Since my last update, I’ve made significant changes to my portfolio. I sold out of 7 positions
and had my largest buying period in this channel’s history. Throughout this video, I’ll be
explaining the logic behind all my transactions and sharing the 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 thank everyone who’s subscribed to the channel so far. We recently passed
50,000 subscribers and it’s a pretty big milestone. The channel’s been growing faster
than I expected and I’m glad so many people find value in my videos. Also, I’d like
to let everyone know that you can support the channel over at Patreon.com/DividendData.
Currently, you can gain access to a community discord server for $1 a month. I chat there
frequently and try to answer viewer questions. At the $5 tier, you can get a spreadsheet
that contains my entire stock portfolio.Overtime, additional perks will be added as well. When
you support on patreon, you are in a way a shareholder in the channel. This will help
fuel growth and allow me to produce more content in the future. With that said, let’s dive
into the portfolio. This table shows that since May 2020 I’ve
gone from $32,939.66 to $45,610.30 dollars invested. During this same time frame, we
can see that my dividend yield on cost increased from 4.58% to 5.3% and my compound dividend
yield increased from 4.61% to 5.47%. This decreased from the previous month, due to
many of my newer purchases having a lower yield. Also, since I sold out of 7 holdings
this of course altered the portfolio as well. The differential between the dividend yield
and compounded dividend yield stayed at .17%. 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 overtime. My current value is $57,009.03. This has risen
with the market over the past few months and it’s now a 24.5% 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 December, I received $274.22 in dividends. In January, I earned
$93.33 in dividends. In February so far, I’ve earned $189.12. I’m expected to earn $17
more dollars this month from WellTower so my February total should be $206.12 by month's
end. Based on that, this brings my 3 month rolling average of dividend income to $191.22.
Here you can see my cost allocation by sector. This has changed significantly since my last
update due to the new purchases and positions sold. Stay tuned because I’ll be going over
those changes in detail shortly. Consumer Defensive is now my highest sector at 22.1%,
followed by Energy at 21.7%, Communication Services at 19.5%, Real Estate at 11.9%, Healthcare
at 5.88%, and so on. If we compare this to the cost allocation from my last update then
the changes become more obvious. Consumer Defensive went from 12% to 22.1%. Also, the
financial services sector is gone completely. Now let’s see the transactions that caused
these changes. I sold out of 7 positions, totaling $6,022.51. This was $1,736.10 in
profit, which is a 28.8% return on investment. Some were short term capital gains and others
were long term. I sold UVV, which amounted to $531.69, IBM for $649.67, Leidos for $540.13,
Invesco for $1,692.56, Dow Chemical for $481.74, Ben for $1,135.47, and Nucor for $991.25.
My reasons for selling out of these positions were diverse. In some cases, I didn’t fully
understand the company's business, making me not have a good gauge on predicting their
future success. In others, I didn’t think the businesses had any kind of economic moat
or competitive advantages. Finally, some of the stocks had declining financials where
I thought dividend growth would be minimal or unsustainable.
When starting my dividend portfolio, I was far too loose with buying stocks that I hadn’t
done enough research on, only buying them because they were a dividend aristocrat and
at a good value. As I gained more experience, I realized that I only want to be in stocks
where I understand and believe in the underlying business. The whole purpose of this portfolio
is to build a reliable and growing stream of dividend income. I want companies that
will be around a long time, where I can reinvest my dividends and see a significant compounding
effect. So what I’m looking for is companies that I feel comfortable holding forever. These
businesses typically have economic moats or competitive advantages that will allow them
to sustain and grow well into the future. Some of my early buys didn’t fit this criteria,
so I’ve slowly curated my portfolio and sold some positions. I want to make sure that
I can understand all the businesses I’m invested in and give detailed reasons as to
why I want them in my portfolio. A simple portfolio is the best portfolio. Going forward,
I expect I’ll condense my portfolio even more into stocks I identify as my core holdings.
