2014 May Dividend Income, Spending, and a Pair of Trades

It's looking like my posts will be a bit fewer and far between while I settle in to my new house and get hooked back up to the internet.  So for the sake of efficiency I will probably be combining posts for the next few months.  For this month I present to you May's earnings, spending, and a few early month portfolio trades!

May Spending 2014

I accidentally blew my budget for the month of May.  I had to pay closing costs on my home purchase and pick up a lawn mower and weed eater to attack a lawn that had been neglected for almost a year.  With a few other essential home purchases I ended up spending a total of $2526.00 for the month.  Here is the spending breakdown!

The Misc Expenses, and Food and Dining categories were my biggest costs for the month.  Misc expenses includes my final closing costs, yardpocolypse equipment, moving truck fees, and a few smaller house items.  The food and dining budget was also part of the cost of moving as I took my friend and his fiance out for dinner and drinks to pay them back for helping me move(money well spent!)

While I was not able to meet my goals this month, going forward I am in a significantly better position to save money on both utilities and rent.  

May Dividend Income

My dividend income for May is as follows:

PSEC:  $11.04

KMI:    $18.90

For a total earnings of $29.94.  While this number still seems small, I have managed to double last quarter's (February) earnings.  I am extremely happy with this outcome and really look forward to blowing this number away this coming August.  Here is a breakdown of this months dividend income, and dividend income to spending.

Total dividend coverage to spending this month was 1.25%  This beats last February's 0.62% even considering I spent significantly more in May.  I am extremely happy with this outcome and am excited as to what the future holds.

Early June Portfolio Shake Up

Early in June I made the decision to sell off a few positions in my portfolio that do not meet my overall investing goals.  My typical investments are in dividend growth or high yield stocks.  While I plan on building my portfolio with rock solid blue chip investments I also occasionally dip into the foreign markets or industries with high yield stocks that have not recovered fully after the recession.  Two of my positions in my portfolio did not meet these criteria.  INTC and CHK.  Neither company has been successful at raising dividends in an extended time period, and they aren't my favorite high yield distressed companies. 

I took $600 of my own money and sold my positions in INTC and CHK (both for a profit), using the money to purchase shares of VZ and NAT.  I bought a total of 36 shares of Verizon for a price of $1797.12 and 157 shares of NAT for a total of $1307.81.  After the smoke cleared my new 12 month forward dividend income sits at $1964.40 per year.  My portfolio has been updated to reflect the new changes.

I am currently closely monitoring everything currently in my portfolio and RY, TD, and GM for a possible purchase later this month.

Thanks for reading and I hope you had an amazing May!

April 2014 Dividend Income, May Purchases, Dividend Raises and an Update Oh My!

May has been one of the craziest and busiest months of my life.  Not only have I been working long days (up to 14 hours/7 days a week) I have also closed on a house and moved in my spare time.  The end of May marks a brief reprieve from the long hours at work.  In the mean time I have missed out on many updates for you!.


April 2014 Dividend Income

The month of April marks my fourth month of investing in income and dividend growth stocks.  April was my largest harvest yet and I totaled $66.55 of income compared to $14.97 from January.  Compared to my spending of $1868.00 for April this dividend covers 3.56% of my total costs.

May Stock Purchases     

Thanks to the healthy dose of overtime I was able to make many purchases in the month of May.  May marks another month of investing in beleaguered income investments.  While I would normally choose to place my money in stable dividend growth champions and aristocrats I could not ignore the prices of some of my favorite income stocks.  I have been rewarded with capital appreciation of ~15%  from my purchase of SDRL last month and hoped to continued the trend.  

I purchased 200 shares of PSEC at a price of $10.55 per share.  This increases my yearly forward dividend income by $264.96.  PSEC currently boasts a $0.1104 per month dividend.

I purchased 31 shares of GLPI at a price of $34.28 per share.  This increases my yearly forward dividend income by $64.48.  GLPI currently boasts a $0.52 per quarter dividend.

I purchased 112 shares of AWLCF at a price of $22.24 per share.  This increases my yearly forward dividend income by $515.20.  AWLCF currently pays a dividend of $1.15 quarterly.

This is a total increase of $844.64.  

