.
      Chances are good that we will see lower prices, if Mr. Trump keeps fueling the trade conflict:)

      Reply
  2. Engineering Dividends May 11, 2019 at 3:30 am

    With your DAI dividend moving to May, next month is shaping up to set a monthly record, SF.
    As for this month, it still delivered an increase, and the tobacco twins did a good chunk of the work.
    Your projections for the rest of the year look great. Keep doing what you are doing.
    I was intrigued by your intro regarding JNJ. I’ve owned JNJ prior to 2000, but don’t have such an impressive Yield on Cost, but that’s due to all my reinvested dividends which have bumped up my cost basis.

    Reply
    1. Snugfortune May 12, 2019 at 10:46 pm

      Thanks, ED!
      I used the JNJ example to show the power of the compound interest. Sometimes people think a yield of 2.6% is too low. But when you have time on your side, the rel. low yield will convert into something bigger.That was the reason I used the YOC in that example. In general, I like to see a high YOC. But what I like even more is the total amount of dividends I receive from my investment. In your case you have reinvested the dividends and thus increased your cost basis over time. That lead to a lower YOC than the one that I have stated in the example.
      But DRIP allowed you to build your JNJ position up in size and thus receive more dividends from a high-quality business.
      I value that much more than sitting on a small position with a high YOC.

      Reply
  3. agr May 12, 2019 at 2:46 pm

    is there any particular reason you only point out the market value of your portfolio and do not show the cost basis/purchasing price?
    This values & YOC would be very interesting for your readers -> transparency

    Reply
    1. Snugfortune May 12, 2019 at 11:17 pm

      Hey AGR,
      no, there is no particular reason for that. I want to keep the overview simple.
      While it can be interesting to track YOC and other figures, what matters to me the most is a) how big a certain position is and b) how much dividend cash flow it produces.
      Market Value and Income provide me with that information.
      Of course, I like to see my positions being in the green and having a high YOC. But again I care much more about how much dividend cash flow my assets are generating.
      A quick example: UNP is up +72% in my portfolio. It has a YOC of 3.4% (while the current dividend yield is at 2%). But UNP “only” generates €37 of annual income.
      If I could go back in time, I would have built my UNP position up in size. Even though that would result in a lower YOC and a lower capital gain percentage as I would average up. I’d much rather own more of a business that is doing well than owning less of it and having good YOC and capital gain percentage figures.
      If more people wish to see figures like YOC or cost basis, I will include them. No problem at all.

      Reply

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