I actually have 3 more stocks I’m looking to sell, but I’m waiting till they hit the
long term capital gains mark. This will bring my dividend portfolio to 25 holdings.
Alright now let’s get into all my recent buys. Since the last update, I’ve invested
a total of $7,771.15, which is my largest month of buying on the channel thus far. I
bought 3 shares of Apple at an average cost of $129.91, giving it a 0.63% starting dividend
yield. This stock is not the best value at the moment, especially from the dividend perspective,
but it’s a company I’m looking to make into a top holding. It has a huge moat from
it’s brand and product ecosystem, which I discussed heavily in my Apple stock review.
Additionally it’s financials are growing steadily and there is plenty of room to grow
the dividend overtime. I purchased 1 share of Microsoft at $212.45, giving it a 1.05%
starting dividend yield. Similar to Apple, this is a company I want to build as a core
part of the portfolio. I just did a stock review on Microsoft which will give you every
reason as to why I’m looking to buy this stock. I bought 5 shares of Disney at an average
cost of $166.61. Disney is one of the stocks I’m most bullish on and want to make a core
part of the portfolio. Their media brands create a giant economic moat and Disney+ will
be a cash cow for the company. With their Parks and Merchandise, they monetize entertainment
content better than anyone. I made a Disney stock review if you want to hear more of my
analysis. The Disney dividend is currently suspended due the park closures, but I expect
in the near future they will start their dividend again. They’ve been a historical dividend
payer and once their business fully recovers from shutdowns then I see it as highly unlikely
they won’t bring it back. Apple, Microsoft, and Disney are 3 of the highest quality companies
I’ve analyzed and I want to make sure they become core positions of mine. It’s for
this reason I’ve been dollar cost averaging into these stocks, even though they may not
be the best value. I bought 21 shares of Kimbrely Clark at an
average cost of $131.91, giving it a 3.46% starting dividend yield. This is a newer position
of mine, but one that fits my long term focused criteria. They make many popular brands like
Kleenex, Scotts, Cotenelle, Kotex, Huggies, and Pull-Ups. Recently, the stock has been
at some of lowest prices in a year, despite just posting excellent financials in 2020
and it’s most recent quarter. They just increased their dividend 6.5% and announced
a large share repurchase program. You can buy their stock at one of the highest starting
dividend yields over the last few years, other than in 2018 where the yield was in the high
3%’s. Kimbrely Clark will likely be the next stock review video I do.
I bought 35 shares of Altria Group at an average cost of $41.11, giving it a 8.37% starting
dividend yield. I recently made a stock review on MO, which you should watch for additional
reasoning on my purchase. I bought 7 shares of PepsiCo at an average cost of $135.87,
giving it a 3.01% starting dividend yield. I made a stock review on this previously and
think it’s a great long term holding. Based on the last 5 years, any time you can get
PEP over a 3% yield is a good value from the dividend perspective. I bought 15 more shares
of AT&T at an average cost of $28.49, giving it a 7.3% dividend yield. I bought 4 shares
of Realty Income at an average cost of $57.60, giving it a 4.88% dividend yield. I bought
4 shares of The Coca Cola Company at an average cost of $48.24, giving it a 3.4% starting
dividend yield. Similar to PepsiCo, this is a long term holding of mine and historically
mid 3%’s is a good starting yield. I bought 6 shares of Kroger at an average cost of $31.61,
giving it a 2.28% starting dividend yield. This is one I’ve been wanting to load up
on, but the price went up as soon as I started buying. Plus, it was recently announced that
Warren Buffett increased his stake in Kroger over the past quarter. Great minds think alike.
Except he actually got some. So hopefully I can get this in the low 30’s again soon.
Expect a Kroger stock review video over the next month. Finally, I bought 2 shares of
Consolidated Edison at an average cost of $67.58, giving it a 4.59% starting dividend
yield. So that wraps up the current state of my long
term dividend stock portfolio. Be sure to let me know in the comments which of these
companies you're most interested in hearing more about.
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 where I’ve been posting frequently. 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!