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At the end of every month … I try and publish the results of our dividend income portfolio. More specifically … I post the dividend income (by stock) that we earned for the prior month.
My wife and I have been investing (and tracking) the amount of monthly dividend income we earn … ever since 2008.
In 2008 my wife and I started our investment journey with blue chip dividend stocks.
Each month since then we have been investing new money into this portfolio and then watching our monthly and yearly dividend income grow.
The awesome thing is that our dividend income still grew through the great recession. And it more than likely will continue to grow (although probably at a lesser rate) through this latest stock market and economic downturn.
Because of this stability … we have made our dividend income portfolio one of our main long term investment strategies. And one day … the goal is to use this recurring and growing income stream to cover a portion of our expenses.
Will we be able to cover 100% of our expenses with dividend income?
However, based on some back of the envelope calculations, we’d expect to earn around $10,000 per year about the time I plan to retire from my job.
That $10,000 won’t cover everything in our retirement years, but it certainly can go a long way if combined with a pension and healthy retirement portfolio of investments.
Today is our second monthly report of 2020 … and it is another good one … despite the overall market decline recently.
Below I will explain the dividend income we earned last month (February) and any updates to our portfolio.
February 2020 Dividend Income – $216.99
Here is a breakdown of how we earned over $215 last month in dividends.
February 2020 Dividend Breakdown by Company
In total we had 13 stocks and a Bond ETF pay out a dividend in February.
Awesome dividend paying companies like Caterpillar, Hormel Foods, and Procter & Gamble paid our family a bit of money … just for owning a few shares in their company.
The cool thing is that little bit of money we receive in dividends is steadily growing each and every month.
Here is the breakdown of dividend income (by stock) in February from our taxable accounts.
Note – We recently stopped reporting on our dividend income earned from retirement or “tax deferred” accounts. That income is not readily accessible since my wife and I are years away from needing it. Since our focus is on replacing taxable income from multiple sources, we won’t include any dividends from retirement accounts in these monthly reports any further.
The following stocks are held in our Robinhood, Fidelity, and M1 accounts that will be reported as income earned in 2020.
- Apple Inc (AAPL) – $10.86
- AbbVie Inc (ABBV) – $2.16
- Caterpillar Inc (CAT) – $20.60
- Clorox Co (CLX) – $39.47
- CVS Health Corp (CVS) – $4.00
- Eaton Vance Corp (EV) – $1.25
- General Dynamics Corp (GD) – $0.90
- Hormel Foods Corp (HRL) – $6.05
- Lowe’s Companies Inc (LOW) – $14.78
- Realty Income Corp (O) – $21.39
- Omega Healthcare Investors Inc (OHI) – $67.00
- Procter & Gamble Co (PG) – $15.20
- AT&T Inc (T) – $9.88
- Vanguard Total Corp Bond ETF (VTC) – $3.45
February 2020 Taxable Dividend Income = $216.99
Just for a bit of context … February will be the last month in which we earn dividend income from our Robinhood investment account. We recently closed our Robinhood account and transferred our shares to Fidelity.
So how did our recent February dividend income results compare to past years? Let’s take a look at our historical results for February next.
Historical February Dividend Income
Looking back at past results, February has traditionally been an average dividend income month. Due to the quarterly payout cycle of most of our stocks paying dividends – March, June, September, and December are always the highest.
But overall … February holds it’s own when it comes to dividend income results.
A historical look over the past 9 years shows the upward growth of our dividend income earned during the second month of the year.
February Income (2012 – 2020)
- February 2020 Taxable Dividend Income – $216.99
- February 2019 Taxable Dividend Income – $207.92
- February 2018 Taxable Dividend Income – $174.65
- February 2017 Taxable Dividend Income – $136.30
- February 2016 Taxable Dividend Income – $104.72
- February 2015 Taxable Dividend Income – $46.16
- February 2014 Taxable Dividend Income – $35.68
- February 2013 Taxable Dividend Income – $36.20
- February 2012 Taxable Dividend Income – $25.26
As you can see, our dividend income just in the month of February has really compounded since we first started tracking our results. That is what makes investing in compounding dividend stocks so much fun!
