Another month in the books and that means it’s time for another dividend portfolio update! After two solid months of gains our dividend portfolio took a small step back in August.
For most of the month it looked like the pullback would be sizable. However, after the fed summit in Wyoming and chairman nimrod’s speech the markets brushed off the worry and moved backup. While we didn’t recover all of the downside it was good to see the markets holding strong once again.
There were a couple of events that impacted our dividend portfolio in August. The biggest by far was J&J completing the spin off of Kenvue. The deal was very enticing with the opportunity to receive 8 shares of Kenvue in exchange for each share of J&J. That would have created a nice position for us in the new company. But in the end we decided to stick with our J&J shares as the company is just a machine. It is also our third largest holding and more importantly they are not adjusting the dividend after the transaction. We will probably look to add Kenvue into or portfolio down the line.
The next big news release that came out was that 3M settled one of their large legal issues. This is our second largest holding and it has been a disaster. While the settlement sends a lot of cash out the door it’s something that needed to happen. The company and the stock price have not been able to move forward with these issues hanging out there. Hopefully they can get everything out of the way and get back to growing the company and the dividend.
Of course there always needs to be one turd that stinks up the place. In August that turd was MPW who slashed their divided by a whopping 48%! Now, this wasn’t a surprise so it’s not like we were caught off guard. Everyone knew this was coming as the company has had its share of issues with tenants, short sellers and also some self inflicted wounds. As such, the stock price has tumbled to single digits and the dividend was not sustainable at the current amount. Because of this we not only took a hit to the value of our position, but also to our PADI. We will cover that part in a minute.
In our dividend portfolio MPW stock represents less than 1%. If we look at it in the context of our overall portfolio the position in MPW is negligible. As such, while everyone else seems to be bailing out we are still holding. After all, they are still the largest owner of medical properties and it’s not like there is an over abundance of healthcare facilities out there. But we would appreciate it if they would kindly get their shit together!
At this point we should probably consider the stock more of a speculative gamble than an investment. At least until they work through their issues and show they have long term viability. Worst case, if it completely tanks we could use the tax write off anyway. If they turn it around we will consider adding to our position and watch it grow. Either way we are fine with where we are at for now based on the small size of our position.
Our Dividend Portfolio Month Ending August 2023:
| Symbol | Qty | Change From Prior Month |
| ABBV | 14.13 | 0.136 |
| ABR | 32.212 | 0.838 |
| BKH | 3.2 | – |
| DOW | 9.894 | – |
| EPD | 5.208 | 0.095 |
| FRT | 6.372 | – |
| GIS | 5.324 | 0.042 |
| IBM | 3.312 | – |
| IRM | 13.277 | – |
| JEPI | 13.152 | 0.068 |
| JNJ | 6.321 | – |
| K | 2.144 | – |
| KHC | 5.413 | – |
| KMB | 2.145 | – |
| KO | 2.138 | – |
| MAIN | 11.871 | 0.067 |
| MMM | 9.59 | – |
| MO | 12.67 | – |
| MPW | 17.016 | – |
| O | 8.434 | 1.029 |
| QYLD | 33.542 | 0.658 |
| SCHD | 10.253 | — |
| SO | 2.173 | – |
| SPTN | 6.448 | – |
| T | 16.97 | 0.323 |
| VICI | 6 | 2.000 |
| VTRS | 16.574 | 3.000 |
| VZ | 3.039 | 1.039 |
| WBD | 3 | 3 |
| XOM | 5.348 | – |
In the month of August we received dividend payments from ABBV, ABR, EPD, GIS, JEPI, MAIN, O, QYLD x2, T & VZ. Our dividend payments for the month totaled $65.62 and all proceeds were reinvested into the underlying positions.
Yes, we are still holding QYLD and have pretty much decided to let it ride for now. At some point we will probably redirect the distributions to other positions. The best use of this type of ETF might just be as a vehicle to help generate cashflow and grow other positions. But, until it gets to a point where the distributions will make that difference we will let it continue to build up.
Our investable cash flow was pretty good in August so we were able to add to our existing positions in O (1), VICI (2), VTRS (3) and even the dreaded VZ (1). No new positions were started in the month.
Year to date we have received dividend payments totaling $455.53. This is a 43% increase over the same eight month period in 2022. On a year over year basis our dividend portfolio distributions grew 60.36% for the month of August. This was helped a little by receiving two payments from QYLD in the month. We took the hit for that delay in last months numbers so we will take the benefit this month.
| Stock | August 2022 | August 2023 | YOY Growth % |
| ABBV | $18.98 | $20.71 | 9.11% |
| ABR | $5.66 | $13.49 | 138.34% |
| GIS | $2.78 | $3.12 | 12.23% |
| JEPI | $2.51 | $3.80 | 51.39% |
| MAIN (m) | $1.32 | $2.71 | 105.30% |
| O (m) | $1.03 | $1.64 | 59.22% |
| QYLD (m) | $4.81 | $11.66 | 142.41% |
| T | $3.83 | $4.62 | 20.63% |
| VZ | $0.00 | $1.31 | 31.00% |
| Total | $40.92 | $65.62 | 60.36% |
Our position in ABR continues to excel and adding shares when the stock was getting beat up is paying off. Not only has our position grown, but the dividend distribution has thrived and become one of our largest payouts. This should help the position grow further as we will add a couple of shares a year from the dividend reinvestment alone.
We should also note that the dividend growth in ABBV and GIS is pretty amazing. We haven’t been able to add to either these positions since 2021. Yet they thrive and grow solely based on dividend growth and reinvestment.
At the month end for August 2023 our dividend portfolio was valued at $13,878.49. This is a 1.01% decrease from July 2023. On a year over year basis our portfolio value increased by 24.08% from August 2022.
| Month | Portfolio Value | MOM % Change |
| July 2023 | $14,020.32 | -1.01% |
| August 2023 | $13,878.49 |
| Month | Portfolio Value | YOY % Change |
| August 2022 | $11,185.45 | 24.08% |
| August 2023 | $13,878.49 |
With the additional shares added to our positions and the reinvestment of all dividends received our portfolio will now provide projected annual dividend income (PADI) of $778 or about $64 per month on average. This is an increase of just $10.00 per year and flat on a monthly basis from our July 2023 update. Additionally, the yield on cost(YOC) for our portfolio dipped .03% to 5.59%.
The low month over month change our PADI and the dip in our YOC are both a result of the dividend cut from MPW. This cut decreased our PADI by about $9.50 a year and offset some of the nice additions we made to our positions. It stinks, but this stuff happens and at least it was one of our small positions. Growing an investment portfolio isn’t always easy and there are often setbacks. This instance was relatively minor and thankfully we still kept moving forward.
Let’s look at the big picture for a second. We will probably eclipse our entire total 2022 dividend distribution in September of 2023! And our portfolio value is 24% higher than it was at this time last year. While we are not talking huge dollar amounts yet, the portfolio is growing and the dividends are growing. If we continue on this path the dollars will surely follow.
Thank you as always for reading our blog.
Happy Investing!
Joe
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