Dividend Growth Income – November 2022 Update

Compared to the past two months, this month looks a lot less exciting. However, I added a healthy amount to my forward dividend income that continues to snowball.

Background

The initiation of tracking my DGI income on Seeking Alpha can be found here. My dividend income is tracked across all of my portfolios (taxable accounts and IRAs, not 401ks). A large portion of the target $100,000 will be produced within retirement accounts and thus not easily accessible during early retirement; however, I will aim to maintain a 33% proportion of dividend income in my taxable account. With this level of dividend income and adhering to the 4% rule on the overall taxable account size, I will be able to reasonably consider a change in career into a more part-time role or pursue other methods of income until I am able to access retirement funds. Meanwhile, my retirement accounts will continue to build and grow until I’m ready to begin taking distributions to fund my retirement.

Forward Income Added

During the month of November I added $66.23 in forward income, now making my total forward income $4,300. I received a lower than average amount of dividends this month, $115.62, as it is historically a slow dividend month for me.

My breakdown of income added via new purchases, dividend reinvestments, and dividend rate increases does not include forward income added via re-allocation of funds that already existed within my portfolio (i.e. the money from the sale of one security invested into another). I will only be breaking down the effect of “new” capital entering the accounts in this section. Also, I would like to reiterate that increased income and tracking of funds from my recurring 401k contributions are not included in these articles as the fund options available to me do not paint a clear picture on income and distributions.

For my weekly $150 purchases I accumulated shares of Ally Financial (ALLY), Visa (V), Medical Properties Trust (MPW), and American Tower (AMT). Additionally, I continued my weekly $25 purchase of General Motors (GM) throughout the month. Lastly, I had the opportunity to once again invest additional cash into the market this month, totaling $500 in extra capital invested throughout November. All of these purchases combined with the $1,100 in monthly 401k contributions, I invested a total of $2,300 during the month. I deviated from my original plan of weekly contributions to Franchise Group (FRG) and instead pivoted to Ally. The main driver for this was the less than stellar earnings announcement from FRG, I will hold off any further investments until we hear more about the dividend going forward. I do not anticipate a cut to the dividend but the company may look to freeze it for a period of time as it manages headwinds, however I expect the dividend to grow handsomely in the long term once current challenges are tackled. Let’s first look at the forward dividends added via new purchases:

• 2.551 shares of GM adding $0.92 in forward income
• 25.144 shares of MPW adding $29.17 in forward income
• 1.707 shares of V adding $3.07 in forward income
• 1.025 shares of AMT adding $6.03 in forward income
• 15.909 shares of ALLY adding $19.09 in forward income

Due to November being a slow month for dividends in my portfolio, there was only a small amount of forward income added via dividend reinvestments:

• 0.252 shares of CVS Health (CVS) reinvested adding $0.55 in forward income
• 1.163 shares of ALLY reinvested adding $1.40 in forward income
• 0.278 shares of Realty Income (O) reinvested adding $0.83 in forward income
• 0.126 shares of Carrier (CARR) reinvested adding $0.08 in forward income
• 0.171 shares of American Financial (AFG) reinvested adding $0.43 in forward income. This dividend was actually part of a special dividend issued by the company in addition to its standard quarterly distributions.
• 0.101 shares of Starbucks (SBUX) reinvested adding $0.21 in forward income

A couple of companies announced dividend increases during the month, contributing a small amount to the growth of my future income:

• Fidelity National Financial (FNF) announced a 2.3% increase to the dividend, adding $1.89 in forward income. While at first glance this may seem small, it’s actually an impressive feat for a company that derives the majority of its revenue and cash flow from mortgage originations. I believe this symbolizes the strength of this company during the good times and the bad.
• Cogent Communications (CCOI) announced a 1.1% increase to the dividend, adding $2.57 in forward income. This is smaller than I would have liked but it is important to keep in mind that CCOI increases its dividend every quarter. With the most recent announcement, Cogent has now raised its dividend for 41 consecutive quarters.

Below we can see the amount of income added this month via new purchases, dividend reinvestments, and dividend increases for November as well as the total since the inception of this article series in August 2022.

	Forward Income Added	Total Income Added Since Tracking
New Purchases	$58.28	$431.25
Dividend Reinvestment	$3.50	$42.10
Dividend Increase	$4.46	$84.14
Total	$66.23	$557.48

Click to enlarge

Portfolio

I am happy to see the estimated annual income continue to increase across several holdings. I continued to add to my higher conviction positions and add to my higher yielders, a process that will continue to snowball my income and portfolio total value. My updated portfolio weighting and income by position can be found below.

Symbol	Percent Of Account	Est. Annual Income
VOO	24.79%	$600.04
ADI	5.29%	$145.92
MSFT	4.34%	$72.18
AMT	4.11%	$170.62
VICI	3.91%	$278.16
V	3.65%	$47.24
HD	3.31%	$121.27
UNP	3.15%	$117.45
MPW	3.09%	$426.47
O	2.96%	$217.95
CVS	2.82%	$95.06
LMT	2.74%	$105.66
UNH	2.56%	$48.08
CMCSA	2.49%	$114.59
DLR	2.35%	$159.43
GLW	2.28%	$112.78
ALLY	2.27%	$157.22
FRG	2.26%	$338.09
AVGO	2.20%	$102.11
WSO	2.09%	$106.48
BOC	2.05%	NA
BBY	2.01%	$129.57
GPK	1.87%	$50.90
CCOI	1.75%	$172.61
AMZN	1.74%	NA
FNF	1.66%	$115.66
TROW	1.44%	$86.16
GPN	1.29%	$19.36
SBUX	1.24%	$39.99
AFG	1.12%	$123.95
CARR	1.02%	$21.62
GM	0.18%	$2.47

Click to enlarge

Looking Forward

I don’t currently have a plan to invest much additional capital in December other than my recurring plans, but may invest a small amount of extra cash. With additional capital I will likely focus on Microsoft, there is a unique opportunity to grab shares right now at a discounted price.

I won’t make any change to my weekly $150 investments versus November, choosing to invest weekly in AMT, ALLY, MPW, and V. I will be actively monitoring the situation with Franchise Group, hopefully no major action will need to be taken.

Summary

Extra capital along with recurring investments stimulated the growth in forward income for November allowing me to add an additional $66.23 of future dividends, bringing me to a projected $4,300 in annual distributions. This month-over-month growth of 1.56% propelled my four-month total dividend income growth to 15.28%. I can’t wait to collect my dividends next month and watch my mountain of dividends continue to grow.