Dividend Income Report 2019

Happy New Year everyone! I hope you all have had a fantastic start into 2020. As the new year has just begun, it’s a good tradition to make a summary of the past year. In terms of stock price performance, I have done this in my recent post at the end of December. Today’s report is about dividends. I’m going to present December’s income and then review the dividend performance for the whole year. Let’s start by checking the monthly dividend result for December 2019.

Monthly dividend review: December 2019

In December, seventeen companies have rewarded me with a dividend payment:

  • Enbridge (ENB): €14.56
  • Visa (V): €2.02
  • Unilever (UL): €12.39
  • Amgen (AMGN): €7.76
  • Johnson & Johnson (JNJ): €21.01
  • 3M (MMM): €6.72
  • Coca-Cola (KO): €11.73
  • NextEra Energy (NEE): €4.16
  • Duke Energy (DUK): €10.08
  • UnitedHealth Group (UNH): €4.31
  • Royal Dutch Shell (RDS): €12.35
  • Home Depot (HD): €11.81
  • Dominion Energy (D): €14.11
  • BlackRock (BLK): €8.85
  • Broadcom (AVGO): €17.20
  • Union Pacific Corp (UNP): €7.73
  • Becton Dickinson (BDX): €3.14

December’s dividend income total came in at €169.93 ($190.32). That is a stunning 45% increase compared to December 2018 (€116.98). With NextEra Energy (NEE) and Duke Energy (DUK), I welcome two fresh income contributors this month. All in all, December ended up to be my third strongest month when it comes to dividend payments. Now it’s about time to have a look at the full-year performance.

Annual dividend review: 2019

With December in the books the final picture for the year 2019 looks as follows:

Month2019
2018
+/-
Total€ 1,632.93€ 1,163.80+ 40%
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€ 326.18€ 177.26+ 84%
June€ 160.66€ 103.13+ 56%
July€ 78.05€ 50.96+ 53%
August€ 119.56€ 190.84- 37%
September€ 185.06€ 125.87+ 47%
October€ 46.78€ 54.34- 14%
November€ 107.88€ 71.56+ 51%
December€ 169.93€ 116.98+ 45%

In 2019, this portfolio has generated an annual net dividend income of €1,632.93 ($1,828.90). This equals a 40% increase compared to the previous year. My goal for 2019 has been to collect at least €1,588 ($1,779) in dividends. In the end, I feel very happy having surpassed this number. However, it wasn’t a walk in the park. The challenge has been to replace the income of Altria (MO) and Omega Healthcare (OHI) – two of the high yielding stocks that I have sold last year. Especially MO’s income wasn’t that easy to compensate, as it has represented my second-largest position at that time.

In the rearview mirror, May 2019 has been a clear winner in terms of dividend income. Here I have booked a total of €326.18($365.35) in dividends. By far the largest monthly figure in the past year. The reason for this can be found in the payout policy of my German holdings. Unlike the majority of American businesses, German companies tend to distribute their dividend payments just one time per year. With Daimler (DDAIF) and Allianz SE (ALIZF), both of my German investments have paid dividends in May. As a result, this month has earned the cash flow crown of the year 2019.

Moreover, Allianz SE (ALIFZ) has also taken the lead in another important statistic: the highest dividend contribution by a single company. In total, I have received €135 ($151) from this global insurance group. Consequently, ALIZF’s income is representing 8.3% of the total cash flow for the year 2019. The second place in that statistic goes to AT&T (T). In this respect, the telecommunication giant earned a cash flow share of 7.3%. Due to income diversification reasons, I don’t want a single company to exceed 10% of the total dividends for the year. Thus, I have no intention to enlarge neither my T nor my ALIZF stake anytime soon. The focus will be on building out the portfolio by investing in new companies.

Long-term dividend picture

In the long run, I plan to own about 50 dividend growth stocks. Maybe it’s going to be five more or five less. It doesn’t really matter. What matters is to keep executing the game plan. And the game plan is to invest small amounts into high-quality stocks regularly, collect the dividends and reinvest it back to own more high-quality stocks. Isn’t it a quite simple idea? As soon as you understand how compounding works, it becomes crystal clear. Probably the best way to explain compounding is to visualize it.

Let’s use my real-life portfolio as an example. Compounding is basically money on money earned. The fun is that it becomes extremely powerful the longer you stay in the buy-collect-reinvest cycle. However, in the beginning, there is only a little fun. Everyone starts small. In my individual case, I have started with about €235 in annual dividends. See the small step in the beginning? Now have a look at the step in 2019. This one has become significantly bigger as the annual income has surpassed €1,630. The further you go into the future, the larger the steps will be. This is because more money is working for you and this additional money is building more wealth at the same time. How great is that?

So far I have climbed five steps on the stairway to FIRE. Many more are left to go. On this journey towards my final goal, the above graph serves as a huge motivation. Of course, it’s based on assumptions that might change over time. I agree. However, it transfers a very crucial message in my mind: start investing in income-producing assets as early as you can. Thanks to the compounding effect, you will be rewarded richly one day.

