Friday, February 15, 2019

January 2019 Portfolio Summary

This post will summarize my asset size as of February 15, 2019. I will start with some snapshots of various market metrics:

The S&P500 has recovered very hard since the lows of December. The interest rates also remain noticeably lower. Lower interest rates help dividend paying stock prices rise. And overall, lower interest rates are good for stimulating the economy.

Oil prices remain depressed. My investments do not involve any oil so I am not impacted. The low price in oil to me is positive as it lowers the input cost (i.e. plastics, chemicals, shipping freight) for a lot of the businesses I own shares in. The dollar continues to be very strong, this is good for when I travel abroad but not good for the multinational companies that I own shares of. When these multinationals have to bring back money earned from selling overseas, the high strength of the dollar makes the earnings received back in the states lower than if the dollar was weaker..
My portfolio follows the S&P500 quite closely except often times more dampened since it is more conservatively based in dividend paying stocks with strong histories. My portfolio holds less cyclical companies than the market index. During high growth periods, my portfolio may lag a little and during recession times my portfolio will hold up better. My portfolio will always have a higher yield than the S&P500 so that will always help the returns. My portfolio will also (in my conservative view) have less dividend cuts during recessions compared to the index.

In January through mid February my portfolio performed well. I am now back into the $600K+ range. I also made some additions recently and now my portfolio is almost topping $17K in annual dividends. I think soon I will be able to hit $20K+ in annual income sometime this year which will be a great milestone. I am shooting for $700K+ in my net worth by end of this year. Tax season is around the corner, I will need to calculate if I owe anymore taxes or will receive some back.

Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Johnson & Johnson JNJ Health $35,153.24 5.67% $942.24 2.6804% AAA A++ 1
Visa Inc V Financial $33,020.86 5.32% $230.66 0.6985% A+ A++ 1
Philip Morris International Inc PM Staples $31,255.50 5.04% $1,741.30 5.5712% A B++ 2
Altria Group Inc MO Staples $30,277.62 4.88% $1,971.68 6.5120% BBB B+ 2
Home Depot Inc HD Discret $26,601.15 4.29% $583.86 2.1949% A A++ 1
NextEra Energy Inc NEE Utilities $24,517.93 3.95% $596.13 2.4314% A- A 2
PepsiCo PEP Staples $24,480.31 3.95% $806.66 3.2951% A A++ 1
Becton Dickinson and Co BDX Health $22,590.99 3.64% $284.57 1.2597% BBB A++ 1
Realty Income Corp O REIT $21,003.78 3.39% $816.31 3.8865% BBB+ A 2
Mastercard Inc MA Financial $20,712.83 3.34% $124.38 0.6005% A A++ 1
3M Co MMM Industrial $19,133.13 3.08% $537.78 2.8107% AA- A++ 1
Ross Stores Inc ROST Discret $18,494.49 2.98% $178.42 0.9647% A- A 2
Air Products & Chemicals, Inc APD Materials $17,079.76 2.75% $461.78 2.7036% A A+ 1
Clorox Co CLX Staples $16,933.80 2.73% $415.90 2.4560% A- B++ 2
Xcel Energy Inc XEL Utilities $16,344.01 2.63% $466.36 2.8534% A- A+ 1
Procter & Gamble Co PG Staples $16,200.70 2.61% $471.90 2.9129% AA- A++ 1
McCormick & Company MKC Staples $15,813.70 2.55% $283.01 1.7896% BBB A+ 1
Illinois Tool Works Inc. ITW Industrial $14,718.75 2.37% $424.32 2.8829% A+ A++ 1
Kimberly-Clark KMB Staples $14,368.86 2.32% $506.63 3.5259% A A++ 1
Automatic Data Proc, Inc ADP Tech $14,351.26 2.31% $306.11 2.1330% AA A++ 1
WEC Energy Group, Inc. WEC Utilities $14,203.42 2.29% $451.33 3.1776% A- A+ 1
AT&T Inc T Telecom $13,339.20 2.15% $913.46 6.8479% BBB+ A++ 1
Church & Dwight CHD Staples $12,443.04 2.01% $176.35 1.4172% BBB+ A+ 1
The Coca-Cola Co KO Staples $12,212.28 1.97% $417.88 3.4218% AA- A++ 1
Stryker Corporation SYK Health $11,031.71 1.78% $123.67 1.1211% A A++ 1
Colgate-Palmolive Co CL Staples $11,018.94 1.78% $282.84 2.5668% AA- A+ 1
Dominion Resources, Inc D Utilities $10,722.92 1.73% $540.12 5.0370% BBB B++ 2
Starbucks Corporation SBUX Discret $10,122.59 1.63% $205.77 2.0327% A A++ 1
TJX Companies Inc TJX Discret $10,025.02 1.62% $157.97 1.5758% A+ A++ 1
Microsoft Corporation MSFT Tech $9,860.08 1.59% $169.72 1.7212% AAA A++ 1
General Mills, Inc. GIS Staples $7,488.41 1.21% $329.60 4.4015% BBB+ A+ 1
Abbott Laboratories ABT Health $7,223.80 1.16% $125.00 1.7304% BBB A++ 1
Honeywell International Inc. HON Industrial $7,132.90 1.15% $155.43 2.1791% A A++ 1
General Dynamics Corporation GD Industrial $6,945.03 1.12% $150.12 2.1615% A+ A++ 1
McDonald's Corporation MCD Discret $6,938.11 1.12% $183.05 2.6383% BBB+ A++ 1
Medtronic plc MDT Health $6,742.76 1.09% $147.82 2.1923% A A++ 1
Kraft Heinz Co KHC Staples $3,355.18 0.54% $177.19 5.2809% BBB- A 2
Resideo Technologies Inc REZI Industrial $125.03 0.02% $0.00 0.0000%
Garrett Motion Inc GTX Industrial $46.64 0.01% $0.00 0.0000%
Misc Type ……….. Partial Totals Weight Yr Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $594,029.70 95.77% $16,857.31 2.8378%
Investable US Dollars $19,633.23 3.17%
Miscellaneous Assets $6,613.00 1.07%
. .. Equity + Misc Weight …..2 ….. …..222 …22 …..223
Total $620,275.93 100.00%

