The month of May was pretty brutal for our little dividend portfolio. It seemed that everything we own was going in the wrong direction. As such, we took the biggest monthly hit we have ever had for this account. That’s how it goes sometimes. Maybe the month of June will be kind and give us a nice rebound. Looks like it’s off to a good start, but will it hold?

Looking at the performance of our dividend portfolio we see that our largest holdings like ABBV, JNJ, FRT and, our own personal anchor, MMM all suffered significant losses for the month. The good news is this gives us a nice buying opportunity for some stocks positions we haven’t added to in a long time. The bad news is we need cash in order to take advantage of this opportunity.

Our dividend portfolio ending May 2023:

Symbol	# of shares	Change from previous month
ABBV	13.994	0.140
ABR	31.374	1.013
BKH	3.167	–
DOW	9.762	–
EPD	5.113	0.095
FRT	6.304	–
GIS	5.282	0.032
IBM	3.272	–
IRM	13.136	–
JEPI	12.912	0.101
JNJ	6.274	–
K	2.125	–
KHC	5.352	–
KMB	2.127	–
KO	2.122	–
MAIN	10.676	0.060
MMM	9.465	1.000
MO	12.415	–
MPW	16.533	–
O	5.356	0.022
QYLD	32.557	0.627
SCHD	10.158	–
SO	2.151	–
SPTN	6.389	–
T	16.647	0.242
VTRS	13.451	3.000
VZ	2	–
WBD	3	–
XOM	5.303	–

In the month of May we received dividend payments from ABBV, ABR, EPD, GIS, JEPI, MAIN, O, QYLD and T. The dividend payments for the month totaled $62.95 all of which was reinvested into the underlying positions.

Year to date we have received dividend payments totaling $275.85! This is a 67% increase over the same five month period in 2022. That’s some excellent growth!

We were a little tight on investable cash for the month of May. As a result, we only made a couple of small moves in the month. As mentioned, MMM (1) has been taking quite a hit. The stock price has been heading south for awhile now, but the company is solid and will eventually put its lawsuit problems in the rearview. In the meantime, the stock hit a new low so we added a share to our position. Hopefully they can start getting the bad news out of the way and regain their footing in the near future.

In addition to MMM, we added to our position in VTRS(3). It trades at a very low price to earnings and it seems management has a good plan for the future. As they continue to retire debt and restore growth they should eventually be able to increase their dividend payments which currently sit at an absurdly low 16% of estimated 2023 earnings.

Since we didn’t have much to contribute in May we did the best with what we had.

On a year over year basis our dividend portfolio distributions grew a whopping 100.48%!

Stock	May 2022	May 2023	YOY Growth %
ABBV	$18.81	$20.50	8.98%
ABR	$3.90	$12.75	226.92%
EPD	$0.00	$2.46	246.00%
GIS	$2.60	$2.84	9.23%
JEPI	$0.00	$5.44	544.00%
MAIN    (m)	$1.30	$2.39	83.85%
O    (m)	$1.02	$1.36	33.33%
QYLD  (m)	$0.00	$10.94	1094.00%
T	$3.77	$4.27	13.26%
Total	$31.40	$62.95	100.48%

The most impressive parts of this growth are ABBV +8.98% and GIS +9.23%. These are two positions that we haven’t been able to add additional shares to for a couple of years now. That means all of this growth is just from reinvestments and dividend increases alone. You have got to love that type of pure growth! We would love to add to these positions if we could get the funds.

Another stock to note is ABR. For the first time in our dividend portfolio we were able to add over a full share just from the dividend distribution. This is another stock that has taken a beating as of late. But, that certainly benefited us when the DRIP hit this time around. We can’t complain about that.

We should also mention that QYLD paid twice in the month so that helped inflate our numbers a little. It’s kind of annoying when a monthly payer rolls two payments into a single month. This seems to happen a lot with QYLD.

At the month end for May 2023 our dividend portfolio was valued at $12,600.35. This is a 4.65% drop from April 2023. Again, this was the largest single month hit we have taken in the portfolio. On a year over year basis our portfolio value increased by 13.28% from May 2022. While the month might have had poor results, it’s nice to take a broader view of the portfolio and still see progress.

Month	2022	2023	YOY % Change
May	$11,123.15	$12,600.35	13.28%

Month	Year	Portfolio Value	MOM % Change
April	2023	$13,215.45	-4.65%
May	2023	$12,600.35

With the additional shares added to our positions and the reinvestment of all dividends our portfolio will provide projected annual dividend income (PADI) of $744 or about $62 per month on average. This is an increase of $14 per year or just over $1 per month on average from our April 2023 update. Additionally, our yield on cost(YOC) now sits at 5.62% which is an increase of 0.03% from the end of April.

Looking forward to June we should see some nice year over year growth as it’s a busy month for dividends. Also, getting some nice dividends to reinvestments should finally push us over the $750 annual PADI mark once an for all! It will be a nice milestone to reach.

On a side note, we have been considering making a change to our portfolio. We have held QYLD and JEPI as covered call option ETF’s for awhile now. We have been considering dropping one of the two, most likely QYLD, in order to build up a current position. I know these EFT’s are popular, but they also have their drawbacks when it comes to total returns. Holding two of them might not be the best thing for the long term growth of our portfolio.

While exiting a position might cause a temporary setback in terms month PADI it could be more beneficial in the long run. There are a couple of options we are considering.

First, we could build up an individual stock position and get closer to 100 shares. Then once we reach 100 shares we could do our own covered call options to generate income. This could be a way to replace the lost monthly PADI from exiting the position. Option number two would be to build up our core ETF position in SCHD and just let it grow. Either one of these options are good, but trying to decide on one is giving me a headache.

We would love to get some thoughts on this subject. Feel free to leave an opinion in the comments below.

Happy Investing!

Joe

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