This month’s portfolio update is going to be a little different. Today, I’m going
to share my top 5 dividend stocks by current value. This includes my investment thesis,
cost basis, dividend yield, and where I think it will go from here. But don’t worry, I’ll
still give you an update on my entire portfolio’s performance and all my recent buys. So let’s
roll the intro.
My name is Zach and you should leave a like and subscribe to the channel if you enjoy
the video. Before we start the analysis, I’d like to let you know that you can join a community
discord server and gain access to a spreadsheet showing my full portfolio if you support the
channel over on Patreon. Link in the description. Future perks are currently in development,
more news on that later. With that said, let’s dive into the numbers.
Since May 2020, I’ve gone from $32,929 to $55,282 dollars invested. My current dividend
yield on cost is 4.7% and my compounded yield, which takes in the effect of reinvested dividends,
is 4.89%. My portfolio yield has been decreasing for months since I’ve been focusing on investing
in some long term high quality dividend growth companies, which tend to have a lower starting
dividend yield. The differential between the dividend yield and compounded dividend yield
increased to .19%. This stat acts as a measurement of the snowball effect from dividend reinvestment.
In this chart, you can see how the value of my dividend portfolio has changed over time.
My current value is $71,580.39. This has continued to rise over the past few months and it’s
now a 29.48% return on dollars invested. However, value is volatile and the main goal of this
portfolio is to build a source of growing dividend income.
In this next chart, you can see my earned dividends to date. In April, I earned $175.08
in dividend income, which was a significant increase from January. January was the last
comparable month, since dividends typically come in quarterly cycles. Notable payments
included $55.21 from MO, $45.02 from FRT, and $37.62 from KMB. Based on that, this brings
my 3-month rolling average of dividend income to $218.75. I’m going to continue investing
heavily so this number will likely continue increasing. Also, I got 4 dividend raises
since my last update. Apple increased by 7.3%, Chevron by 3.8%, JNJ by 4.9%, and PepsiCo
by 5.1%. So even if I don’t invest my dividends are still growing as the companies increase
their dividend payouts overtime. Here you can see my cost allocation by sector.
Consumer Defensive is my largest at 27.5%, followed by Communication Services at 19.2%,
and Energy at 16.9%. Technology has continued growing and is now my fourth largest sector
at 10.5%. If you’ve been following my channel then you know this is something I’ve been
focusing on, since many of the highest quality companies are in this sector.
Since the last update, I’ve invested a total of $4,325.24. I bought 45 shares of Kroger
at an average cost of $36.23. I just posted my long awaited stock review on the company
and explained the logic behind this purchase in heavy detail. I will continue investing
in KR as the price goes down. I bought 6 shares of Kimberly Clark at an average cost of $129.79,
giving it a 3.51% starting dividend yield. I made a super in-depth review on this company
and it’s grown into one of my larger positions. Finally, I bought 3 companies which I try
to dollar cost average into every month. I bought 5 shares of Disney at an average cost
of $182.92. I bought 3 shares of Microsoft at an average cost of $248.40, which is a
0.9% starting dividend yield. I bought 2 shares of Apple at an average cost of $128.13, giving
it a 0.69% starting dividend yield. Apple and Microsoft just had blowout quarters with
incredible earnings. In my view, they are clearly the 2 best companies on earth. They
both pay dividends which will grow at high rates for decades to come. They both buyback
shares consistently and are internal compounding machines that consistently grow their earnings
overtime. Apple and Microsoft represent exactly what I look for in an investment and I wish
the price would drop so I could load up. I’ve made stock reviews on both these in the past.
Alright let’s get to the topic of the day, My top 5 dividend stocks by current value.
Now this is different from what I think are the top quality stocks. Instead, this represents
companies which I found to be a great value over the last year and went heavy on.
Number 1 is ExxonMobil at a current value of $8,566.10. My initial investment is $5,645.81,
which puts me at a 51.7% total return thus far. I have 144.72 total shares at an average
cost of $40.91, giving me a 8.5% starting dividend yield. I have already started to
take in massive dividend payments, shown by the $124.12 I received in March. I’ve reinventested
these dividends to acquire more shares. 6.72 of my total shares result from this process.
This reinvestment has brought my compounded dividend yield to 8.92%. So I’m receiving
nearly a 9% return on initial investment every year through dividends alone. This will only
continue to increase as I reinvest dividends and as ExxonMobil increases their dividend
payout overtime. Overall, I’d say this is by far the best investment in the short history
of this channel. I locked in a reliable and incredibly high starting dividend yield and
have potential to see massive capital gains over the next few years. The price of oil
will likely continue to rise for the foreseeable future, which will be highly profitable for
the company. The return from this investment is only just beginning to realize.
