In June, I had my largest amount of dividend income so far. Also, I invested around $2,000
in new dividend stocks, with one of them being quite controversial. That’s right, I doubled
down and added to my AT&T position. So throughout this video, I’ll explain exactly why I bought
more AT&T and of course update you on the overall progress of my long-term dividend
stock portfolio. 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.
With that said, let’s dive into the numbers. Since May 2020, I’ve gone from $32,939 to
$63,908 dollars invested. My current dividend yield on cost is 4.3% and my compounded yield,
which takes in the effect of reinvested dividends, is 4.49%. 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 $82,113.36. This has continued
to rise with the market, which is nice, but remember value is volatile and the main goal
of this portfolio is to build a source of growing earnings and dividend income for the
long term. In this next chart, you can see my earned
dividends to date. In June, I earned $295.39 in dividend income. This was my highest month
yet! It’s honestly pretty enjoyable to watch the dividends roll in. I got $125.91 from
ExxonMobil, $27.64 from 3M, $25.37 from Chevron, $20.63 from PepsiCo, $10.99 from Kroger, and
much more. I reinvest these dividends to increase my future dividend payouts, adding to the
snowball effect. However, the best part about dividend growth investing is that companies
will increase their dividend payouts over time. For example, Kroger just had a 17% dividend
increase. That’s Huge! Here you can see my cost allocation by sector.
Consumer Defensive is my largest at 25.8%, followed by Communication Services at 22.6%,
Technology at 14.6%, and Energy at 14.6%. Not much has changed here since my last update,
except a slight increase in my 2 largest sectors. All my recent buys were adding to existing
positions at what I thought was a good value. I purchased 6 shares of Kimberly Clark at
an average cost of $128.91, giving me a 3.54% yield on cost. I bought 25 shares of AT&T
at an average cost of $28.49, giving me a 7.3% yield on cost. Finally, I bought 10 shares
of Altria Group at $46.93, giving me a 7.33% yield on cost. If you want to hear more about
my investment thesis for these stocks then you should check out my stock review videos
on each company. Both my Kimberly Clark and Altria videos give great context and are still
very relevant. Now let’s discuss the elephant in the room,
AT&T. For those of you who don’t know, the company recently announced a gigantic move
to spin off WarnerMedia and merge it with Discovery. We now know that the new company
will be named Warner Bros. Discovery. This deal is expected to go through in mid-2022
and AT&T’s shareholders will receive stock representing 71% of the new company. I made
a heavily detailed video explaining the entire deal and my initial thoughts on it. So you
should definitely check that out if you want more details.
The main problem people had with this news is that AT&T subtly announced they would be
reducing their dividend payout after the deal goes through in 2022. This made many investors
angry since that was their primary reason for investing in the company. Also, management
had just said after Q1 earnings that the dividend was safe. So after the news, many people sold
and the stock price decreased. Recently, I put out a poll to see what my
audience did with the stock. 5.1 thousand people responded with 23% saying they sold,
36% holding, 10% bought more, and 30% never owned it, to begin with. The common thread
among negative comments was that they lost trust in the management. While I get that,
I can’t help but think that the companies are both way better off after the deal.
AT&T is now more focused on the communication business, with decreased debt, and an increased
ability to invest in future growth. Warner Bros Discovery is a much stronger media company
when combined and has an improved shot to compete with the big dogs Netflix and Disney.
Honestly, I should probably buy way more if it keeps going down. Over the long term, I
see this deal as value creation. The only negative I see is the dividend cut, but that’s
not a deal-breaker for me. 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 dividend data. You can support the channel
over on Patreon, where you can gain access to a community discord server. The link is
in the description. Please leave a comment below and thank you for watching!