The shares of PSEC were bought in two transactions.  The first occurring the day before a 5% drop in share prices due to the announcement by the SEC.  Shares are now down significantly to the $10.00 range.  While I still like the company there are some important factors that need to be addressed before I will purchase more.  I am currently less worried about the SEC investigation and squeeze on the BDC market overall from de-listing from major indices than I am about PSEC's ability to continue dividend coverage.

GLPI marks my first REIT purchase and exposes me to both the REIT and gaming industries.

AWLCF is my favorite offshore drilling play on the market at this time.  The company pays the vast majority of its income from its two rigs out as dividends.  This is quite possibly the most risky and intriguing play in my portfolio.  The dividend is currently sitting over 20% and would absolutely be unsustainable if anything disastrous were to happen to either of the rigs.  Currently both of the rigs are contracted out and receiving increased dayrates in the near future.  I am under the opinion that AWLCF greatly benefits in the current tight offshore drilling market by having only two rigs, making it easier to secure contracts and maintain efficiency.

May Dividend Increases 

Two positions in my portfolio increased dividends in May.

SDRL increased it's dividend from $0.98 to $1.00  this increase of ~2% marks the fifth quarterly increase in a row for the company.  Shares of SDRL have also rebounded greatly in the last month and a half.

AWLCF increased its dividend from $1.10 to $1.15.  This marks the third time that AWLCF has raised its income in the last year and is an increase of ~4.5%.

With these new purchases and dividend increases my current yearly forward dividend income is now $1799.37.

When I get access to internet on my personal PC again updates should return to the normal rate and I will update my portfolio page.  Hopefully you all had a fantastic May!

My current watch list for June purchases:  NAT, GM, VZ, RIG

Disclosure:  Long AWLCF, GLPI, PSEC

April Spending Report 2014

With April come and gone It is time to report my monthly spending.  These spending reports are one of my favorite segments because they help keep me honest.  Any time I start to think about making an unnecessary purchase I remember that at the start of each new month I have to air it out for everyone to see and I risk missing my monthly goal of spending less than $2,200.

For the month of April I spent a total of $1868.76.  This beats my goal  and is my second lowest month of spending so far this year.  Right now February came in at $5 cheaper (Darn Subway sandwich).  I am absolutely ecstatic with this amount and hope to be able to continue the run going forward.  My spending breakdown (courtesy of Mint) is as follows:

Major notable differences include:

• The utilities category where I managed to only spend $256.81, this includes heat/power/cell phone/internet service.  This has been decreased by switching from my $55 verizon plan to a $12 per month Republic Wireless plan which was also a significant boost in quality of service.  The coming of spring has also helped to knock down my heating bill significantly.

• I also switched car insurance companies to a company called Metro Mile which provides deeply discounted car insurance based on how much (or in my case how little) you drive.  As you can see I didn't get out and drive much this month (working 90 hour weeks will do that to you).  With this change I am saving ~$20 per month.  I am about a 5 minute walk from my office/groceries so that really cuts down on my monthly commute expenses.  At this point the only reason I maintain a car is for the occasional camping/hiking/paddle boarding adventure.  

• I spent slightly more money this month on entertainment and bought my pet parrot a treat.  

• Misc expenses include the cost of filing my state taxes.

This morning I finished signing paperwork for the purchase of a new house.  This should knock about $170 off my monthly Home cost and will significantly decrease my heating costs in the near future.  The downside will be a few months of increased misc spending as I purchase necessary home items (insulation, curtains, furnace filters, lawn mower, etc.)

I hope you all had a fantastic April!

Chevron Gave me a Raise!

I would like to take a moment to thank Chevron Corp.  (CVX) for giving me a 7% raise this year.  Chevron has increased their dividends from $1.00 per share up to $1.07 per share.  This is one of those warm fuzzy moments that occur multiple times a year when you invest in strong dividend growth stocks.

I personally own 9 shares of Chevron so this raise will net me an extra $2.52 per year.  It doesn't seem like much but these raises add up tremendously year after year.  I plan on putting this money to good use in my future purchases.  So thank you Chevron for the extra cash, I will buy half a Subway sandwich in your honor.  My yearly dividends going forward have increased to $942.29

April Bonus Buy

After my Seadrill purchase I have been analyzing many other offshore drilling companies.  The sector has recently been beat up over fears that major oil companies are pulling back on ocean drilling operations.  After heavily researching the major players in this sector I have narrowed my search down to 4 target companies that I added to my watch list.  Earlier in this month I pulled the trigger on one of these companies picking up shares of Seadrill.  I still consider this sector a risky play however I also see great potential upside.  On Monday I made another purchase after delving through financials picking up 45 shares of Awilco drilling (AWLCF).

