Dividend investing is my favorite long-term investing strategy.
With it, you can build a compounding source of passive income.
That dividend income can be reinvested to acquire more shares, increasing your future
income, and eventually generating enough for you to live off of.
The true power of dividend investing is the snowball effect from dividend reinvestment.
In today’s video, I’m going to show my real measured dividend snowball effect and
provide an updated analysis on my long-term dividend growth stock portfolio.
(Intro Vid)
My name is Zach and you should leave a like and subscribe to the channel if you enjoy
the video.
Throughout this portfolio update, I will be using my own dividend tracking software available
at DividendData.com.
On this platform, you can analyze multiple portfolios, track your dividend income, and
conduct in-depth stock research.
I keep adding new features, some of which I’ll demonstrate today.
You can sign up with the link in the description and pinned comment.
Now, let’s dive into my portfolio.
The current total value of my dividend portfolio is $102,433.23.
Since starting, I’ve invested $87,470 to fund the account.
This portfolio’s value has seen a sharp decline along with the overall market in recent
weeks.
From mid-August to now, the S&P 500 has declined nearly 9%.
This decrease puts my dividend portfolio’s unrealized gain at just under $15,000.
My total return is 17.11%.
The annual dividend income this portfolio is estimated to generate is $3,368.
The dividend yield on my cost is 3.55%.
The compound yield on cost is 3.85%.
The snowball effect is 0.3%.
This is the difference between your compound yield and yield on cost.
We’ll talk more about this later, but the general idea is that this measures the impact
of reinvesting dividends.
I recently added a new section to my portfolio page, which includes Dividend Insights on
all my stocks.
We’ll go over both of these in detail.
ExxonMobil is my top holding, which has grown to $14,719.
This is over a 160% total return.
Disney is my second largest holding at $12,250, which I’m down over 25% in this account.
They currently have their dividend payment suspended, but I remain bullish on the company
long-term and think they are making the correct business decisions.
In hindsight, I bought too much at a high valuation and should have remained more disciplined
given their business transformation and pandemic financial pain.
That said, I’m very comfortable with my position and think it will do well over the
coming years.
Next, I have AT&T, currently valued at $9,000, down over 9%.
I haven’t been adding to this position, but continue to collect and reinvest my large
dividends.
Next, I have Microsoft and Apple which are 2 of the best companies in the world.
I’ll be adding to both on dips.
Then I own Altria, which is currently valued at $6,000 and I have a 15% total return.
I’m not going to dive into each of my individual stocks in today’s video.
Other notable holdings include 3M, which has been plagued by lawsuits and negative investor
sentiment.
That risk is real, but I haven’t been covering this due to the lack of information.
The court process seems like it will be long before it’s settled.
My current strategy is to hold on my existing position and reinvesting dividends.
That said, if the lawsuit risk did not exist I think the stock is great value at current
prices.
It’s trading at a low forward PE of 10 and a dividend yield of 4.9%.
Here you can see the current diversification of my portfolio.
Just under $23,000 is in communication services which includes Disney, AT&T, and Warner Bros
Discovery.
Next, is Energy around $21,000 with ExxonMobil, Chevron, and Enterprise product partners.
Technology just under $20,000 with Microsoft, Apple, and Intel.
Consumer Defensive at $18,000 with Altria, Kroger, PepsiCo, Smuckers, and Coca-Cola.
The rest of my stocks are under 25% of my portfolio.
Before I analyze my dividend income and snowball effect, let’s discuss my new buy’s since
my last update.
I invested $1,169 new dollars into my portfolio.
I bought 26 shares of Intel at an average cost per share of $33.36.
I bought 4 shares of MO, at a cost per share of $45.45.
Finally, I bought 1 share of T Rowe Price at $119.90.
On top of this, I have all my reinvested dividends in that time.
This is a constant investment into my portfolio which builds the dividend snowball effect.
Let’s dive into my portfolio’s dividend insights.
Here you can see all my stocks sorted by total annual dividend income.
For each stock, you can see your DRIP shares, dividend payment, frequency, annual dividend,
yield on cost, compound dividend yield, and the snowball effect from dividend reinvestment.
My top dividend payers are AT&T with $583.67, ExxonMobil with $542.04, MO at $485.58, WBA
at $252.81, and EPD with $221.76.
These are my largest dividend payers, and best represent the snowball effect.
With AT&T, my dividend yield on cost is 5.33%.
This means for every $100 I invested, I earned $5.33 in dividends every year.
I’ve earned 48.82 shares from reinvesting dividends.
This boosted my compound dividend yield to 5.87%.
This is a snowball effect of 0.55%.
This means that $54.68 of my annual dividends from AT&T are due to dividend reinvestment.
I reinvest that difference accelerating the growth of my future dividend income and snowball
effect.
With ExxonMobil, my dividend yield on cost is 8.6%.
In my ownership, I’ve earned 15.98 shares of from reinvesting dividends.
This increased my compound dividend yield to 9.6%.
This is a snowball effect of 1%.
This means that $56.45 of my annual Exxon dividends are derived from dividend reinvestment.
This is additional income that reinvests, compounding my future income.
With Altria, my dividend yield on cost is 8.41%.
I’ve earned 11.88 shares from dividend reinvestment.
My compound dividend yield is 9.23%.
My Altria snowball effect is 0.81%.
$42.63 of my annual Altria dividends are from my drip shares.
My highest yield dividend stock is EPD, which is a 9.57% dividend yield on cost.
Reinvesting dividends, has resulted in 17.71 more shares.
This boosted my compound dividend yield to 11.29%, creating a snowball effect of 1.71%
so far.
$33.60 of my EPD dividends are from prior dividend reinvestment.
With each dividend stock, this principle of dividend reinvestment is one of the major
factors compounding your income.
This can be measured across your entire portfolio.
My portfolio snowball effect is 0.3%, which net’s me $262.41 in additional dividends
to reinvest.
This compounds and the gap will widen overtime.
It may seem small, but this principle will have large long term impacts.
I reinvest all of my dividends and as these payments grow, the compounding effect get’s
larger.
I average investing around $1,000 a month into this portfolio.
Based on my dividend income, I’m now reinvesting an additional $200-400 dollars a month.
That has real impacts.
Eventually, that will be thousands of dollars a month being passively reinvested.
Since starting this account, I’ve earned $6,456 in dividends.
Year to date, I’ve earned and reinvested $2,240.
In August, I generated $214.59.
So far in September, I’ve already earned $75.20 and it’s on pace to be my largest
month ever.
My current projected annual dividend income is $3,368.61.
This is $280.72 a month or about $9.23 a day.
My income is a little lopsided with 2 months around $200 and one $439.
In September, I have an estimated $342.50 more dividends coming.
ExxonMobil is the largest individual payment coming in at $135.
All of these dividends will be reinvested, adding to my snowball effect.
Dividend reinvestment is one of the most important aspects of long-term dividend investing.
Another important factor to consider is dividend growth itself.
Many companies reliably grow their dividend payments at a high rate.
High dividend growth, when combined with dividend reinvestment, is a powerful investing formula.
This is just my opinion and a strategy I follow, but make sure to your own research before
making investment decisions.
Thank you for watching Dividend Data.
You can sign up for DividendData.com to track your portfolio just like me and join a discord
community of like-minded investors.
If you follow me on Twitter, link in the description, you can real-time updates of my buys and dividends
coming in.
Please leave a comment below and thank you for watching!