I have big plans for growing my dividend income portfolio of stocks over the next several years. The actions I took in February were small steps that will help me reach my short term goals for this year as well as longer range goals. I plan to earn over $500 in dividend income this calendar year.
I currently own 12 dividend paying stocks in my portfolio and plan to continue to grow my positions this year as the market allows. I added a new position in my portfolio this past month when I purchased shares of ConocoPhillips (COP), which I believed to be undervalued after reviewing the Graham Number on the stock. Here are my results for the past month -
Dividend Income Earned in February (2012)
I earned $25.26 in dividend income during February, which is up 123% from last month ($11.29). Since all of my income growth stocks pay dividends on a quarterly schedule, there are a lot of fluctuations from month to month. During February, 4 of the 12 dividend growth stocks I own paid a dividend which is reflected in my results.
- (PG) – $8.32
- (ABT) – $10.14
- (CLX) – $3.56
- (LOW) – $3.24
It is important to point out that all dividend payments received were automatically reinvested back into additional shares of stock using DRIP.
Since my monthly income varies each month, I like to track my 3 month rolling average of dividend payments. Over the past three months, I earned the following dividend income.
All of my stocks pay quarterly dividends, so tracking the 3 month rolling average is a good indicator of my growth each month. For February, my 3 month dividend income average rose to $25.11, up from $23.48 in January. That is a 6.9% increase, which was a result of new investments and DRIPs over the past several months.
New February Investments
During the month of February, I did not sell any stocks in my dividend portfolio. None of the 12 stocks that I own are on my SELL list right now. At this point in time, I am happy with all of my holdings and will continue to monitor each company throughout this year. In the event a stock in my portfolio cuts their dividend, I will likely sell my position at that time.
I made several new investments during the month of February. For starters, I increased my position in two of my current holdings by leveraging automatic investment plans. I had $100 directly invested in both Clorox (CLX) and Cincinnati Financial (CINF) through their direct stock purchase plans (just as I did last month). By setting up these automatic investment plans, I am able to dollar cost average into these stocks as I work to build a decent position in each.
Besides my monthly recurring investments, I also opened a new position in ConocoPhillips (COP). According to my Graham Number calculations, this company had been undervalued and an attractive buy during the month. Since my purchase, the price of these shares has gone up considerably.
Here are the additions I made this month to my dividend income portfolio -
- $100 automatic investment in Clorox (CLX) – 1.46 shares
- $100 automatic investment in Cincinnati Financial (CINF) – 2.78 shares
- $1,188.26 purchase of ConocoPhillips (COP) through broker – 17 shares
The net impact of these purchases will result in a additional $52.86 in annual income. While it is not a lot, these small purchases should add up overtime with additional investments and dividend reinvestment.
- Clorox (CLX) – $3.50
- Cincinnati Financial (CINF) – $4.48
- ConocoPhillips (COP) – $44.88
2012 Investment Outlook
My goal for 2012 is to double my annual dividend income from last year. During 2011, I earned around ~$250 in dividends and hope to expand that number to $500 in the new year. In order to reach this goal, I will need to invest at least $6,000 in new money into the market. In February, I invested $1,388.26, which puts me well on my way to this goal.
While I feel it is important to add new money into my portfolio, I need to be careful about not overspending to buy stocks.
How did your February dividend results turn out? What direction to you see the market heading in March?