Using ‘The Dividend Report‘ section of my blog, I share my progress. I will also share dividend growth stock ideas. Additionally, I will share why I buy or sell. Dividends are truly a wonderful thing.
The Dividend Report Q2-2018
For over a year, I’ve worked towards the same goal. I want my average dividend income to provide $1,500/month. My plan has dividends providing 25-33% of my monthly income.
Q2-2018 Dividend Income
Like last quarter, the stock market remained rocky with several ups and down. The S&P 500 posted a 2.93% gain in the second quarter of 2018. This put the market in positive territory for the year after as the market recovered from the first negative quarter in almost two years.
In times of volatility, it’s easy to be fearful of the market. However, if you can keep your cool, market volatility also gives great buying opportunities for stocks. I added to one of my dividend stock positions this past quarter.
I would have bought more stocks, however, I am focusing on paying off my student loans and the HELOC I used to purchase rental property #4.
The graph below shows my dividend income history since 2013:
The table below shows my dividend history since 2013:
Q2-2018 vs Q2-2017
Last year’s Q2 dividend income was $686.46. This quarter I received $987.86 dividends. This is $301.40 or 43.91% more compared to the same period last year. This was largely due to the dividend increases that I outlined at the end of last year, buying low-cost index funds every week, last quarter’s purchases, and maxing out my 401k.
This quarter vs. last quarter
My Q2-2018 dividend income was $987.86. Last quarter (Q1-2018), my income was $492.98. Are you scratching your head wondering why there is such a big difference?
I certainly did.
A few of my funds do not pay dividends in the first quarter.
Additionally, I also owned more stock in the second quarter because of my regular index fund purchases and 401k contributions.
Oh, I bought several stocks in Q1. However, I missed the Q1 dividend for some of these companies.
Thankfully, my dividends continue to grow when you look at the same time periods of each quarter and on an annual basis.
Last four quarters of dividend income
The past year (Q3-17 to Q2-18) year my total dividend income was $4,111.06. The last report, I made $3,809.66 from dividends. This is a 7.1% increase compared to the previous 4 quarters; I am very happy with this increase.
There are two main reasons for the increase.
First, I continue to max out my 401k. This will be the third year in a row of achieving this goal. Regularly contributing to a 401k is one of the 6 steps to a 6-figure net worth. In addition to my 401k contributions, I also max out my Roth IRA and buy stocks in a brokerage account. So, basically every month I have more money working for me.
Second, 10 of my stocks increased their dividend. This means I own the same amount of shares. Each share now pays me more for owning the same great company. How awesome is that?
My average monthly dividend income is now $342.89 ($4,111.06 / 12 months = $342.89), which is 22.84% of my current goal of $1,500/month. Previously I was at 21.16% of my goal. For the rest of 2018, I am hoping to significantly improve my dividend income. I would like to reach my dividend goal by no later than 2019. This is a lofty goal but worth a shot.
I will work towards this goal by contributing the maximum amount to my 401k. Additionally, I will continue to purchase low-cost index funds on a weekly basis. Furthermore, I will buy dividend growth stocks as I opportunities to buy them at discounts.
New Dividend Growth Stock Purchases
I added to one of my dividend growth stocks during the second quarter. Earlier this year, I established a position in Dominion Energy. The company’s stock continued to fall with the market volatility; this was an opportunity I took advantage of as I bought more shares. Below you will find the summary I shared last quarter on my initial purchase.
Dominion Energy Inc. ($D) – I absolutely love this company and have followed them for years. This was also a new purchase. Dominion is a utility company in the mid-Atlantic region that provides electricity. The company also operates a liquified natural gas (LNG) business. In fact, Dominion is the first company to ship LNG internationally. Combine this with their recent acquisition of SCANA, Dominion offers a company with great assets in an industry with high buriers to entry. The company has a very healthy balance sheet and highly predictable revenues. Utility companies are basically legal monopolies. Best yet, the company’s dividend is approximately 5.0% AND the company is committed to increasing their dividend by 10% annually through 2020.