May dividend update – dividend increase
Apple’s 10.5% dividend increase was a welcome sight in May. I don’t own a ton of individual shares of Apple. However, it is represented in a lot of my mutual funds and ETFs so I know that will carry through to those as well.
May is another low month as I get ready for June. June is one of the four biggest months for dividends for me as a holder of a lot of mutual funds and dividends.
It’s great to see any stocks you own raise their dividends year over year. Dividend increases are a key part of long term returns. I’m not an investor who targets dividends specifically. However, most of the companies I own and am interested in have excellent and consistent free cash flow. That generally leads to regular dividend bumps if the company chooses to return value to shareholders in that manner.
June brings another opportunity for a dividend raises as one of my larger holdings, UnitedHealth Group(UNH) generally announces dividend raises in June. Last year, they bumped the dividend 25% after raising it 33% for two years in a row before that. The company has excellent free cash flow and is growing earnings at a solid pace.
Even with those big increase, their payout ratio is 33% and that’s off an earnings base in 2016 that’s expected to increase quite a bit in 2017. The yield has fallen recently to 1.39% due to strong performance in the stock so I’m hopeful we see another 25% bump here. The company definitely has the room to keep giving out big increases yearly if it chooses to continue its shareholder return strategy.
I’m excited to see how June looks and am hopeful it’s a bigger month than last September. It’d be nice to see good growth against last June. I saw a 26% bump in March dividends y/y so it’d be awesome to see something close to that in June. That would help a lot in getting to my goal of at least 8k in dividends this year.
That’s enough about June. Let’s take a look at how the dividends looked in May and where I sit YTD.
I only have to real payouts this month. I own Apple in my taxable account and my bond mutual fund in my tax-advantage account.
Both of those payouts total up to $91.74. I’ve contribute a bit towards my bond fund recently as the stock market rally has driven my bond allocation below target. That will help my monthly numbers going forward but they’ll still be far behind the quarterly months as you can see by the graph.
This brings the total for 2017 so far to $1545.06. That’s a ways off my $8,000 bronze goal for 2017 but we still have June, September and December. Most of my dividends are paid out in those months. I won’t really know if I’ll hit that number until the end of December as that month makes up a big percentage of my dividends due to my holdings.
Steve’s hourly wage has fallen these last two months and was well below minimum wage at $0.55/hr. My dividend employee Steve has taken it easy in preparation for June. There, he’ll hopefully try much harder. The hourly wage for the year is now down to $1.85/hr so not quite enough to retire on yet. That number will rise before the end of of the year due to the timing of the payouts.
June is up next so that’ll be another big month. Last year, June was $1265 so I’m hoping to see a number a good deal above that. I’ve had a lot of cash go into my accounts since then. Combine that with the dividend increases that have occurred since then in the securities I own and we’ve got a good time. It’s hard to guarantee growth when you own so many mutual funds and ETFs since payments can vary in those. However, I’m pretty sure I should see some growth and am hoping for something similar to what I saw in March.
That’s it for this month. How was your may and are you looking forward to seeing what June brings?
May Total : $91.74
2017 Total : $1545.06
Portfolio monthly hourly wage : $0.55/hr
Portfolio annual hourly wage : $1.85/hr
Nice results! May has been kind to me with a few stocks paying out. I don't expect much from June, only O and VFC are paying out. But still its free money!
Still not a bad month for you. Like you said we still have three quarter ending months to go this year so you should see some big gains coming soon.
Keith - DivHut
I think we're all looking forward to June but May was still a nice showing for you. After all, $92 from just two investments is pretty solid. Looks like you have something to look forward to with UNH as well. That seems like a good investment your picked up. As your blog title says, “Time in the market,” is what being a dividend growth investor is all about.
That’s a good report TITM. In comparison, I made $2.85 in May so I do have a ways to go before I am posting numbers like yours. The fact that you’ve made $1500 so far in 2017 is very impressive. Hopefully, you can reach your bronze goal in 2017 of breaking $8k.