Progress Update – May 2009 *
Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income rose in May, extending the streak to 3 months after February’s decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 17 of the last 18 months.
My goals were defined in this December 1, 2007 Investing Goals post and updated in my 2009 Investing Goals post. Below is an updated version of the table found in the original post.
| Description | Dividend Income Annualized |
Yield on Cost |
| 2027 Goal | 110,000 | 20.00% |
| 2017 Goal | 30,000 | 10.00% |
| 2009 Goal | 8,000 | 5.00% |
| December/2008 | 5,636 | 5.28% |
| Purchases YTD | 1,728 | -0.01% |
| Div. Changes YTD | (327) | -0.29% |
| Sales YTD | (1,217) | -0.11% |
| May/2009 | 5,820 | 4.87% |
| Purchases | 633 | 0.10% |
| Div. Changes | 5 | 0.00% |
| Sales | (478) | -0.03% |
| April/2008 | 5,660 | 4.83% |
The above information covers the current month and year-to-date through the current month.
Click here for a Detailed Historical Progress Table.
For the month, annualized dividend income increased $160, and Yield on Cost (YOC) increased 0.07%. These changes were a net of new purchases, dividend changes and sales. Let’s examine each of the these categories:
Purchases: The $633 increase in annual dividend income and 0.10% increase in YOC related to the following purchases (yield at the time of purchase):
- 229 CTL (9.90%)
- 64 PG (3.43%)
- 102 GPC (4.92%)
- 118 LLY (5.73%)
- 120 BLV (5.45%)
All the purchases, except PG, increased my YOC. As noted in earlier updates, I generally expect YOC to drop each month since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Dividend Changes: The $5 increase in annual dividend income and 0.00% no change in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
- 12 PG $0.40q>$0.44q 0.01%
- 11 RY $0.40141q>$0.44365q 0.01%
- (18) ETO $1.90m>$1.84m -0.02%
The change in RY relates to currency conversion as a result of the U.S. dollar weakening against the Canadian dollar.
Sales: The ($478) decrease in annual dividend income and (0.03%) decrease in YOC related to the following sales:
- (228) NNN (0.07%)
- (180) BBTÂ (0.02%)
- (70) PID 0.06%
During May, BBT cut its dividend and I immediately sold my entire position. Also in May, NNN froze its dividend. It was one of my larger holdings, so I reduced my position my 50% and will watch for additional signs of a dividend cut.
The ETFs/CEFs, volatility in their dividends does not align with my income portfolio’s goal of consistently growing income. In May I started the process of trimming back my ETFs/CEFs income holdings with the sale of PID. I will continue to reduce my holdings in this area each month.
Based on year-to-date results, I believe my revised estimate of $6,300 of annualized dividend income on December 31, 2009 is still obtainable.
That’s it for this time. The next monthly progress update will be on Saturday, July 11th.
(Photo: sanja gjenero)
Great work D4L.
Quick question. How did you come up with your goals?
Jae: I have a model that goes out to 2027. I enter some base assumptions like contributions, dividends, growth rates for each and it will calculate a target for each year. As I gain experience I will be able to fine tune it. Last year I was too conservative, while this year I was too optimistic.
Best Wishes,
D4L
I would be interested in hearing more about your rationale for purchasing more CTL. I see your latest analysis was from 2008. Is CTl expected to continue growing its dividend by its historical averages now that it has boosted its dividend?
As always thanks for the posts.
Corey: I consider CTL a high ris stock. My CTL purchase was primarily to replace the high risk NNN stock sold during the month. I don’t expect CTL to continue growing its dividend at the same high rate. Given its high yield I will be happy with modest growth.
Thanks for reading!
Best Wishes,
D4L