Dividend Update: May 2015

May’s dividend totals are in the books, and I saw some impressive growth.  I’m building a rising stream of passive income, so I no longer have to stress out about finding my next editing or producing job and I can work solely out of passion.  I recently wrote about my latest high risk/reward opportunity in my portfolio update.  These updates help me track and predict my progress so I can see where I’d stand if I ever needed to use my dividend income for expenses.   This practical use of the cash flowing into my investment accounts is the main reason I love the dividend growth investing strategy.

In May, I received dividend payouts from seven separate businesses totaling $113.64 which I automatically reinvested into more shares for free.  Here’s a snapshot of that activity over the month:

2015_may_divsheet

My automatic dividend reinvestment’s added $4.82 in forward annual income, which is a 4.24% yield on my $113.64 total payout.  I’m now on pace to earn a minimum of $100 a month going forward, but that could change at any point with alternate pay dates or upcoming spin-offs.  May’s total dividends of $113.64 grew 25.20% over last quarter in February, when I earned $90.77.  Going back further, that increase was 65.17% over last year’s $68.80.  Here’s my updated dividend payouts chart:

2015_may_divpayouts

I set out to receive $2,050 in dividends this year, and after five months I’ve earned just $567.69.  With only 27.69% of my goal completed, I have some serious work to do in these next few months.  I’ve been on a roll in June so far, already putting over $5,000 in new contributions to work which I’ll be posting about soon.  It’s going to take a lot more than that to see this goal through, and I plan to keep things rolling:

2015_may_divreceived

May was also the first month in a long time where I had no dividend raise announcements among my holdings.  I spoke last month about Chevron (CVX) and their failure to increase their dividend, and I’m watching closely.  Here’s an update from VP and CFO Pat Yarrington of Chevron:

Let me just start by saying that maintaining a competitive and growing dividend is our number one priority. That has not changed. Our financial priorities have not changed, but what has changed is our immediate financial environment, the near-term environment has changed and so the board chose not to increase the dividend this quarter.

It is similar to what we did back in 2008 and 2009, when prices last fell significantly. We are supporting a 3.8% yield, but clearly, we are not running very strongly on earnings or cash flow at the moment due to commodity prices. I think it’s fair to say that the first quarter was not a very stable financial environment, it was very fluid in terms of both revenues and costs. And so I think our overall decision is going to be based on what we feel is affordable and supportable in perpetuity, because we don’t want to get into a position where we are having to cut the dividend or trim the dividend in anyway.”

I bought my first round of dividend growth stocks two years ago in May 2013, before I even found this awesome blogging community.  The first dividend didn’t hit my account until July of that year, but even with my short history I’ve managed to rake in $1,403.94 in lifetime dividends which has all been reinvested toward the cost basis of my portfolio either selectively or automatically.  Here’s what that looks like so far:

2015_may_LD

I’m working hard to keep the contributions coming, and that’s the name of the game with a portfolio my size.  Every little bit I can add today brings me that much closer to financial freedom.  June is going to be a big month, and so far I’ve been very happy with several deals that the market is offering.

What are you buying?  What are your thoughts on Chevron’s dividend?

My Dividend Growth

http://www.mydividendgrowth.com

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28 thoughts on “Dividend Update: May 2015
  1. Dividend Empire

    Nice month Ryan! Extra annual income for doing nothing – gotta love that. $5K already invested this month is impressive – hopefully it gives you the boost you need to reach your goal. Can’t wait to see what you bought!

    Ken

     
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    1. My Dividend Growth

      I got a real nice jump in forward income from the new purchases, I’m looking forward to updating the portfolio on the site. I might be making one more purchase this month, but it’ll be tight unless there’s a major market sell off. Here’s wishing though. Good to hear from you Ken.

       
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    1. My Dividend Growth

      Thank you much 🙂 With my latest purchases I’m averaging about $174 a month, and hopefully I won’t dip below that $100 minimum. You’re doing a great job over there too!

       
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  2. JC

    Looks like a solid month of dividends and congrats on reaching the $100 monthly minimum. Thats awesome! Looking forward to see where all youve invested that $5k so far this month. That should help to put a dent in your forward dividend income.

    Regarding CVX’s dividend I’m not too concerned about it yet. I’d much rather have management be more conservative if they feel the o&g outlook is still very uncertain. Quarterly dividends remaining unchanged is par for the course from time to time with companies that have huge commodity exposure risk. Theres just no product differentiation or moat on the end product. The advantages they have come from operational efficiency which makes them a very different company from the consumer staples which just arent subject to big changes in demand. I’d much rather the dividend be held at current levels for a few extra quarters rather than them increasing it just to increase it and risk the financial health of the compary and jeopardize the long term dividend growth.

