Dividend Income – March 2020

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This past month (March 2020) was one of the worst that I can remember from my lifetime when it comes to bad news. The Coronavirus is now considered a pandemic and has brought the world economy to it’s knees.

I’ve focused a lot of my recent writing on how the Coronavirus pandemic has impacted our personal finances including our investments. Instead of listening to all the doom and gloom, I’ve tried to remain calm in these uncertain times … especially when it comes to personal finance.

One bright spot (at least for the time being) last month was our dividend income stream. My wife and I have been investing (and tracking) the amount of monthly dividend income we earn … ever since 2008.

Not a coincidence … but that was around the time of the last recession. Adopting a dividend income investment strategy back then has been successful for my wife and I. We have “stayed the course” since that time … and have plans to continue through this likely recession.

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.

Today is our third monthly report of 2020 … and despite the overall poor economy … it was another great month for dividend income.

Below I will explain the dividend income we earned last month (March) and any updates to our portfolio.

March 2020 Dividend Income – $498.24

Here is a breakdown of how we earned almost $500 last month in dividends.

March 2020 Dividend Breakdown by Company

In total we had 21 stocks and 5 different ETF’s pay out a dividend in March.

Awesome dividend paying companies like Johnson & Johnson, Consolidated Edison, and Mcdonald’s earned our family extra income … 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 March 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 Fidelity and M1 accounts that will be reported as income earned in 2020.

  • Archer Daniels Midland (ADM) – $25.20
  • AFLAC Inc. (AFL) – $34.72
  • Consolidated Edison, Inc. (ED) – $31.41
  • Emerson Electric Co. (EMR) – $25.00
  • WW Grainger Inc. (GWW) – $0.72
  • Intel (INTC) – $16.88
  • Johnson & Johnson (JNJ) – $52.32
  • Mcdonald’s Corp (MCD) – $50.67
  • Lockheed Martin Corp (LMT) – $74.26
  • 3M Co (MMM) – $1.38
  • Microsoft Corp. (MSFT) – $44.11
  • Norfolk Southern Corp. (NSC) – $26.15
  • Realty Income Corp (O) – $21.39
  • PepsiCo Inc (PEP) – $1.13
  • QUALCOMM Inc. (QCOM) – $8.06
  • Target Corp. (TGT) – $40.62
  • T. Rowe Price Group (TROW) – $1.17
  • UNILEVER (UL) – $9.17
  • United Technologies Corp. (UTX) – $0.80
  • Walgreens Boots Alliance (WBA) – $1.23
  • Exxon Mobil Corp. (XOM) – $2.01
  • iShares S&P Pref Stock Index (PFF) – $0.04
  • iShares US REIT ETF (USRT) – $15.65
  • Vanguard Total Corp Bond ETF (VTC) – $3.14
  • Vanguard Total Stock Market (VTI) – $4.91
  • Vanguard High Dividend Yield (VYM) – $6.10

March 2020 Taxable Dividend Income = $498.24

Just for a bit of context … back in February we announced that I closed my Robinhood account and transferred our shares to Fidelity. The Robinhood app no longer met our investment needs so from now on, we have only our Fidelity and M1 taxable accounts.

So how did our recent March dividend income results compare to past years? Let’s take a look at our historical results for March next.

Historical March Dividend Income

Looking back at past results, March has traditionally been one of our top dividend income months … along with June, September, and December. This is based on the quarterly dividend payout cycle of most of the stocks in our portfolio.

This past month was no exception to that rule as we saw our biggest dividend income month for March to date.

A historical look over the past 9 years shows the upward growth of our dividend income earned during the third month of the year.

March Income (2012 – 2020)

As you can see, our dividend income just in the month of March has really compounded since we first started tracking our results. That is what makes investing in compounding dividend stocks so much fun!

Hopefully we can continue to grow and compound our dividend income stream through this latest economic downturn.

Just in the past year, we were able to grow our March monthly dividend income by 5.70%!

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.

At the same time … we are in for many rough months coming up and I would expect a few dividend cuts.

Next let’s 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 months that I can remember in the market (due to the Coronavirus pandemic) … there were a few dividend increases announced.

Based our 12-month forward dividend calculation, we would earn approximately $3,728.80 (up from $3,696.19 at the end of February) in income over the next year from our portfolio.

That is a 0.88% 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. Given the latest circumstances, we are anticipating a few dividend cuts over the next 12 months.

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.

  • General Dynamics Corp. (GD) – 7.8%
  • QUALCOMM Inc. (QCOM) – 4.8%
  • Realty Income Corp (O) – 0.22%

These annual increases play a big role in allowing our dividend income stream to grow on it’s own overtime.

March 2020 Dividend Summary

In March, we earned $498.24 of dividend income from our taxable brokerage accounts.

This was our largest March dividend income month ever!

An extra $498.24 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 ~$500 to cover some of our monthly expenses. That would have covered my car payment plus a lot of our utility bills. Or it would have covered approximately half of our monthly mortgage payment. Hopefully one day it will be enough to cover 100% of our mortgage!

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 ~$500 per month every March. 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 entire year. And if we could possibly invest enough new dollars to push that figure up to $4,000 that would be even better. However … given current market conditions that will be unlikely.

As far as 2020 … we earned $185.56 in January, another $216.99 in February, and $498.24 in March for a total of $900.79.

In order to hit our goal of $3,850 in dividends in 2020, we will need to earn an additional $2,949.21 over the remaining 9 months of the year.

Finally … we managed to raise our annual forward dividend income in March to $3,728.80. 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 March? 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’s noted in this post – ADM, AFL, ED, EMR, GD, GWW, INTC, JNJ, MCD, LMT, MMM, MSFT, NSC, O, PEP, QCOM, TGT, TROW, UL, UTX, WBA, XOM, PFF, USRT, VTC, VTI, and VYM. The material above is not a recommendation to buy. Please do your own research on a company before deciding to invest.

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