Dividend Update: October 2015
October’s dividend payouts are in the books, and it never gets old. There’s just nothing quite like seeing real cash hit my investment accounts like clockwork throughout the year. I do this by owning small pieces of growing businesses that have lengthy track records of sharing their profits with me through dividend raises each year. I’m building an ever rising stream of income that I can use to pay for real life expenses if I ever need to. This is especially practical in my unpredictable line of work in the entertainment industry where I’m often unemployed and trying to find the next gig like I am right now.
In October, I received dividends from 8 of my investments for a total of $108.49. I reinvested all of them which added $3.77 to my 12-month forward annual dividend income. This month’s payouts were lower because my holding of medical device maker Baxter International (BAX) spun-off its biotechnology arm Baxalta (BXLT), and as a result the dividend was reduced. These are two new businesses going forward and while I hated seeing a dividend cut, I still like the underlying companies and am choosing to hold on for now. However, many investors are selling, and JC at Passive Income Pursuit recently made some very persuasive arguments on why it might be time to sell Baxter based on its valuation. Shortly after he wrote that, he sold his position. Here’s a snapshot of my dividend payout activity:With the Baxter / Baxalta dividend cut, October’s total dividends of $108.49 declined 8.72% from last quarter’s $118.85 in July. Looking back further, dividend income was up 97.33% over last year’s $54.98. Here’s my updated dividend payouts chart:So far in 2015, I’ve received $1,450.35 in dividends. I have two more months to try and hit my goal of $2050 by the end of the year. Since I’m without work at the moment and not able to invest fresh capital, I expect to barely miss this goal.The biggest highlight in October’s numbers were all the dividend raises that were announced. 5 different businesses gave me a raise over the month, and together they added $18.84 to my forward annual income. Based on my portfolio’s current 3.5% yield, it would have taken $646 in fresh invested capital to earn that much forward income. Philip Morris (PM) stood out by having a very disappointing 2% raise. Kinder Morgan (KMI) and Omega Healthcare Investors’ (OHI) raises seemed minimal, but only because they’ve been increasing their payout each quarter; KMI’s payout is up 15.91% and OHI is up 7.69% over a year ago. That’s pretty phenomenal income growth for two stocks that have a starting dividend yield of more than 7%. Here’s the full list:Last year in October, I had only received $593.81 in total lifetime dividends. This year that number increased 284.75% to a new total of $2,284.69. Here’s an updated chart:With all those dividend raises and reinvestment’s, I feel great about my portfolio over October. My total annual dividend income is now $2,744.19 or an average of $228.68 a month. Progress is progress and while my current capital contributions are limited at the moment, it’s relieving to know my portfolio is still working hard for me.
How were your October dividends? What do you think about BAX and BXLT?