Number 2 on the list is AT&T at a current value of $7,308.71. My initial investment
is $6,212.01, which puts me at a 17.6% total return thus far. I have 228.25 total shares
at an average cost of $28.49, giving me a 7.3% starting dividend yield. Similar to Exxon,
this is already printing out dividends and I received $116.78 on May 3rd. Through dividend
reinvestment, I’ve already gained 10.25 new shares of AT&T, bringing my compounded
dividend yield to 7.64%. This will continue to increase through dividend reinvestment
and dividend raises. This investment into AT&T is just in the beginning phases of returns.
Not only will it continue to give a reliable and growing return on initial investment through
dividends, but it has the potential to see significant capital gains. The stock is still
lowly valued and I think their focus on streaming through HBO Max has the potential to create
growth down the line. I recently made a stock review on the company where I explained my
full position. Number 3 on the list is Disney at a current
value of $5,729.77. My initial investment is $4,225.14, which puts me at a 35.6% total
return so far. I have 31.09 total shares at an average cost of $136.29. Disney has suspended
their dividend since early 2020 because of the theme park and movie theater closures.
This represents a significant portion of their income lost. However, I expect once this is
all open and firing at full cylinder, which will be sometime this year, they will bring
the dividend back. Overall, my investment in Disney is very long term focused. I view
them as the highest quality entertainment company and think that Disney+ has the potential
to overtake Netflix as the largest streaming service. In a year and a half, Disney+ already
has over 100 million subscribers. This is just the beginning too. Disney Plus and their
other streaming services Hulu, ESPN+, and Star allow for a highly scalable and reliable
source of recurring revenue. This is all going to be growing on top of Disney’s existing
business, which was already reliably profitable. They know how to monetize media better than
anyone. Disney is going to be a cash generating machine over the coming decades. I’m expecting
a consistently growing dividend coupled with share buybacks. My current strategy is to
dollar cost average into the company every month, and buy heavily if there is ever a
significant price drop. I made a previous stock review on the company if you want to
check that out. Number 4 on the list is Kimberly Clark at
a current value of $5,695.19. My initial investment is $5,490.96, which puts me at 3.7% total
return. The return isn’t really relevant yet since this is one of my newer investments.
I have 42.27 total shares at an average cost of $130.73, giving me a 3.48% starting dividend
yield. I made an incredibly in depth stock review on the company where I lay out my investing
thesis. In short, it has a strong portfolio of consumer brands through Kleenex, Huggies,
Cottonelle, Scott, etc. I see most growth potential through expanding internationally,
but they should also look to expand margins overtime on domestic products. They are a
pretty boring company with reliable earnings. I expect consistent dividend growth and share
repurchases. Currently, they are seeing their stock fall due to concerns over commodity
inflation. This is a real short term concern which I addressed in a 4 part tweet. Perhaps,
another reason to follow me on twitter. Overall, I’ll only be buying Kimberly Clark if it’s
at a good value. Number 5 on the list is Federal Realty Investment
Trust at a current value of $4,829.43. My initial investment is $3,165.51, which puts
me at a 52.5% total return thus far. I have 42.9 total shares of FRT at an average cost
of $77.20, giving me a 5.49% starting dividend yield. I have earned 1.9 shares through dividend
reinvestment, which gives me a compounded yield of 5.74%. The company is one of the
highest quality REIT’s and has been growing their dividend for over 52 years. I’ve made
two videos on the company in the past. They invest and develop high quality shopping centers,
which are often outdoor and experience focused. They try to focus on areas with growing populations,
that are highly educated with large incomes. I bought a bunch of this company during the
height of the economic shutdown, shown by my low cost basis. I’m not looking to add
anymore to this position, as I don’t see the price dropping, so I’m just going to
let it ride. So those are my current top 5 dividend stocks:
ExxonMobil, AT&T, Disney, Kimberly Clark, and FRT. If you want to see my full portfolio
then support the channel on patreon so you can get access to the full spreadsheet, plus
a community discord server where we chat about dividend investing.
Thank you for watching Dividend Data. I’d greatly appreciate it if you leave a like
and subscribe to the channel. If you follow me on twitter, link in the description, you
can real-time updates of my buys and dividends coming in. Also, you can follow me on instagram
at dividenddata. Please leave a comment below and thank you for watching!