The fear of the coronavirus still spreads. Unemployment claims still in the millions. No deal is reached on the economic stimulus package, the HEALS Act, but yet the S&P 500 was up 5.5% in July. What a confusing and volatile stock market. However, dividend income continues to fuel the mission to financial freedom.
In July, we set another record for dividend earnings and it shows proof that dividend income is one of the best passive income streams. Time to dive into my July 2020 dividend income results!
Dividend Income is the fruit from the labor of investing your money in the stock market. Further, Dividend Income is my primary vehicle on the road to Financial Freedom, which you can see through my Dividend Portfolio.
How do I research & screen for dividend stocks prior to making a purchase? I use our Dividend Diplomat Stock Screener and trade on Ally’s investment platform (one of our Financial Freedom Products) – commission free.
Related: Dividend Diplomat Stock Screener
Relates: Financial Freedom Products
I also automatically invest and max out, pre-tax, my 401k through work and my Health Savings Account. This allows me to save a TON of money on taxes (aka thousands), which allows me to invest even more. In addition, all dividends I receive are automatically being reinvested back into the company that paid the dividend. This take the emotion out of timing the market.
Growing your dividend income takes time, consistency and allow compound interest (aka dividends) to work it’s magic. I have gone from making $2.70 in a single month in dividend income to well over $3,500+ in a single month. That dividend income record was set in 2019. The power of compounding and dividend reinvestment is a wonderful component to the portfolio. Each and every month, whether big or small, I continue to report the passive income that dividend investing provides me. Why?
*Not pictured is my wife’s dividend income above*
I want to show YOU that dividend investing makes it possible to achieve financial freedom and/or financial independence. We all start somewhere, but consistently investing, compounding (reinvesting) dividends and keeping it simple, allows you to be in a significantly better position than most. Further, if I can grow this portfolio and income stream, YOU can too.
dividend income – July 2020
Now, on to the numbers… In July, we (my wife and I) received a total of $784.27 of dividend income. A record dividend income month for us, to say the least! Despite the pandemic from COVID-19, dividend income continues to grow, due to additional investment and reinvestment. Further, though the dividend cuts hurt very bad, I know we did not take the worst of it. Dividend increases have also helped fuel the income growth. Dividend increases are discussed below and that’s one of the best feelings of being a dividend investor.
Here is the breakdown of dividend income for the month of July, between taxable and retirement (far right column) accounts:
What dividend receipt sticks out like a sore thumb? Occidental Petroleum (OXY) is the dividend stock. A dividend of $0.53. Literally, barely two quarters worth at this time. Remember when they were increasing their dividend, buying Anadarko and trying to become an oil behemoth? How short-lived that was. Instead, not only did they cut their dividend once in the early parts of the global pandemic, but twice. Yes, they cut their dividend TWO different times. I have never experienced such dividend heart-burn in my life!
Speaking of oil, there is a bright spot from Total (TOT) , the french oil and gas company that has been around for almost a 100 years. Their dividend payout continues to churn and stay fairly consistent, if not, continues to actually grow.
We will see how long TOT can keep this up, given BP’s recent cutting their dividend in half over the last week. Oh, dividend cuts!
Even with press releases coming in for the 2nd quarter, the earnings are all over the place. Most are beating expectations, but the actual results are far below last year and it’s hard to wonder how long actual results can stay that low. I’ll be sure to review stocks to buy in a post-pandemic world and our Top 5 Foundation Dividend Stocks, no doubt!
Related: Top 5 Foundation Dividend Stocks and watch our video: Top 5 Foundation Stocks VIDEO
As for our retirement accounts, we received a total of $151.49 or 19%. The other 81% was from the individual taxable portfolio that can be used for everyday expenses. I need to keep bolstering the taxable account, as that passive income stream can be accessed today/right now. However, I continue and will always maximize the 401k and IRA, as that continues to pay-off in dividends, literally.
Dividend Income Year over Year Comparison
Dividend income, year over year is higher by $125.85 (including my wife’s dividend income of $87.24 last year with mine). This is a 19.1% growth rate from prior year. This time next year, we will be pushing over $1,000. We can do this, no doubt!
There were great spots. As I indicated, Total (TOT) had a nice increase year, after year. This is all on their own, no acquisition of new shares. Canadian Imperial (CM) also grew, primarily due to the trifecta of dividend growth, acquisition and dividend reinvestment. Philip Morris (PM) and Glasko (GSK) grew by dividend reinvestment primarily.
Leggett & Platt (LEG) is also up 76% from prior year. This is due to acquiring many more shares, as well as dividend growth and reinvestment. However, they have now maintained their dividend for two quarters in a row. They were to increase their dividend back in May, but held steady. Then in August, they chose to do the same. Therefore, we will see what LEG decides to do in November. They will still hold onto the coveted dividend aristocrat title, as technically their dividend is larger in 2020 vs. 2019, in total.
Time to beef up positions, increase the # of shares I own and set records again in 2021.
I received 3 dividend increases in June. Glad I can keep the momentum through July with two incredible dividend increases, show cased below:
Scott’s Miracle Gro (SMG) came in swinging. Not only did they increase their dividend almost 9%, but they also announced a special dividend of $5.00 per share! WOW! Talk about impressive. SMG sends a special dividend once every few years, and boy does it taste good during the global pandemic.
Further, Grainger (GWW) came in with another massive dividend announcement surprise. When I was expecting low-to-no dividend increase, they came and swung the big bat with a dividend increase over 6%! Just when it makes me cringe seeing OXY’s dividend hit my account, these dividend increases bless the portfolio.
In total, dividend increases created a total of $13.46 in additional passive dividend income. I would need to invest $385 at a 3.50% dividend yield in order to add that income. Thank you for the increases, as I didn’t have to come up with the capital to create that form of income!
Dividend Income Conclusion & Summary
The name of the game is to apply what you learn through financial education. The next steps are to maximize every dollar for investment opportunities and live life on your own terms. My plan is to demonstrate that dividend income can be a revenue engine. A revenue engine that allows you to take back control of your life. A revenue engine to help you reach financial freedom. Dividend investing, once you learn the right way, becomes easier and starts to immensely make sense!
Excited for the future, no doubt. Further, all of the investing from last year and moves this year, shows that my aim to save 60% of my income, and making every dollar count, has provided the dividend growth.
If you are just starting out on your investment journey and you aren’t sure to start – please see the articles mentioned throughout this post. We are trying to bring you financial education and help you reach your financial goals.
Further, if you are starting out and/or want to know the Top 5 Stocks we always recommend, please see our YouTube video, subscribe to our channel and check us out! We’ll help break down further investing topics not only on this blog, but by showing you through video!
As always, thank you for stopping by, leave your comments and questions below. Good luck and happy investing everyone!
The post Dividend Income Summary: Lanny’s July 2020 Summary appeared first on Dividend Diplomats.