Another month is in the books. 2021 continues to fly by! I cannot wait for winter to end and the warm weather to arrive. I’m tired of the snow! Each month, we summarize the dividend income we receive. It helps hold us accountable. Further, we love sharing our progress with the community, since we draw so much inspiration from ALL OF YOU. It is time to jump in and review my Fenruary dividend income summary!

Why I Invest in Dividend Stocks

I invest in dividend stocks to grow a my passive income. One day, my dividend income will be large enough to cover my monthly expenses. That is why we are relentlessly searching for undervalued dividend stocks to buy. To put our hard earned cash to work.

To find dividend stocks to buy, we use  our dividend stock screener. Our stock screener continues to help us find some awesome undervalued dividend stocks to buy. This simple, 3 step stock screener is designed to identify undervalued stocks with a strong payout ratio that have a history of increasing their dividend.

Watch: Dividend Diplomats’ Dividend Stock Screener

Building a large dividend income stream takes time, consistency, hard work, saving, and most importantly, investing. I have been investing in dividend growth stocks since 2012. Slowly, but steadily, my income has grown. Brick by brick. DRIP by DRIP. It is really exciting to see the growth and larger dividend checks trickle into my brokerage account.

Each month, we share our dividend income summaries to highlight our growth and progress. It is  a fun and helpful excercise that holds us accountable. Further, it helps you, our followers, see the stocks we are purchasing.

(adsbygoogle = window.adsbygoogle || []).push({}); Bert’s February Dividend INcome Summary

In February, we received $603.09 in dividend income. This represents ~19% year over year increase compared to last year. 2021 has continued where 2020 left off. Strong dividend results, fueled by additional stock purchases, dividend reinvestment, and dividend increases. The chart below summarizes each individual dividend payment we received in February.

Observation 1: AT&T Steals the Show…once again

It is no secret that AT&T is one of our favorite dividend stocks. The telecom and wireless giant is one of our Top Foundation Dividend Stocks, after all. We have amassed a large position over the years due to the company’s strong dividend metrics and their high dividend yield. In fact, I would argue that most dividend growth investors have a position in this dividend stock.

Read: Top 5 Foundation Dividend Stocks

To say that AT&T has been in the news lately would be an understatement. The company has a lot going on (much to dividend investors chagrin). We have covered the company closely on our YouTube Channel. Why? The company is so important to the community that we want to bring you a dividend investor’s perspective on the company’s major news. Recently, the company finally announced the sale of a minority stake in DirectTV to TPG, bringing in some nice cash to pay down debt. The company will then spin-off DirectTV.  Major news, right? Hopefully that cash will flow back in the form of a dividend increase soon!

Over the last year, we have added to our position in T significantly as the company’s news continues to drop. We added heavily when their share price was between $26 – $28 per share. Now, we are seeing the impact of the heavy investments. Combined, my wife and I received over $182 in dividend income from T. More than enough to EASILY cover our AT&T internet bill. Soon, after DRIP and potentially a dividend increase, we each will receive over $100 per quarter from the telecom giant.

Observation 2: Companies Changing The Monthy They Pay Their Dividend is Infuriating

Nothing is more frustrating than when a company changes the month it pays a dividend. We love the consistency and predictability of dividend paying stocks. For the most part, you can guess the month, and sometimes, week, that a dividend is announced and paid.

Frustratingly, this month, we had 2 companies that did not pay us a dividend like last year. The two companies were Starbucks and Peak Healthcare.

Luckily, this was partially offset by the fact that we received a massive dividend from Canadian Imperial. CM typically pays a dividend in January. However, this month, the dividend payment slid into February.

Unfortunately, the Canadian Imperial dividend was not larger than the dividends received last year from Starbucks and Peak Healthcare. Therefore, dividends being paid in different month had a net negative impact on my monthly dividend.

Observation 3: People’s United Dividend Income is a Short Lived Victory

It was exciting to receive a new dividend from People’s United this year compared to last year. However, this is actually going to be the last dividend I receive from People’s United, the community bank that is a Dividend Aristocrat. I actualy sold my position in March.

Read: Who & What Are Dividend Aristocrats?

Why did I sell? It was announced that People’s United will be sold to M&T Bank, creating a massive, $200b+ bank. We purchase community banks that pay a nice dividend. A massive, nationwide bank does not fit my typicaly investment criteria. Therefore, I sold the position and invested it elsewhere.

It’ll be sad to see the position go. I was excited to own an aristocrat in the banking sector that pays a very healthy dividend yield. Plus, lets be real, the dividend income was great. Oh well. At least I was able to lock in some nice gains and re-allocate the funds to another community bank.

(adsbygoogle = window.adsbygoogle || []).push({}); The Impact of Dividend Increases

We love dividend increases. It is plain and simple. There is no better feeling than seeing your dividend income grow without lifting a finger. Heck, that’s part of the reason why we think dividend investing is the best, and easiest, form of dividend income.

Dividend increases have been crazy since the fourth quarter. After too many dividend cuts and suspensions as a result of the pandemic, companies began increasing their dividends once again towards the end of the year.  We have covered this trend like a hawk on our blog and YouTube Channel (where we produce a weekly video summarizing the major dividend increases).

February continued where the previous months left off.  There were an insane amount of dividend increases. Further, some of the dividend increases we received were crazy. The largest increase, both by percent and dollar impact, was from T.Rowe Price. The Dividend Aristocrat increased its dividend by 20%. That added over $50 of forward dividend income. Talk about sweet, right?!

There were a couple of disappointing dividend increases in February, however. Two companies announced pathetic dividend increases. The most shocking was UPS. UPS crushed it in 2020 and their business soared as a result of the boom in e-commerce during the pandemic. Since the company’s stock price took off, I surely expected the company’s dividend to increase as well. Unfortunately, the company increased its dividend 1%. It was very, very frustrating, as this added less than $2 to my forward dividend income.

3M delivered the other disappointing dividend increase. The Dividend King’s average dividend growth rate has been trending south the last few years.  Their five-year average dividend growth rate was still over inflation. This year, though, their dividend icnrease was AWFUL. At .68%, that dividend increase is barely above my high-yield savings account rate. Terrible! Not what you want to see from a dividend king.  Especitally since I also received less than $2 from one of my favorite investments.

Read: Bert’s 5 Stocks to by Now, Always, and Forever

The chart below shows each, individual dividend increase received.

As you can see, TROW and AFL had the largest impact.  In total, I received over $105 in additional dividend income from dividend increases alone. Assuming a 3% yield, that is the equivalent of investing $3,500 in the stock market! Dividend investing is the best!

Summary

How could I not be excited with a month like this? We crossed $600 in dividend income for an “off month.” That was a 19% increase compared to last year. But the fun didn’t stop there. Our income increased over $100 without doing anything.

Folks, the power of dividned investing is real. Lanny and I are proof that saving, and investing, every dollar possible pays dividends today, tomorrow, and well into retirement. We are one month closer to financial freedom. That’s the name of the game. It is time to push even harder, save even more, and invest every possible dollar in income producing assets!

How did you perform in February? What was the largest dividend you received? Did you also receive a dividend increase from TROW or AFL?

Bert

The post Dividend Income Summary: Bert’s February 2021 Summary appeared first on Dividend Diplomats.