Just in the past year, we were able to grow our February monthly dividend income by 4.36%!
Normally, we try and have a goal to increase our dividend income by 6% to 9% annually … so we are a bit down. However, most of that can be attributed to not investing as many new dollars into the market as we’d have liked.
Speaking of investing new dollars … check out how we are growing our future dividend income below.
Growing Future Dividend Income
One of the best parts of reporting our dividend income each month is looking at our future dividend income. And with one of the roughest week’s in the market in recent memory (due to Coronavirus concerns) … dividend increases are still being announced.
Based our 12-month forward dividend calculation, we would earn approximately $3,696.19 (up from $3,677.93 at the end of January) in income over the next year from our portfolio.
That is a 0.5% increase of future dividend income compared to just last month.
This calculation doesn’t include any future reimbursement of dividend income back into more stocks. Nor does it include any new investment dollars or dividend increases made by the companies in which we own shares.
The only assumption in earning this income is that we don’t sell any of our stocks in our portfolio. And the companies we own do not cut or lower their dividend payout.
Since buying our first dividend stock back in 2008 … we’ve never had a year that our dividend income decreased. And we don’t expect one anytime soon … even with current market conditions.
Speaking of companies raising dividends, I would like to briefly mention a few wonderful stocks that we own who announced dividend increases last month.
- Coca-Cola Co (KO) – 2.5%
- Genuine Parts Co (GPC) – 3.6%
- Walmart Inc (WMT) – 1.9%
- Cisco Systems Inc (CSCO) – 2.9%
- PepsiCo Inc (PEP) – 7.1%
- T. Rowe Price Group Inc (TROW) – 18.4%
- AFLAC Inc (AFL) – 3.7%
- 3M Co (MMM) – 2.1%
These annual increases play a big role in allowing our dividend income stream to grow on it’s own overtime.
February 2020 Dividend Summary
In February, we earned $216.99 of dividend income from our taxable brokerage accounts.
This was our largest February dividend income month ever!
An extra $216.99 may not seem all that exciting for some people. However, I think it is awesome.
Even though that dividend income will be reinvested into more stocks, we could have used $200+ to cover some of our monthly expenses. That would have covered a good amount of food for the month. Or it would have covered our monthly heating bill (in the middle of winter) … plus a little left over.
I did not have to spend any working hours making that income. And I won’t have to spend any hours working to get the same (plus any growth) income next year.
As always … it is important to point out that we are not just sitting back and earning $215+ per month every February. Instead we are setting new goals to continue actively grow our dividend income.
For example, in 2019 we had a goal to earn $3,500 in dividend income from our taxable accounts. We hit that goal back in December by earning just over that amount.
So now in 2020, we want to get better by earning $3,850 in dividend income over the next 12 months. And if we could possibly invest enough new dollars to push that figure up to $4,000 that would be even better.
That is one advantage to the markets trading a lot lower now.
As far as 2020 … we earned $185.56 in January and another $216.99 in February for a total of $402.55.
In order to hit our goal of $3,850 in dividends in 2020, we will need to earn an additional $3,447.45 over the remaining 10 months of the year.
Finally … we managed to raise our annual forward dividend income in February to $3,696.19. This is basically the dividend income we would expect to earn starting today over the next 12 months … without doing anything.
I look forward to great opportunities for dividend income for the remainder of 2020 … despite what the overall market is doing!
How was your dividend income in February? Are you actively investing and growing your portfolio?
Full Disclosure – At the time of this writing, we owned shares in the following stocks and ETF noted in this post – AAPL, ABBV, AFL, CAT, CLX, CSCO, CVS, EV, GD, GPC, HRL, KO, LOW, MMM, O, OHI, PEP, PG, T, TROW, WMT, and VTC. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.