Dividend Portfolio Update

It’s been a little over two months since we last provided an update on our dividend portfolio and there have been some interesting, and not so good, developments since then.

Obviously the markets have been going through quite a rough patch, to put it mildly, over the last two months. The result is that our portfolio has taken a little bit of a hit on the top line number. On the bright side it represents chance to add some shares to our holdings at a lower price. It can be hard to watch and difficult to stomach some of these roller coaster days, but we have to keep the big picture in mind.

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We have also had some negative developments within our portfolio when it comes to one of our holdings, namely Weber (WEBR). When we purchased this company at it’s IPO it was because we absolutely love the brand and their products. We have been loyal customers of Weber for many years and we carry a Weber grill with us everywhere we go and use it almost daily. We also buy their accessories and seasonings because they are great quality. Whether the company knows it or not their portable grills and other products are huge in the RV community and probably the most popular grills for people to carry with them. (I know, Blackstone’s are popular too. But, you have a griddle, not a grill!)

So when it was announced that Weber was going public it caught my attention, but I wasn’t going to jump in because this is a dividend portfolio. Then not to long after the IPO announcement the company released more details and in the announcement they stated they were going to initiate a small quarterly dividend of $0.04 once they go public. Of course this really caught my attention because now they fit what we are trying to build with this portfolio and we love their products! Buy what you use and love right?

Well, since the IPO the stock has been a complete disaster. The company has been getting killed by supply chain issues, freight costs and now a consumer that is watching the value of their money plummet everyday. As a result the company decided to fire the CEO and suspend all dividend payments indefinitely. So now not only have we lost quite a bit of value, but we are no longer getting paid to wait or adding more shares through DRIP at these low low prices.

Obviously these are very disappointing developments, but we have continued to hold the shares up to now as we try and figure out what direction we want to go. The argument for holding is that we still believe in the companies long term prospects as the brand is very strong. Sooner or later all of this bad news will pass. But, do we want to sit on what could be dead money for years with no dividend to reward us for our time? There is an argument to be made for taking the hit now and redeploying the funds to a better company with a secure dividend or into an ETF like SCHD while prices are depressed and primed for long term returns.

For now the impact of continuing to hold this position is that our PADI took a slight hit of $8. Also, the meme crowd has latched onto the stock due to it’s high short interest levels so the stock is extra volatile and can make 5%-10% moves in either direction on any given day. It’s kind of a fun battle to watch from the sidelines, but it’s not my cup of tea.

So we have a decision to make regarding this stock. We can cut our losses now, or in the near future, and redeploy the remaining funds somewhere else. Or we can continue holding as we do believe in the long term success of the company. IMO, if we intend to keep the stock then I think we also need to consider adding to our position while the prices are depressed to average down for long term success once the headwinds ease up. The problem with that is it takes funds from other opportunities. And if they don’t eventually reinstate the dividend it gets us further away from the purpose of this portfolio.

What would you do?

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Here is where our dividend portfolio currently stands:

Symbol# Of SharesChange Since Last Update
ABBV13.5950.134
ABR17.8834.375
BKH3.1080.024
DOW9.5080.131
FRT5.114
GIS5.1790.037
IBM3.1940.040
IRM12.658
JEPI6.1782.117
JNJ6.1890.042
K2.0890.017
KHC5.2450.061
KMB2.07
KO2.075
MAIN6.220.063
MMM7.2720.085
MO10.7041.000
MPW10.4473.000
O4.1930.030
QYLD26.810.543
SCHD32.000
SO2.1080.018
SPTN6.245
T140.204
VTRS8.2082.091
WBD3
WEBR50.613
XOM5.2140.047
As of 9/23/2022 Closing

Since our last update we have added shares to the following positions: ABR(4), JEPI (2), MO(1), MPW(3), SCHD(2) and VTRS(2).

We have also reinvested dividends totaling $90.74 via DRIP for ABBV, ABR, BKH, DOW, GIS, IBM, JEPI, JNJ, K, KHC, MAIN, MMM, O, QYLD, SO, T, VTRS and XOM.

Year to date we have reinvested $373.08 in dividends back into our portfolio which currently sits at $10,701 and has a yield on cost of 4.77%. While the top line value of our portfolio has taken a negative turn since our last update due to poor market conditions we were still able to increase our YOC by 0.03%. This is also despite the loss of the dividend for WEBR, so some positive progress was made despite the challenging environment.

With the addition of the new shares purchased and the reinvestment of all dividends received our portfolio will now provide forward annual dividends of $558 or $46.50 per month on average. This is an increase of $28 or $2.50 per month on average from our last update. Again it’s good to see some positive progress in these areas despite the loss of the WEBR dividend which had a negative impact of $8 to our PADI.

Going forward we would still like to build up our position in SCHD, especially while the markets are in the tank, as it will give us the most bang for our buck in the long run. The problem we run into is that there are too many good options in this environment and funds are limited. Sometimes we have a plan, but by the time we get some investable cash other options look too good to pass up so we end up spreading it around.

These are challenging times, but there are abundant opportunities out there. No matter where you are in your financial journey, now is the time to start new positions or build up existing positions in order to set up your portfolio for long term success as eventually the tide will turn.

Happy Investing!

Joe

P.S. If you haven’t heard we started an online store called StuckonCamping where you can get some of our designs on stickers, magnets, shirts, hats, tote bags and more! Check it out for camping, RV, Jeep and other outdoor designs! 

Our sticker designs and more are now also available on Zazzle at StuckOnCamping!

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2 thoughts on “Dividend Portfolio Update

  1. The Weber deal is a tough one. On one hand, there are many great deals in the market right now so taking the loss and redeploying the capital looks appealing. On the hand, Weber is a well know brand and the company has been around for long time and should rebound in the long term. Personally, I would consider adding to the position until I got 100 shares then sell covered calls to generate some cash flow.

    Liked by 1 person

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