Dividend increases in December 2019

In case you want to start making use of the compounding effect, I invite you to consider dividend growth investing. One major benefit of this approach is that you buy assets that pay you more income year after year. Organically! Here are some examples of organic dividend growth that I have registered in December 2019:

  • Enbridge (ENB) is raising its annual dividend by 9.8% from CAD 0.738/share quarterly to CAD 0.81/share quarterly. A huge increase, especially when considering the high dividend yield of 6.2%. Needless to say that I was more than happy to hear about this announcement.
  • Amgen (AMGN) is raising its annual dividend by 10.3% from $1.45/share quarterly to $1.60/share quarterly. Well, I welcome any double-digit dividend raise with arms wide open. And this increase by Amgen isn’t an exception in this regard.
  • Broadcom (AVGO) is raising its annual dividend by 22.3% from $2.65/share quarterly to $3.25/share quarterly. I simply have no words to describe the strong dividend performance by this company. Just take a look at AVGO’s dividend growth rates from the recent past: 3-yr. DGR: 68.9%; 5-yr. DGR: 55.1%. Last year alone, AVGO increased its dividend payment by 51%. As I said: no words.
  • AT&T (T) is raising its annual dividend by 2% from $0.51/share quarterly to $0.52/share quarterly. Just like a clockwork. If you buy the big T, you know exactly what you will get. This high-yielding stock is raising its dividend by small percentages for decades.
  • Dominion Energy (D) is raising its annual dividend by 2.4% from $0.918/share quarterly to $0.940/share quarterly. This one was a bit disappointing, as we’ve been spoiled with higher dividend growth in the past. D’s 3-yr. DGR and 5-yr. DGR has been in the 8% range historically. Nonetheless, a small increase is better than a freeze or a cut. That’s how I see it!

Summary

2019 is history. Without question, it’s been a successful year in financial terms. This portfolio has witnessed significant growth, both for total return as well as for dividend income. Thus, it’s a good time to be grateful for 2019. Furthermore, it has also become a good tradition to set some New Year’s resolutions when an old year ends and a new one begins. Frankly speaking, I’m not the biggest fan of this practice. Nonetheless, I would like to formulate one resolution for the new year. It ain’t new. It’s something that I follow since the inception of this portfolio. Here it is: my resolution is to keep buying income-producing assets. All the best to you all in 2020.

9 Comments

  1. crash January 3, 2020 at 11:54 am

    From Unilever you get dividends in euros?

    Reply
    1. Snugfortune January 3, 2020 at 4:17 pm

      Hi Crash,
      Dividends from Unilever PLC (GB00B10RZP78) are paid in GBP.
      For the last quarter UL has distributed GBP 0.3576/share.
      PS: Hopefully your username isn’t a bad omen for the equity markets in 2020 🙂
      Cheers

      Reply
  2. Engineering Dividends January 7, 2020 at 10:40 pm

    You finished out the year on a strong note, SF. It was an outstanding dividend total and superb growth.
    Your list of December dividend payers is rock solid. You’ve built quite the dividend machine, and it’s only slated to grow in 2020. I suspect it will be another large step up the staircase in 12 months.
    Congrats on those dividend raises, too. Especially the ENB one given its dividend weighting in your portfolio. I love the AVGO one as well, even though I couldn’t share that one.
    Your note about replacing the lost income of sold portfolio stocks with high yields resonated with me. My REIT trimming during the past year put me in that scenario. Thankfully, it was only trims instead of complete sales, as the income replacement task would have been even tougher with complete sales. You seem to have navigated the situation well .
    Best of luck in 2020… I’ll be following along.

    Reply
    1. Snugfortune January 10, 2020 at 1:48 pm

      I appreciate your comment, ED!
      Indeed, I’m really satisfied with my dividend growth in 2019. Increasing the cash flow is what I focus on the most.
      Selling some high-yielding stocks has put this goal at risk. However I was able to compensate it due to new investments and organic dividend growth. Going forward I don’t try to chase yield. I have 15 years of investing in front of me, so I look also on some stocks with low yield and high dividend growth. Anyway some of the best businesses in the world carry a low dividend yield. I’m thinking about adding to such companies this year. Happy investing to you and thanks for the visit.

      Reply
  3. Dividend Diplomats January 9, 2020 at 4:54 am

    I second what ED said. That’s one strong finish to 2019. Congrats on the great job and focus during the year. Your portfolio is filled with strong dividend growth stocks and you’ll bear the fruits of your labor soon.

    Bert

    Reply
    1. Snugfortune January 10, 2020 at 1:58 pm

      Hard work and consistency are going to pay off eventually. You and Lanny are delivering the proof that it works.
      2019 has been a good year. Let’s make 2020 even better 🙂
      All the best to you, Bert!

      Reply
  4. Passive Cash January 13, 2020 at 3:47 pm

    Strong finish, love the visuals. Compound Compound Compound!
    On to 2020

    Reply
    1. Snugfortune January 13, 2020 at 7:10 pm

      Merci!
      Let’s call it FUN WITH COMPOUNDING.
      Funny thing: the fun gets bigger the longer we hold onto DGI:)

      Reply
  5. Mr. Robot February 9, 2020 at 8:27 pm

    What’s not to like about your results Snug. Cracking records and goals for 2019 seems like your business! 🙂

    Awesome to see the visualisation, keeps me motivated as well. Let’s go get 2020!

    Reply

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