This past month, the stock market has boomed upward led by large cap tech stocks.
My dividend portfolio has now reached an all time high in value.
These gains were mainly from 2 of my largest tech stocks: Microsoft and Broadcom.
Microsoft is up nearly 8%.
Broadcom is up over 28%.
This sudden growth is influenced by a larger AI investment trend taking over the market.
The best example of this is Nvidia stock which is up 37% in the month and over 174% to start
the year.
While Artificial Intelligence and its productivity impacts are very real, some of the stocks
may be getting far ahead of themselves on valuation.
The AI bubble may be here, but that’s a topic for another video.
(Patrick Star Bubble Pop) Today, I want to share the stocks I personally
bought in the month.
This includes 3 companies with a history of reliable dividend growth.
One of these is high-yield and lower growth, One is a mid yield with slightly more growth,
and the one is low-yield with very high growth.
On top of discussing my new buys, I will provide an updated analysis of my full long-term dividend
growth stock portfolio.
Let’s roll the intro.
(intro vid)
My name is Zach, this is Dividend Data, and should leave a like and subscribe if you enjoy
the video.
Throughout, I’ll be using my stock research tool, which is available at DividendData.com.
Here you can track your investment portfolios and get custom analytics for the dividend-focused
investor.
On top of this, you gain access to deep financial research for over 8,000 stocks on the NYSE,
NASDAQ, and AMEX.
The tool shows every key financial metric, displayed with detailed charts and tables,
as well as calculated growth rates.
If the software helps you identify just 1 slightly better stock, then it pays for itself.
If you like what you see, sign up at dividenddata.com.
Link in the description and pinned comment.
Now let’s dive into my portfolio.
The current total value is $125,884.
With $97,185 dollars invested, my total return is 29.53%.
My top stock is Microsoft, ticker symbol MSFT.
The overwhelming majority of my position was added in fall 2022.
Recent gains have boosted my total return to 38.81%.
I view Microsoft as one of core holdings and will likely add the next time there is a sizable
decline.
This is followed by ExxonMobil, which has a 196% total return.
Disney is my worst performing stock, with a -38% total return.
I definitely overpaid, but think the company is improving and will have strong returns
from its current position.
Other notable changes in my portfolio are with Broadcom, ticker symbol AVGO.
This was one of my largest stock buys in early 2023.
Now I am up over 41% on my Broadcom stock.
Obviously, I wish I had bought more.
It may be a while before I can get a good buying opportunity again.
If you want to get a full analysis on each of my individual stocks, check out one of
my newest videos titled: Ranking My BEST Dividend Stocks.
In it, I analyze the current status of each business and rank them against each other.
Highly recommend you try that out.
Overall, I have 13 total stocks in my dividend portfolio.
Microsoft is my largest by current value at 26.9%.
This helps make technology my largest sector at $56k.
This is followed by Energy, Consumer Defensive, Financial services, and finally communication
services.
This diversification can and will change overtime, as I continue to learn and find new investments.
My projected annual dividend income is $3,441.
That is $860 quarterly, $286 monthly, $9.43 daily, or $0.39 hourly.
This is passive dividend income paid out to me by my stocks.
Since all my stocks pay dividends quarterly, they operate in 3 month cycles.
June is my largest month, projected at $450.41.
This is followed by July at $304.37, and finally August at $105.69.
Here you can see a projected calendar, showing the individual stocks making up each month.
You can also see the diversification of my projected dividend income.
Altria is my largest dividend payer at $1,217 in projected annual dividends.
This is 35.37% of my total projected dividends.
Here you can see that dividend yield makes a big difference.
On the Dividend Insights page, you can see that with Altria stock I have an 8.63% dividend
yield on cost.
24.79 shares of my total shares are derived from dividend reinvestment.
We call these DRIP shares.
Reinvesting dividends has increased my yield by 0.72%.
This is called the snowball effect, which us dividend investors love.
This gives me a compounded yield on cost of 9.35%.
So for every $100 I initially invested in MO stock, I get paid $9.35 annually in dividends.
Also, the ability to DRIP shares and related stats is a unique service available on dividenddata.com.
Overall, My portfolio has a 3.29% yield on cost, boosted to 3.54% from reinvesting dividends.
On the upcoming dividends page, I can see all my declared dividends that will be paid
soon.
For example, I’ll get $68 from Microsoft, $143 from ExxonMobil, $100 from T Rowe Price,
and $304 from Altira.
On the Dividend History page, I can track all my earned dividends.
In total my portfolio has generated $8,816 in dividends.
In 2022, I earned $3,297.
So far in 2023, I’ve earned $1,303.
For the most part, these have been reinvested to acquire more shares, increasing my future
income.
