Category: Dividend Analysis

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Dividend Analysis

Huge Surprise Dividend Increase!

This morning when I woke up, I didn’t think there would be any more surprises this October. I check my phone to see where the market is pre-market and I remembered that there were some earnings reports being released today. Come to find out that one of the stocks that I’ve been holding onto has increased their dividend by over 10%! They had a very good quarter based on their earnings report and they were able to raise the dividend because of it.

$ABBV is the company that I’m so fond of as of this moment. They already had a great yield of over 5.5% and now with this dividend increase from $1.18 to $1.30, their yield is almost reaching 6.5%! Their payout ratio is still between 40-60% which means their growing dividend is safe in my opinion.

They were able to raise their dividend because of their other financial metrics highlighted in the earnings report. Their revenue has increase 52.1% from last year which was higher than expected. Their earnings per share (EPS) was $0.06 higher than expected as well. With $ABBV being a health care company that deals with pharmaceuticals, it’s no wonder why they’ve done so well during the pandemic.

With the current political landscape, they have no reason to be doing badly for the upcoming years. Although, if we had a candidate who was fighting for a universal healthcare system, drug prices would be lowered and companies like $ABBV would suffer from it. But I think we’re a long ways away from that and until that day comes, my portfolio will just keeping reaping the rewards that they give me.

I just wanted to share my thoughts about this morning and the surprise I found for my portfolio! As always, thank you so much for reading the blog and I’ll catch you on the next one!

Marcus

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Dividend Analysis

Markets are Slipping: Is It Time to Panic?

Many new investors out there aren’t sure how to handle the recent drop in the markets. Since October 12, the DOW has been down 6.27% as of the writing of this post. The S&P 500 has been down 5.69% over the same time span. If you’re new to investing and haven’t experienced a drop yet, you might be panicking because your small account has constantly been losing money over the past 2 weeks.

I’m here to tell you to not panic!

Think of the markets as a roller coaster. There will be ups and downs, twists and turns. It’s up to you to stay disciplined and to not panic. If you consider the market as a literal market, you want to buy items that are on sale right? That’s the way I think about dips in the market. All of my favorite items are on sale! It’s not like one or two of my investments are down because they’re bad investments, the entire market is down so I have nothing to worry about. If anything, I think of it as an opportunity.

I’m 27 and still have decades of investing to do before I officially retire. So averaging down for my portfolio is great for me. For those who are close to retirement, this might not be the case. But for most of you new investors out there, this is an opportunity. The market as a whole is consistently upward trending.

If you take a look at the chart above, you’ll see that throughout the span of 90 years, there is an upward trend. The Great Recession was an awful event that devastated millions of families, but if you look at the market, the economy recovered and skyrocketed even higher than it was before.

If you stayed in the market and bought at the low in 2009, for the past 12 years, your wealth would have grown by 338%! I’m not saying that this is what is currently happening, I mean it might because of the pandemic, but it might not.

The moral of the story is that you don’t want to get off the roller coaster while it’s going because that’s when you get hurt. Investing in the market regardless of if it’s down or not is something that seasoned investors do. While you can’t time the market, you can utilize dollar cost averaging at any time.

I hope after reading the post, you settle down and make a decision not out of panic, but out of careful consideration. You will experience downturns in the market and if you’ve been in it for any considerable length of time, you’ll definitely feel market slides. Although it might be tough to stay in and not panic, getting out at the bottom is the worst thing you can do for your finances.

I’ll end on that note for this post and I hope you enjoyed reading about the stock market dips that we are currently experiencing. Thank you so much for reading and I’ll catch you on the next one!

Marcus

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Dividend Analysis

Why I’m Quacking for Aflac

As a dividend investor, I’m constantly looking for new opportunities and dividends to invest in. This time, my digging has brought me to a company that’s been around for over half a century. It’s an insurance company that has a solid and consistent track record and after being on my radar for some time now, I’ve finally decided to take a position in it.

In my next batch of purchases, I will be investing in the most annoying duck that has ever been on commercials… Aflac.

Like I said before, this company deals with insurance and right now, people need insurance more than ever. With the current political landscape, our healthcare system isn’t going to be upended anytime soon contrary to what some news outlets might think. But taking the politics out of the equation, let’s look at the financials to see what makes Aflac such an attractive buy as a Dividend Aristocrat.

FINANCIALS

With a current share price of $36.58, Aflac is an easy investment to grab shares in. It currently offers a strong yield of 3.05% and it gives investors a quarterly dividend of $0.28 per share. What I really enjoy with this investment is the fact that it’s a Dividend Aristocrat. It has been consistent in growing it’s dividend for the past 38 years! With a 10 year growth rate of 6.79% Aflac really values the dividends it pays out to investors and it’s growth is very important to them.

