Using ‘The Dividend Report‘ section of my blog, I track and share my progress towards my dividend goals. 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 Q3-2018
For over a year, I’ve worked towards the same goal. I would like dividends to provide me with a monthly income of $1,500. My plan has dividends providing 25-33% of my monthly income.
Q3-2018 Dividend Income
The S&P 500 recorded it’s best quarter since 2013. The index rose 7.2% over the past three months. This puts the stock market up 8.99% for the year. There were no new stock purchases other than my regular index funds this month. However, I did enjoy an excellent year over year increases in my dividend income.
The graph below shows my dividend income history since 2013:
The table below shows my dividend history since 2013:
Q3-2018 vs Q3-2017
Last year’s Q3 dividend income was $537.76. This quarter I received $1,051.55 in dividends. This is a $513.79 or 95.54% increase from the same time period last year. The large increase is a result of three things. First, I purchased several dividend-paying stocks earlier this year. Second, I am still buying low-cost index funds every Monday. Third, I am continuing to max out my 401k every year. Or better put, I have more invested – thus I am collecting more dividends.
This quarter vs. last quarter
My Q3-2018 dividend income was $1,051.55. Last quarter (Q2-2018), my income was $987.86. This is a 6.44% increase from last quarter. Most of my stocks pay a dividend 4 times a year. Disney pays a semi-annual dividend which means they only pay two dividends a year. The Media conglomerate paid one of their semi-annual dividends this quarter. The dividend income from Disney makes up about half the difference in the quarter over quarter growth. Owning more index funds accounts for the remaining increases.
Last four quarters of dividend income
This past year (Q4-17 to Q3-18) year my total dividend income was $4,624.85. My annual trailing dividend income increased 12.5%. During the previous trailing four quarters, I earned $4,111.06 from dividends. I am very happy with this increase.
Now my average monthly dividend income is $385.40 ($4,624.85 / 12 months = $385.40), which is 25.69% of my current goal of $1,500/month. Previously, I was at 22.84% of my goal. I would like to reach my dividend goal by no later than 2019. This is a lofty goal but worth a shot.
I have a four-part plan to achieve my goal. First, I will continue to max out my 401k. 2018 will be the third year in a row for maxing out my 401k. 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. This is something I’ve done every year since 2013. I buy dividend growth stocks in my Roth and love that Uncle Sam cannot touch this money.
Third, I buy a low-cost index fund every Monday as a way to automate my investing. This takes a lot of guesswork out of building wealth. The fund pays a modest dividend of about 2.0% and tracks the performance of the S&P 500.
Fourth and lastly, I opportunistically buy dividend growth stocks in my brokerage account as opportunities present themselves.
New Dividend Growth Stock Purchases
There are no new individual stock purchases to report for this quarter. I have my eye on a couple of stocks that I would like to buy in the future. I am contemplating adding more $KHC to lower my cost basis. Also, AT&T ($T) intrigues me The telecom giant’s dividend offers a 6.0% dividend yield. Their payout ratio is a modest 58%. However, I need to dig further into their future earnings potential and debt load. I still need to do more homework.