Friday, August 1, 2014

Spending and Dividend Income July 2014


The numbers are in for July and another great month is in the books!  I think overall July was much more representative of what I will be spending going forward from here on out.  Over the last few months I have significantly cut expenses on my phone bill (Verizon to Republic Wireless), my rent (1050 per month to my now purchased home which costs 880 per month), and my student loans (122 per month down to 0 per month as work has picked up the tab for me).  So here are the new numbers:

There was a bit of a billing mix up this month and I was still charged for my student loan.  This is hopefully fixed for August and shouldn't happen again.  Other than that the only area of high spending was the Food and Dining category as I was a little lazier and purchased many breakfasts and lunches at work.  I have recently started going to the gym daily (free through work) and now need significantly more calories than I was eating before, it is likely that my food and dining expenses will be high from here on out as I am trying to gain a few more pounds of muscle.

This number is on track for my yearly goals and is less than my average monthly spending (Jan 1st - July 31st) of $1918.  Hopefully I can continue to bring this number down and finish the year strong.

Dividend Income:

The dividends just kept rolling in for the month of July.  While significantly lower than my June income I still managed a significant increase from my April income.  Dividends harvested this month include:

PSEC:    $33.14
SPLS:     $12.96
MO:       $19.20
PM:        $24.44
KO:        $7.93

Combining for a total dividend income of $97.67 dang so close to triple digits!  Compared to my April income 3 months ago this is an increase of almost 47%  Not bad at all!  This also brings my total dividends received up to $446.25 for 2014.

Total dividend coverage for the month was 5.54%  This was by far my second best month and it is exciting to see how quickly these numbers start adding up.  After just seven months of investing I was able to cover a good chunk of what it costs me to live.  The snowball is rolling now and it only picks up momentum from here on out.  I hope you all had a great July and here's to an even better August!  As always, thank you for reading.

Friday, July 25, 2014

You Sunk My Battleship, One Sale and Two New July Buys

Sometimes you just have to let go so that you can keep moving forward.  Earlier this week I sold out of my position in NAT.  This position was originally bought as a bet that the shipping industry was about to see a turnaround.  While I think the shipping industry is an interesting one at this time I felt like my position in NAT was a bit of a hot potato.  The company is well known for destroying shareholder equity by issuing shares and diluting value.  On one hand this is directly damaging to shareholders, on the other this allowed NAT to raise money without taking on debt, something which has helped the company immensely as the industry has tanked since the recession.  Similar shipping companies have not fared as well as the debt piled up and earnings fell.  Then there is always the ticking time bomb of China, whose shipyards are churning out more and more new ships which is leading to oversupply.

Overall I felt like I was stuck in a do loop, continuously analyzing this stock until I finally decided to take my profits and invest them elsewhere.  I sold 157 shares for a total of $1450.07 accepting an adjusted gain of just over 10%  Not bad for one month and definitely a learning experience for me.  This brings my total stock trading profit up to $432 for the year.

With this money, and some extra capital I initiated two new positions for my portfolio.  I ended up purchasing 22 shares of POPE (Pope Resources) for a total of $1501.59.  I also picked up 10 shares of BA (Boeing) for a total of $1252.49.  Boeing is one company that I have been interested in owning for a long time.  I took the recent sell off after earnings as an opportunity to initiate a position and it is one of those companies that I plan on holding long term.    After this portfolio reshuffling my 12 month forward dividends now sit at $2260.16 and I am sleeping significantly better at night.

Wednesday, July 16, 2014

June Spending, Dividend Income and a July Buy

It's looking like blog updates are going to be less frequent for the foreseeable future as my work hours are starting to pile up once again.  Overall June was my best month of the year for both dividend income and spending.  The numbers speak for themselves!

June Spending 

Total spending came in at a very low $849.81.  This is by far the best spending month I have had since I started this blog back in February.  The main reasons this number is so low has to do with the fact that my first mortgage payment wasn't due until July 1st so I had no rent or mortgage to pay in June.  June was also the first month that my work has started making my student loan payments.  This saves an additional $121 every single month which I will happily put to work earning me dividends.

My food and dining, shopping, and utility bills were higher than normal.  I had to pay utilities on two properties in June which propped up spending.  I also needed to buy a few household items to do some repairs/renovations on the new house.  I took friends out for dinner a few times and also bought groceries for a family barbecue which increases the food bill to slightly higher than normal.