After a lot of portfolio changes and a shift in focus to dividend growth, my dividend income
seems poised to grow well into the future.
My current 3-month rolling average of dividend income is $301.95.
So far in June, I’ve earned $7.7 from Visa and $21.88 from Kroger.
As I mentioned earlier, the rest of June has some big dividends coming my way.
Now let’s get to the topic of the day, the 3 dividend stocks I’m buying right now.
First, we have the Altria Group, ticker symbol MO.
I bought 15 shares at a cost per share of $44.55.
This is a total cost of $668.30.
The MO stock purchase will generate $56.40 in dividends with a 8.44% dividend yield.
Altria is my favorite high yield dividend stock and I will likely be adding more at
this price range.
The company has a reliable history of both earnings and dividend growth.
By the way the drop off in these charts is from the 2007 and 2008 spinoffs of both Kraft
foods and Philip Morris international.
Over the past 5 years, Altria’s dividend is growing at a 6% compound annual growth
rate.
Their CFO has said they target mid-single digits dividend growth.
This is sustainable based on their free cash flow.
In my opinion, Altria is a high certainty investment due to its reliable cash flows,
high dividend, and low valuation.
I find that the future projections are actually pretty easy to forecast.
This lets me feel confident to do a valuation calculation.
I’ll use the dividend discount model as an example.
This measures the value of a company by taking the sum of all future dividend payments and
discounting them compared to a provided discount rate.
If you want to follow along and try this calculator it’s available on dividenddata.com.
To start, I’ll enter the current share price of $45.33 and annual dividend of $3.76.
Then, I need to put a dividend growth rate projection.
I’m going to be conservative and enter a growth rate of 4%.
Additionally, I’ll put a discount rate of 10%.
This basically is measuring against a theoretical 10% return.
With these inputs, Altria is estimated to have a present value of $61.23 per share.
This makes the stock 25.97% undervalued.
This, along with my analysis into the business of Altria, give confidence to buy into the
stock at current prices.
The second dividend stock I bought is the T Rowe Price Group, ticker symbol TROW.
I bought 5 shares at a cost per share of $104.41.
This is a total cost of $522.
The TROW stock purchase will generate $24.40 with a 4.67% dividend yield.
This is another stock I feel very comfortable buying at these prices.
TROW stock has seen a 50% decline from it’s high.
Earnings have seen a slightly smaller, but sizable decline in this time.
The reason is that TROW is an investment manager who’s earnings largely come from fees on
assets under management.
Since the bear market started in late 2021, the value of the stocks in TROW’s AUM has
declined.
Additionally, more capital is being taken out than put into the market.
This is a core risk to understand.
However, I view this decline as a major buying opportunity with the assumption the stock
market will see long-term growth.
The company is still highly profitable and pays a growing dividend.
The 5 year dividend CAGR is 11.75%.
This has slowed during this time of decline, with the most recent increase being 1.67%.
The dividend payout ratio is still very sustainable.
On top of this, TROW stock has a rock solid balance sheet.
They have $2 billion in cash on hand with only $300 million in total debt.
With a very low expense business model, TROW is poised to rake in cash when the market
rebounds.
They are even healthy during this poor market.
Long-term, I think dividend growth will likely return to high levels.
Additionally, TROW has a history of issuing large special dividends when they have excess
cash.
This practice will likely continue during the next bull market.
At current prices, I view TROW stock as a great deal and a dividend growth machine.
The third stock I bought was Visa, ticker symbol V. I bought 1 share at $217.55.
The purchase will generate $1.80 at a 0.83% dividend yield.
Visa is the leading digital payment network and a money printing machine.
They have low expenses with 80% gross margins and 50% net margins.
Free cash flow per share is growing at a 19.6% ten year CAGR.
This fuels consistent share buybacks and a fast growing dividend.
The 10 year dividend CAGR is 18.49%.
The most recent increase was a massive 20%.
The payout ratio is very sustainable at 20%.
Visa is such a great business and will likely continue adding more around these prices.
Those were the 3 dividend stocks I bought during the last month.
However, I also bought 5 shares of Disney at $89.47.
They currently have their dividend suspended and announced a plan the reintroduce it in
late 2023.
Disney is my worst performing stock, but I wanted to lower my cost basis.
I think it’s actually a solid value at these prices.
If you want to know my updated thoughts on Disney stock, check out my recent video where
I rank all of my stocks.
That will be linked at the end of the video.
If you liked this analysis, make sure to subscribe as I post these portfolio updates every single
month.
You can sign up for DividendData.com to track your portfolio and research stocks just like
me.
There you will gain access to the exact tool I used throughout the video.
If the software helps you identify just 1 slightly better stock, then it pays for itself.
Thanks for watching!