Dividend Growth Income – October 2022 Update

Another big month of added forward income brings me closer to my ultimate goal. I received a nice bump in income from reinvested dividends this month, higher than previous months. However the overwhelming majority of increased income came from a large, above average, injection of capital into my portfolio.

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 October I added $194.35 in forward income, now making my total forward income $4,233. I also received a higher than average amount of dividends this month, $490.29, as it is historically a good 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 Franchise Group (FRG), Corning Inc. (GLW), 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 lucky opportunity to once again invest a large amount of additional cash into the market this month, totaling $2,025 in extra capital invested throughout October. All of these purchases combined with the $1,100 in monthly 401k contributions, I invested a total of $3,825 during the month. Readers may notice the addition of a large number of shares in one of the most polarizing stocks on Seeking Alpha, Medical Properties Trust. The rationale for devoting a large portion of this month’s capital into MPW is that I am purely looking to accumulate, and I will continue to do so for the next month. This position will continue to grow in weight in my portfolio, however once I reach my target accumulation I will just sit and let itself compound. In the long term, my higher growth positions will slowly dwarf this position in my overall portfolio. Now, let’s first look at income added via new purchases:

• 3.068 shares of GM adding $1.10 in forward income
• 75.800 shares of MPW adding $87.93 in forward income
• 14.932 shares of GLW adding $16.13 in forward income
• 3.412 shares of AMT adding $20.06 in forward income
• 11.230 shares of FRG adding $28.08 in forward income
• 3.823 shares of Ally Financial (ALLY) adding $4.59 in forward income
• 1.924 shares of Visa (V) adding $3.46 in forward income

A respectable amount of income was added via dividend reinvestments this month:

• 0.454 shares of (VOO) reinvested adding $2.67 in forward income
• 0.475 shares of Graphic Packaging (GPK) reinvested adding $0.19 in forward income
• 2.201 shares of VICI Properties (VICI) reinvested adding $3.43 in forward income
• 0.493 shares of Best Buy (BBY) reinvested adding $1.74 in forward income
• 5.927 shares of MPW reinvested adding $6.88 in forward income
• 2.896 shares of FRG reinvested adding $7.24 in forward income
• 0.312 shares of Realty Income (O) reinvested adding $0.93 in forward income
• 0.059 shares of American Financial (AFG) reinvested adding $0.15 in forward income
• 0.192 shares of AMT reinvested adding $1.13 in forward income
• 0.913 shares of Comcast (CMCSA) reinvested adding $0.99 in forward income
• 0.100 shares of Watsco Inc. (WSO) reinvested adding $0.88 in forward income

Forward income was only boosted via one dividend rate increase:

• Visa announced a huge 20% increase to the dividend, adding $6.78 in forward income

Below we can see the amount of income added this month via new purchases, dividend reinvestments, and dividend increases for October 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	$161.35	$372.97
Dividend Reinvestment	$26.22	$38.60
Dividend Increase	$6.78	$79.68
Total	$194.35	$491.25

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Portfolio

I am happy to see the estimated annual income increase across a number of different positions. 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	Percentage of Portfolio	Est. Annual Income
VOO	25.24%	$600.04
(ADI)	4.71%	$145.92
(MSFT)	4.24%	$72.17
AMT	3.99%	$164.59
VICI	3.93%	$278.15
V	3.50%	$44.16
(HD)	3.25%	$121.26
O	3.13%	$217.12
(UNP)	3.06%	$117.45
(LMT)	2.95%	$105.66
FRG	2.82%	$338.08
(CVS)	2.80%	$94.50
(UNH)	2.78%	$48.08
MPW	2.70%	$397.30
CMCSA	2.32%	$114.58
GLW	2.31%	$112.77
WSO	2.26%	$106.48
(DLR)	2.25%	$159.43
ALLY	2.16%	$136.73
(BOC)	2.14%	—
(AVGO)	2.01%	$102.10
GPK	2.01%	$50.89
(AMZN)	1.98%	—
(FNF)	1.74%	$113.09
BBY	1.73%	$129.57
(CCOI)	1.70%	$170.71
(GPN)	1.52%	$19.36
(TROW)	1.31%	$86.16
AFG	1.21%	$123.52
(SBUX)	1.12%	$39.77
(CARR)	0.98%	$21.54
GM	0.12%	$1.55

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Looking Forward

I don’t currently have a plan to invest another large amount of additional capital in November other than my recurring plans, but will likely add at least a little extra. With additional capital I may look to pick up some shares of Ally as I believe in the future of digital banking, I’m also looking at Visa and Microsoft. My long term vision for my portfolio involves both of these high-growth blue chips as the cornerstones so I will continue to look for opportunities to add shares.

I will only make a slight change to my weekly $150 investments, choosing to invest weekly in AMT, FRG, MPW, and V. Essentially just swapping out GLW for V, I find the current opportunity and long-term growth prospects of Visa too hard to pass up for the time being. I’m interested in seeing the Franchise Group Q3 report in early November, if the company is able to prove they have managed inflation costs and logistics hurdles it could breathe some life into the stock. Secondly, this report will be crucial in assessing the dividend announcement that typically occurs one month post-earnings. Many current shareholders will be hoping to see at least a small increase in the quarterly dividend, despite the headwinds faced this fiscal year, due to the fact FRG has a recent history of aggressively raising its distribution.

Summary

A large sum of extra fresh capital stimulated the growth in forward income for October allowing me to add an additional $194.35 of future dividends, bringing me to a projected $4,233 in annual distributions. This month-over-month growth of 4.80% propelled my three-month total dividend income growth to 13.49%. The next few months may bring slower sequential growth but I am more than happy to continue building my income dollar by dollar, month by month.