Awilco is a much smaller company than Seadrill operating two semi submersible drilling rigs.  The company operates out of the UK and trades on the Norwegian stock exchange.  Awilco chooses to pay out the majority of its profits in dividends currently paying out a 20.16% yield at the time of this writing.  With just two rigs, Awilco is a very risky play because damage caused by inclement weather or an accident could set back their profits in a big way.  Furthermore Awilco has scheduled maintenance on both of their rigs in 2016 which will put them each out of service for two months for upgrades (having worked in a shipyard I know how these things can drag out past the planned two months.)  With cash on hand, and the rigs contracted out for many years to come for increasing dayrates, Awilco should see a nice boost in profit next year.

With this purchase my forward yearly dividend has increased from $741.77 to  $939.77.  My portfolio has been updated to reflect this change.  Do not be surprised if I buy two more drillers for my next purchases, and remember that I am extremely tolerant to risk. Remember to read my disclaimer before following me in any stock purchases.

Disclaimer:  Long SDRL, AWLCF

Kinder Morgan Boosts Dividends Again

Energy transportation giant Kinder Morgan (KMI) has announced a 1 cent increase in their quarterly dividend bringing the new quarterly dividend to $0.42 per share.  While this might not seem like much, this is not the first time in the last year that they have increased payouts.  Within the last year they have increased dividends from $0.38 to $0.40, and again from $0.40 to $ 0.41 and finally one last time from $0.41 to $0.42.  Three total increases in a one year period totaling ~10.5%  This continues the trend of multiple yearly dividend increases for Kinder Morgan.  

I am happy to be a shareholder in a company that is so dividend friendly.  Kinder Morgan was a more recent addition to my portfolio and I own a total of 45 shares.  This increase brings my 12 month forward dividends from $739.97 up to $741.77.  This is easily good for a few cookies per year from my local Subway which is truly life changing.  In reality every single penny increases the momentum of my portfolio and I always appreciate getting a raise for no effort.  My portfolio has been updated to reflect this change.

Disclaimer: Long KMI

April 2014 Stock Buy

A new month brings a new stock for the portfolio.  With the recent sell off in the market I decided that it was the perfect time to go bargain shopping.  One of the stocks that has been sitting on my watchlist dropped down below my target threshold today and I just had to make the move.  I set my alarm and woke up in the middle of my sleep period (I work nights) to make a quick market check and pick up shares of beleaguered offshore drilling MLP Seadrill (SDRL).  I spent a total of $1,428.56 and bought 43 shares at $32.99 a pop.

While this article is by no means meant for analysis I will give an extremely brief breakdown of why I picked this company.  Seadrill has been under fire lately as there is an expected lull in the deepsea drilling industry due to increased production from oil shale.  Seadrill also carries a large debt load and pays out the majority of its profits in its dividend.  But even with all of these issues the company still pulls in enough profit to pay its bills and maintain/grow the newest fleet of offshore rigs of any drilling company in the world.

It is my opinion that this position carries more risk and potential upside than any other position in my portfolio.  In the past 6 months shares of Seadrill have declined 27.66% and I don't know if they will continue to decline meaning I could be trying to catch a falling knife here.  As an engineer I analyze risks every single day and for me personally I am willing to assume the risk at this price point.

I look forward to writing more detailed articles once I have returned back to a more manageable work/life balance.

Seadrill's dividend is currently frozen at $0.98 per share which gives me a yield on cost of 11.88%.  Adding 43 shares I have increased my 12 month forward dividend by $168.56 of ordinary dividend income.  My new yearly dividend income sits at $739.85.  It is not yet half way through the year and I have now reached my original goal of having $700 in forward dividend income by the end of the year.  I am also well on my way to smash through the $900 adjusted goal that I came up with.  At this rate assuming a 3% yield on future investments I will need to invest just over $5,000 in the next 8 months to reach this rate.  My portfolio has been updated to reflect this new purchase.

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

                                                                                                                     -Warren Buffett

Disclaimer:  Long SDRL