Right now JNJ and Visa take the crown spot in my portfolio. Visa and Mastercard both have grown spectacularly on their own, I have owned both for many years and I placed bets in them due to their share price growth and dividend growth. These two positions provide little to no income but I value their growth potential, I use higher yield no growth type companies to balance the overall yield of my portfolio.

MO has fallen away a lot due to the share price declines. I am still going to hold MO because the dividend yields is very high and the payout is safe. I am considering adding more to pair my low income high growth purchases with a higher lower growth company. To me, MO remains a well run company with high free cash flow and dividend payout capability, they are also investing heavily for their future which impacted their balance sheet and share price negatively in the short term. In the next 10-30 years I still remain positive on MO. For annual dividend raises I think 4-5% a year is a conservative estimate (paired with the 6% dividend yield reinvested this is a 10-11% income growth a year which is great). They have been doing 8% a year for a long time but I think this will slow after the recent acquisitions and continual declining cigarette unit sales (the cost hikes can't continue as strong forever).

The graph above shows my net worth progress. The start of the year has been very positive, largely due to the rise in nearly all stocks in the S&P500. The $600K barrier was crossed for a second time and I am around $620K at the moment. The large spike upward in the market has unfortunately made buying more difficult. I no longer see good bargains anymore. And I have around $20K in cash needing to be deployed.

The graph below highlights the dividend income growth of my portfolio. The growth below comes both from each company's dividend raises every year plus my periodic contributions. In the last several years I have not received any dividend cuts. There have been a few companies that have froze their dividend like GIS and KHC, which I have no problem holding. Even if they cut the dividend up to 25% I will still hold it. 

It is only when companies slash the dividend over 30% that I become concerned. Even worse is if management cut their dividend after promising the safety and continuous increase (as to me that is a management that has no idea what they are doing). There have been two companies that I have held as non-core positions which cut their dividend severely. To my recollection they were SDRL, a small $800 position and KMI which was around $4000 position. KMI management was too bullish, they were reckless and overpromised and underdelivered. I no longer own both in my portfolio and they were mistakes I made back in 2014-2015 when I was foolish and chased high yield. Never chase yield, always be conservative and seek safety and protection in the dividend. Growing the dividend income is not a sprint race, it is a slow and methodological marathon.

Happy investing!


  1. Interesting, did anything in particular prompt your change in attitude to ≤25% dividend cuts?

    1. I think most dividend investors have too strict a rule. I never really had a firm rule of any cut = sell. It's usually not best to sell after a cut is announced because the price will reflect the dividend cut so you will be selling at a huge loss.

      Since my portfolio is very diversified a small cut is nothing in the overall portfolio. I would rather hold the loss and wait for it to recover. My preference is hold forever. The only time I will always sell is if there are financial irregularities.

  2. Thanks for sharing. Some good info. Great to see your forward dividend income is growing.

  3. thanks for sharing. would it be possible to add cost price data to your sheet, so we can see the yield on cost and value appreciation of your portfolio over time? good luck!