    Keep up the good work.

     
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    1. My Dividend Growth

      Great points there JC. It’s reassuring to know they’ve waited a few extra quarters like this in the past. I’d even give them a few years to raise it again, but it’d no longer be a swan stock. It’s one I’ll be watching extra close theses next few years for sure. It’s good to hear from someone in the industry like yourself, keep us updated if you hear anything new.

      The purchases were all adds to my existing holdings, feel free to check them out on my Twitter and I hope to get a post up soon. Thank you for the support and I’m excited to hear about your next buy as well.

       
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  3. roadmap2retire

    Nice work, Ryan. That chart is headed in the right direction. Congrats on the dividend income.

    As JC said, I am not too concerned about CVX’s position either. I think the management is doing the right thing by discontinuing their share buyback program and delaying the dividend raise. Hopefully the company will get the finances back in order soon and start raising dividends again.

    Best wishes
    R2R

     
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    1. My Dividend Growth

      I think you’re right about that, and it’ll be interesting to watch. I still can’t figure out if I want add to the oil majors here. XOM seems appealing, but it could go much lower or never see these low prices again. It’s a tough balance trying understand how to value a company based on uncertain future commodity prices. I think that’s mainly why I’m still a little nervous. I’m probably missing a major opportunity here.

       
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      1. roadmap2retire

        I face the same dilemma. Looking at some of the macro issues, it appears that energy prices will remain subdued for a while. But then again, we could see rampant inflation in the future which will raise prices for everything. I think it boils down to the risk appetite of each investor. I have energy as the highest exposed sector – so I am holding off unless I see some screaming buys. I am looking at pipelines more than the oil producers for energy exposure as they provide better stability and good income. Would love to buy more KMI as I think its fair to undervalued.

        Happy investing
        R2R

         
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        1. My Dividend Growth

          Great comment there, it always helps me to hear what more experienced investors like yourself are thinking. Thank you for that, and I completely agree with everything you said. I think I’m about where I want to be with energy at 10% of the portfolio, I also have high cyclical exposure in industrials, where I’m a little overweight. I also don’t see any ‘screaming’ buys, I purchased CVX when the price of oil was over a hundred, and now oil is down 50% while my purchase is only down 10%, for some reason I can’t shake that feeling it could fall a little more. If it doesn’t, I don’t think I missed anything I’d regret. KMI is looking good at $38 or lower to me, I’d love to add more.

          Hope all is well, keep posting that awesome content!

           
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  4. FrugalityToFinancialFreedom

    Big congrats Ryan, very impressive growth of 25% vs last quarter and 65% vs last year. Seems like next month will be over $200 mark, I will be tuning on your progress and will be rooting for your success.

    I remember how we discussed about missing the boat on CVX on averaging down when it hit the $100 range, well the time had come again, CVX price range on the $100, except fundamental had changed a bit. Dividends been frozen for a quarter but the year is not over yet. I have a quite large position on CVX, adding some more shares is kind of risky right not. The thing is, if CVX didn’t freeze its dividend I would love to average down, but right at the moment I prefer XOM. XOM sports the lower payout ratio and a stronger balance sheet, plus I have a smaller stake on XOM, so my play will be: if I were to invest on an energy company it would rather be XOM. Any plan on adding energy anytime soon? Whats your take with CVX?

     
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    1. My Dividend Growth

      I do remember that conversation! I think it had just popped back up to $109 a share and we were full of regret. I still can’t shake the big oil price question mark and how long it will effect the fundamentals. Most of the market thinks in the short term and in the past, bad temporary fundamentals brought the price down even further than the change we’ve seen at lately. But I can’t put a limit on it, so I’m still not sure if I should just bite here while I’m down 11% in CVX or start a position in XOM which is a great long term idea. Worst case scenario, I average down a little more and collect more passive income.

       
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  5. TheOptionRider

    I started building a position in CVX this spring. I’m averaged in at $104 which equals a 4.12% yield. It’s not often CVX yields more than 4%. I feel like this is a great opportunity, BUT great opportunities always arise out of a degree of uncertainty. AND of course that uncertainty is oil… and whether or not it will truly rebound. I keep reading and hearing that $60 a barrel will be the “new normal”

    I don’t believe that at all…. to me, this is the noise to simply tune out. I read a great interview w/the CVX CEO and he said this is the 5th, the FIFTH 50% drop he has been a part of in the last 35 years. And every time, EVERY TIME, oil prices rebounded. It’ll happen again, just a matter of time. And when it does happen everyone will be saying why didn’t we buy?!?!?