What is even more stunning is how safe the dividend is. It’s current Payout Ratio is an incredible 23.88% While normally, I value companies that are within the 40-60% range, this company has shown that it is very consistent in the dividend growth and to a dividend investor like myself, this is a perfect opportunity to get into.

To top it all off, it’s current Price to Earnings Ratio is 9.46! This is just further proof that this dividend is so safe, that they have plenty of room to grow it more in the future and every increase in the dividend for an investor like me is essentially just a raise in the income I receive every quarter.

Conclusion

So there you have it. A Dividend Aristocrat such as Aflac has been on my radar ever since I started this journey 3 months ago. After all the research that I’ve done myself along with other blogs that I’ve read on the company, I feel like Aflac is going to be a terrific addition for my personal portfolio. I haven’t purchased shares yet, but will be doing so at the end of the month and I will be updating my portfolio when I do.

Thank you so much for reading my take on Aflac. I hope you found it informative so you can have a starting point if you want to research this company. I’m ending this post on that note and I’ll catch you on the next one!

Marcus

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Dividend Analysis

My Dividend Investing Strategy

The great Warren Buffet has said, “If you like spending six to eight hours per week working on investments, do it. If you don’t, then dollar-cost average into index funds.”

This is exactly the situation I find myself in week after week. I’m a complete nerd when it comes to trying to find the right dividend stocks to fuel my portfolio because I view it as a type of wealth puzzle to solve. Meanwhile, my wife couldn’t care less about it, but she trusts me with paying taxes, mortgage, and essentially everything that has to do with money for us. The strategy that I’ll explain to you isn’t one that’s revolutionary or ground-breaking. It’s one that works for us and one that we feel safe in investing in. So without further ado, here it is…

For our retirement accounts, we are invested in well diversified mutual funds that will grow over time since they’re actively managed. For our taxable investment account, I have us in 17 holdings as of the writing of this post. My holdings are all dividend stocks that I can rely on every month or quarter to grow and to be reinvested. I invest $1,000 per month into our portfolio and I buy stocks whenever I find a great value to take advantage of.

That’s all there is to it. I don’t invest in companies that don’t pay a dividend. Which means to all you Tesla bulls out there, I’m not interested. The reason for this is to have our money work for us without having to worry about the overall picture of the stock market. I want to invest in companies that will pay me back just for investing with them because it’s the easiest source of passive income, you literally do nothing but hold your investments and you’ll get income from it.

Ultimately, years down the road, our goal is to be able to retire much earlier than 60 and live off the dividends our portfolio pays us every month or quarter while still growing our account. That is achieving FIRE for us.

For those of you who are new to the blog and new to dividend investing, I’ll give you an example. Let’s take Pfizer which is ticker symbol $PFE. As of the writing of this post, it is trading at $37.79. It has a quarterly dividend payment of $0.38 per share. This means that for every share that you own of $PFE, the company will pay you $0.38 since you are a shareholder in their company. If you own 10 shares, this means every quarter Pfizer will pay you $3.80. This may not seem like a lot, but you can reinvest that money back into $PFE and buy fractional shares with it so then it can compound the next time they pay out a dividend and so on, and so on.

I want to take advantage of the extreme compounding that dividend investing has to offer so my portfolio can grow at a higher rate. There are many different metrics to look at when it comes to finding the right dividend companies to invest in. Numbers like the P/E Ratio, Dividend Yield, Payout Ratio, and Free Cash Flow are very important to determining which companies to invest in and I will be going into depth on each of those in the future.

If you want an investment strategy to just set it and forget it, I refer you back to the Warren Buffet article back at the top of the post. There is nothing wrong with investing in index funds. They are very safe and are fairly consistent with slow but steady growth over long periods of time. There are plenty of people around the world who have done very well just sticking to safe index funds. But I thoroughly enjoy investing and love to actively do research on dividend companies. And hey, it’s a better hobby than collecting expensive cars or buying a bunch of useless crap I don’t need!

With this section of the blog, I’m going to update my portfolio and let you know which stocks I have chosen to invest in when I buy more. I’ll walk you through my thought process to help educate you on what I look for. I’ll also be sharing my progress with the portfolio and share my plans for the future as well as celebrating important milestones.

I’ll wrap this post up there, so with that being said, I really appreciate you following along with the blog and I’ll catch you on the next one!

Marcus