June Dividend Income

The majority of my stocks have dividend distributions that occur in June.  As such it was by far my biggest dividend haul to date.  Dividend payments were as follows:

AWLCF: $50.51
INTC:      $10.13
CVX:       $9.63
TGT:        $7.74
MCD:      $8.91
PSEC:      $33.13
SDRL:      $43.00
GLPI:       $16.12

The total haul for the month of June was $179.17  When compared to last quarters March dividend income of $46.82 we have an increase of over 382%  I couldn't be happier with the increase which is mostly attributed to the fact that almost all of my high yield income investments pay out in this time period.  This brings my total dividends received in my first 6 months of investing up to $348.58.

Total dividend coverage for the month of June was 21.08% That little sliver of dividend income has had its first very noticeable month.  This is mainly due to the supplementation of my dividend growth stocks with high income investments.  My ideal portfolio at this time is an equal combination of dividend growth and income investments.  The higher yield income investments typically carry higher risk in particular risk to dividend distributions/increases due to very high, sometimes greater than 100% payout ratios.  There is a very real possibility of a poor quarter causing a dividend decrease.

 I carefully monitor these higher yield investments and consider all of these positions as possible trades.  I will typically pick up higher yield positions in industries that have seen hard times.  For example SDRL and AWLCF (offshore drilling) which has been rallying nicely for the last few months after a severe decline.  NAT (shipping) which is an industry that has still not recovered well since the financial crises.  However indicative rates (how much it costs to contract out an oil tanker) have risen substantially in the last few weeks causing the stock to bounce nicely (might sell soon).  Conversely my dividend growth positions I plan on holding and allowing the distributions to grow long term.  They are my SWAN (sleep well at night) investments that require significantly less attention and preening.

July Stock Buy

Earlier this month I picked up 59 shares of CVRR for a price of $25.69 per share for a total investment of $1525.69.  My new 12 month forward dividend income sits at $2,316.4 with this purchase.  This is another high income play for me that pays out the majority of its free cash flow in dividends.  A risky play similar to my purchase of AWLCF, CVRR owns and operates two refineries.  The company is currently recovering from difficulties at one of their refineries last year which caused a major decrease in income/company value.

Currently considering for my second July purchase:
RY, WFC or TD  (I keep wanting to buy a financial but the prices keep rising.  I like each of these companies and might just pull the trigger regardless instead of missing the bus)
NORSB:  illiquid microcap great analysis here:
GE, RTN, LMT, AGU, POT (still need to do more analysis.)
Also closely monitoring the merger of RAI and LO for a buying opportunity.

Considering selling my position in NAT

Thanks for reading folks!

Tuesday, June 24, 2014

June 2014 Bonus Buy

It's time to put my income to work again with a duo of bonus buys for June.  Earlier in the month I picked up shares of VZ and NAT.  Since then I have been putting in my time researching the next place I want to unload a pile of cash.  I have also been working on coming up with a mathematical formula to help me assign scores/multipliers to dividend paying/growth stocks and populating a database with basic statistics to test the formula.  While I am still far from perfecting the process I did use the formula to single out my two buys this month.

For my first purchase I bought 30 shares of TGT at 58.09 per share for a total of $1762.69.  Target has been struggling recently with multiple management changes, a major security breach, and poor performance in its Canadian expansion.  While these are real issues (particularly the failures in Canada) they are somewhat reflected in the low price of Target stock.  If the new Canadian leadership can bail out this sinking ship Target is set for a major rally, if not there will be more blood-loss.

Shares of Target recently saw a dividend raise of 21% which is in line with their excellent history of being very generous with dividend raises.  This increases Target's payout ratio to 56% however future dividends could be in jeopardy if things do not improve.  Sounds like my cup of tea!

For my second purchase I bought 108 shares of SPLS at $11.14 per share for a total price of $1213.11.  Yuck another beleaguered retailer?  Well not so fast, Staples has been cutting costs recently by closing unprofitable brick and mortar stores around the country while ramping up their online operations. Staples is now the third largest global online retailer after Amazon and Apple.  Staples has an incredibly low debt and excellent free cash flow.  The dividend is secure and has seen steady admirable growth over the last five years.  Major insider buying is also another positive sign.

With these two purchases and the raise from target my yearly dividend income has increased from $1964.4 to $2085.12

Wednesday, June 11, 2014

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!

Friday, May 30, 2014

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

Friday, May 9, 2014

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!