    Btw, I also started building a position in XOM. I’m in at $85, sporting a 3.43% yield – which is historically high for XOM. These companies are here to stay, and now is the time to BUY

     
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    1. My Dividend Growth

      Congrats on building those positions, they’re excellent long term choices. Maybe you’re right and I should just add more to these oil majors in case it really is the lowest we’ll see. It’s so hard to place a valuation here, and clearly my inexperience is going against me. I wish one more piece of bad news would knock another 5 – 10% off and I’d definitely strike, but I’m not sure I’m a hurry right at this moment. It’s like I have a angel bull and devil bear hovering over my shoulder confusing me every other day, grrrr. Thank you for stopping by!

       
      Reply
  6. Dividend Hustler

    Thanks for Sharing Ryan. Awesome Progress bud. You’re seeing the trend every month with these updates. What you focus on Expands… Keep up the momentum and we’ll be along with you on this journey. Take care my friend and keep hustling hard. cheers.

     
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    1. My Dividend Growth

      That’s such a true statement about focus, DH. I’m very determined, and I owe a lot of that to you and other supporters. I’m looking forward to your next update, you’ve been making tremendous strides man.

       
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  7. Adam @ AdamChudy.com

    Awesome numbers. Keep up the progress.

    I’m a Chevron holder (among several other E&P’s). I’m expecting most of these companies are going to be in a dividend holding pattern for at least the next 6-12 months.

     
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    1. My Dividend Growth

      I’d be okay with a dividend hold and that time frame. I’m thinking a little longer like you on this one and wanting to see if a better opportunity presents itself to average down or initiate in other oil majors. It’s not really an industry I’m dying to get in, so if I miss out on a few percentage here and there I’m okay with it.

      Hope all is well with you, Adam. Thanks for the comment.

       
      Reply
  8. Dividend Mantra

    Ryan,

    Great stuff. Congrats on hitting that minimum of $100/month. I still remember looking at my income and seeing it consistently exceed $100 per month. I really felt like things were moving in the right direction at that point.

    $5k invested thus far in June is just incredible. And I thought I was on a roll! That’ll surely go a long way toward inching you closer to your goal. Keep it up. Can’t wait to see where you went with the capital.

    Best regards.

     
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    1. My Dividend Growth

      I completely relate to that feeling you had at this point, I’m seeing really rewarding results already. It makes my commitment to the plan that much stronger. I still can’t believe I’ve come this far, I’ve grown a lot and have a much better understanding of what I want in my portfolio. It’s pretty awesome that we’re basically managing our own businesses and learning as we go, and I’m absolutely loving it so far. I’m hoping to see at least one more purchase from you in June and I can’t wait to read about it. Thanks for the comment.

       
      Reply
  9. Dividend Gremlin

    Ryan,

    Good month, esp. with breaking $100. June should be huge for you judging from your March. Even if you fall a little short of your goal at least you are trying and working towards it now. Imagine in a few years from now how this will be a large army sitting behind you enabling you to work more where you want.

    – Gremlin

     
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    1. My Dividend Growth

      It’s gonna be a big one for sure. Man, I can’t wait to have an army of income coming each month. We’re in it together man, and I’m excited for you as well. Thanks for the support!

       
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  10. My Dividend Pipeline

    Ryan,

    Fantastic update. I love the income, the progress, and the commitment you continue to show with your investments. If you keep this train rolling, we will be seeing a $200 floor much faster than $100. Then $500 will come soon enough and so on. Awesome stuff!

    MDP

     
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    1. My Dividend Growth

      MPD, I can’t believe it’s already getting to this point. If I could achieve half of your success I’d be a very lucky guy. You’re killing it my man and it’s pure inspiration for people in my position. Thank you for the kind words!

       
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  11. Dividend Beginner

    Hey Ryan,

    Looks like a good month, man. That $100 per month minimum is pretty damn awesome. You can buy a lot with an extra $100 / month.. Or you can reinvest it, like the smart person you are. Those automatic dividend re-investments are pretty cool, adding that $4.82 to your yearly income. Compounding will treat you well. I also like your lifetime dividends chart, interesting to look at. Go hard man, I look forward to seeing more.

    Best regards
    DB

     
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    1. My Dividend Growth

      $100 sure does go a long way and even further when compounded. It’s such a great strategy, I’m surprised more people don’t use it. Congrats on your recent purchase of Telus! Looks like a great company and I’m wishing you lots of success going forward. Thanks for the kind words!

       
      Reply

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