Hello again! It’s been a little over a month since we gave an update on our little dividend portfolio and there are quite a few things to report. We have added some new positions, increased some positions in current holdings and of course we have the DRIP slowly helping our portfolio grow. Before we get into some of the details let’s take a look at the current make up of our account as of now. I have sorted in alphabetical order to make it easier to read:
| Symbol | # Of Shares |
| ABBV | 7.077 |
| ABR | 2 |
| BKH | 2 |
| DOW | 5.021 |
| FRT | 4 |
| GIS | 5.026 |
| IBM | 3 |
| IRM | 10.073 |
| JNJ | 5 |
| K | 2 |
| KHC | 2 |
| KMB | 2 |
| KO | 2.016 |
| MMM | 3 |
| MO | 8.036 |
| MPW | 6.042 |
| O | 2.021 |
| QYLD | 13 |
| SO | 2.01 |
| SPTN | 6.062 |
| T | 9.11 |
| WEBR | 50 |
| XOM | 3 |
As you can see our portfolio continues to grow through the addition of new investments and the reinvestment of dividends as they are received. We now hold a position in 22 companies and 1 ETF. So far in August we have started new positions in Federal Realty Trust (FRT), Kraft-Heinz Company (KHC), Exxon-Mobil (XOM), Global X NASDAQ 100 Cover Calls ETF (QYLD) and Weber (WEBR).
Some of you might be saying “hey Weber isn’t a dividend stock” and you would be correct in that assessment at this current moment. The company went public in early August and it is a company who’s products we own and use constantly. Make no mistake, we love our Weber grill and they are extremely popular in the RV camping and glamping communities. Additionally, they are the market share king for grill at home products. For us this was an opportunity to buy into a company who’s products we use, love and even promote on some of our blogs like RV Camping and Glamping Favorites.
Now back to the dividend aspect, because that’s what our portfolio is all about. While doing research on the company before the IPO there was this little nugget in the data that was released “Weber will also begin paying a quarterly dividend in the fourth quarter amounting to 25% of net income”. That’s right, they are not a dividend stock today but they will be starting in Q4. Will it be a huge dividend? Probably not right out of the gate at only 25% of net income, but they will continue to grow and hopefully their dividend continues to grow also. And let’s not forget that this is not a start up company as they have been around for over 70 years and they are pretty solid financially. The grilling market is crowded and competitive which is another reason why I like Weber as they have the products and brand recognition to maintain market share and a competitive advantage. As with all IPO’s the price has been volatile as it took off and then fell back down to earth. This drop allowed us to add more to our original position very close to the original IPO price. Unless there is an amazing buying opportunity we will probably stay with what we have until we see where the dividend gets set.
Another addition we made was the Global X NASDAQ 100 Cover Calls ETF (QYLD). I was really on the fence about this investment because if things seem too good to be true they probably are. When I see a yield over 11% it typically looks yummy but ultimately it tastes like garbage. The purpose of this ETF is to generate current income by selling covered calls of its underlying positions. As a result you give up some price appreciation for that income which doesn’t sound like a good long term investment. However, one of the strategies I would like to eventually deploy is selling covered calls on shares I own, but that is going take some time because you need to have enough shares of the underlying stock to do this. So after doing some research I decided to just dip my toes into this ETF and see what happens. For now I’m going to DRIP the income and use it to build a bigger position. In the future I might take the income and redeploy it to other investments where I can get more long term price appreciation. Think of it as options trading with training wheels.
We also added small positions in a few steady long term dividend paying stocks with FRT, XOM and KHC as their prices declined a little and became more attractive. There is not much to say about these companies as their dividend history is solid and stable which in turn adds those qualities to our portfolio.
With the additions we have made this month along the reinvestments our dividend portfolio is now hovering around $7,500 and has a yield to cost of 4.15%. This will generate current forward dividends of just over $300 annually or $25 a month. It will be interesting to see how this changes once Weber puts their dividend plan into action but I’m not expecting it to make a large immediate impact. Slow and grow is just fine.
Thank you for reading our blog. Only one more week until we hit the road and head to our next location. As always we will keep you updated here and on social media.
Joe