My Own Portfolio : Dividend Income Report Out June 2017

Goodmorning, good evening, good day everyone. Today I am writing this blog post while I am still in New York city. For a business conference and meetings I travel 10 days to New York city. The city that never sleeps… I personally love New York city as there is a specific lifetstyle vibe within this city. But I would never want to live in NY though because life is SO EXPENSIVE. I wrote also a blog post about My Options Investing Learning track in the weekend to reflect on my progress about options investing.

In June we saw some strong market reactions in the technology sector. Technology shares got beaten up very badly within a week. The popular FAANG stocks (Facebook, Apple, Amazon, Netflix, Google) lost $126 billion in market capital while bank shares gained strongly. Netflix for example went from $165 to 150$ while Bank of America went from $22 to $24. This mechanism is called market rotation. Sector rotation is part of a bull market. In our latest Kids’ portfolio, we started with reviewing sectors and how to invest in a specific market sector. Read here our Sector Watch.

Dividend investors do not care so much about market rotation as you can find dividend paying stocks in each sector. The dividend yield is higher than what a savings account can return. Companies generate still good cash flows and the trend of dividend within growth companies is still upwards. We love dividend payouts as it is a consistent income stream.

Below you can find the Dividend yield per sector. Here we can see that Telecommunications, Utilities and Energy sector has been paying very well. Personally we think Real Investment Trusts (REIT) and High Yield trackers or closed end funds are missing on this graph. When you look at dividend yield, it is also important to look at the sector performance. That’s why the sector watch is important. If you read our latest sector watch report, you will have seen that the energy market got beaten up very badly while the financial sector and consumer goods sector is doing better and better.

According to Standard & Poor’s the dividend is responsible for 44% of the total return on investment when you invest in the stock market. So who ignores the dividend yield, leaves almost 50% on the table. When you look at the Dividend Payout ratio over the last years, we can only conclude the numbers look astonishing. The 500 companies in the S&P 500 paid the last year $400 billion dividend. That is twice as much as in the year 2010 after the financial crisis in 2009.

On average companies paid out 42% of their profit which is a healthy payout ratio. US and Canadian companies love to pay out a constant dividend but they also love to pay an increasing dividend year after year. Between march 2016 and march 2017 at least 2600 companies raided their dividend payout. This is different in Europe where companies rather keep their money within the company and taxes on dividend are high. In Belgium the government will steal 30% away from your dividend payout.

Belgian people do not care so much about dividends…they rather put money on a savings account where they lose money. In June a new survey of 2000 working Flemish speaking Belgians learned us the following facts :

• 68% of Flemish speaking Belgians can save money at the end of the month. 33% doesn’t or can not.
• 17% can save more than 500 Euro. 16% between 251 and 500. 18% between 10 and 200 Euro
• 35% of the women compared to 30% of the men can not save money
• Blue collar working people can save on average 372 euro while while collar workers can save on average 630 euro of the family income.

Interesting numbers again…well… let us dream and target 500$ as a monthly income going forward from our dividend paying stocks. Even if the government would steal 30% of our payout, we still would earn more than 50%, isn’t it? I guess if we do the math, that it will give us a better return on investment than a savings account.

So let’s go towards our Market Analysis.

Market Analysis

When we analyse the performance of the SPY (screenshot 1 June) we can conclude that we are now in a consolidation phase.  The SPY ETF did retest the 241.50 level at the trend channel. Will a sell off or market correction occur in the summer time or will the market first go side ways between 240 and 245 before heading higher….Can you tell me please?

 

Let’s dive in the numbers of the June 2017 Dividend Income Report.

Dividends received in June 2017

In the month of June 2017 we received a total of 435,02$. Another solid month above 300$, our 2017 yearly objective.

 

Now let’s analyze the breakout.

We received 377,11 Euro from our monthly paying stocks and ETF’s. We received one payment of 46,18 from a preferred stock that was recalled. During the past years we owned the preferred stock of CLNY which paid us a nice quarterly dividend. We purchased it below 25$. The company decided to recall these stocks and paid me back 25$ a share. A nice surprise which I didn’t see coming…

We also received a small special dividend from one of our stocks for the amount of 11,73$. Little ones add up so I am not complaining…

See our detail overview of all our dividend payouts.

Portfolio Analysis and Growth

So the two new monthly paying stocks purchased in May 2017 immediately contributed 97,56$ to my monthly payouts. They do not fully replace the 141$ per month that I received from PSEC but we don’t want to rush into other positions. We do our homework first !

Compared to June 2016 we have a solid growth and basically doubled our monthly payout.  Of course 57$ is coming this month from special payouts we did not expect. They will not occur in the future. Actually June 2017 will not be our weakest month compared to June 2016. We are happy about that !

We have also been following the EURO/USD valuation.  The EURO rallied to 1,14. We did not convert a piece of our EURO cash position in Dollars. We keep on following this chart closely. We don’t worry about this as we are an investor for the long term.

Going forward

How are we doing on our journey towards our 2017 Objective?

We did a SMART objective of 6600$ for 2017 and we have now achieved 79% of this yearly objective. This is a total of 5233,42 dollar. Let’s see if we can break our last year 2016 dividend income number. Last year we received 5779.44$ when we convert the 359,58 Euro dividend into dollars. We need at least 546.02$ dividend income in July. 

Our focus for July 2017 is to grow our monthly dividend income. Can we bump it to an even higher level ? 

Knowing that we increased our monthly dividend income and that our quarterly dividend paying ETFs pay me in July, it should not be any problem to beat our last year yearly dividend income. It will be interesting to see whether I can make a new record month or not ! We are still sitting on an 11% cash position thanks to the sell of our Spanish bank BKIA position. They announced a merger. I am glad we are out of that position. We will see if we take a new small position in BKIA if the upward trend picks up again…

What do you think about our monthly performance ? How was your passive income growth ?  Don’t hesitate to leave your comments and feedback. Let us know what you think.

Good luck with your personal finance strategy! As usual we end with a quote. Our monthly dividend income is like taking the stairs to our ultimate goal we want to achieve…Success will be reaching 3.000$ EACH month one day ! That will be freedom (like the statue of Liberty in New York city)