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How Was My Dividend Income for Q1 2012?

I couldn’t wait for the end of the first quarter to see how I ended up doing with the dividend income in my retirement account.  Three months is a long time to wait and see if you made your goal.  In case you missed it, my goal for these first three months was to get to $1500 in dividends.  Then the plan is to increase that figure by $300 per quarter throughout the year in order to end the year by making $2400 (or $800 per month average) in the last three months of 2012.

In order to accomplish this goal, I have started a transition away from stocks that don’t pay dividends to those that do.  I ended up adding Seadrill (SDRL) to my portfolio and Seagate (STX) as well.  I still have other stocks that I am wanting to replace as I end up with a decent profit from my earlier positions.  I still have the opportunity to purchase many more dividend yielding stocks so I should ultimately be able to come close to meeting my goal.  So, how did the first quarter turn out?  Here is the graph:

I hope that you can tell I made my goal.  My total dividend income for the quarter was $1588.75.  Theoretically, then I should only need a little over $200 to hit the target of $1800 for the second quarter.  Surprisingly, I did not get a dividend from Silver Wheaton (SLW) which will ultimately cover the majority of that $200.  I simply need to buy a few more shares or have a company or two increase their payout.

The Plan

I figure that a few more shares of Seadrill might do the trick.  It pays out $0.80 per share so I would only need 200 to accomplish that.  Of course, I would have to pay for them and the amount of cash in the accounts is limited right now and none is being added.  I could make some cash by continuing to sell covered calls which I have been doing.  Finally, once I can sell my remaining shares of AK Steel, I would have enough for the 200 shares of SDRL.

I also could purchase some more shares of Intel or Seagate since I do have some cash in those accounts.  My retirement account is divided into four separate pools.  It is complicated but it is the way it has been and won’t change anytime soon.  But that doesn’t really matter.  What matters is that I have been able to increase my dividend income and remove some volatility from my portfolio.  (Plus I can put graphs into posts!)

How is your dividend income coming?  Are you working to grow it, like me?  Any good dividend stocks that you like?  Comment below and thanks for reading!

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18 comments - What do you think?  Posted by Cash Flow Mantra - April 2, 2012 at 8:42 am

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Dividend Income for Fourth Quarter 2011

In August, I began focusing more on dividend income with my purchase of Intel stock.  I then went on to develop a plan for increasing my dividend income in 2012 which I shared in mid-December.  The fourth quarter of 2011 represents just the beginning of this plan’s implementation, but the results were quite impressive.  I am gradually making a shift by selling off profitable positions and putting the proceeds into stocks that pay dividends.  Ultimately over the course of a few years, I hope to have all my retirement account stocks earning dividends and reinvesting the proceeds in order to grow my portfolio.  I have seen the lost decade in growth stocks and think it is simply a better idea to invest in companies that are sharing profits with shareholders.

Also, each year that goes by brings me one year closer to retirement when I will have to live off of my accumulated assets.  I want those assets to be throwing off streams of income that will pay for my living expenses as well as some fun!  That is why I have a multifaceted approach to setting myself up for retirement which will probably be a post all by itself some time in the near future.  Dividends play one part in this plan.

Results for Q4 2011

Here is a graph of my dividend income over the past 2 years.  You can clearly see what the increased focus on dividends has meant.

In the first quarter of 2010, my dividend income was $115.38.

In the most recent quarter of 2011, the income from dividends was $1187.63 or almost $300 per month.  That is quite a big difference.

The majority of that dividend income was a result of my investment in Seadrill (SDRL) which is involved in offshore oil drilling.  The high price of oil has helped out the stock price.  I don’t see the price of oil dropping any time soon so my investment should be good.  Even if it does drop, then my daily costs would decrease.  If oil dropped to $40 per barrel and gasoline was under $2, I would still be ecstatic!

I plan on being able to add more SDRL as I shift out of AK Steel (AKS).  The dividend is over 8% which is huge!  I do have to pay attention to the payout ratio which is listed as 99% on Yahoo Finance and 62% on ETrade.  But I have protective puts in place which help to decrease my risk.

Goal for Q1 2012

My goal for the first quarter of 2012 is $1500 or $500 per month.  I will be getting some dividends from Seagate (STX) which I bought in December.  I should also be able to get out of Gamestop (GME) with a profit and move those funds into more Intel (INTC) shares.  Theoretically, that should be enough to get me to the $1500 goal by the end of March.

As mentioned in my dividend plan for 2012, I only have about a third of my retirement account assets in stocks that pay dividends.  By simply doubling my positions in all of my holdings through the sale of non-dividend paying stocks, I should be able to double my income to almost $2400 by the end of the year.

I am not adding any funds to this retirement account due to an employment change but am still adding to mutual funds in my new retirement accounts and getting a match to boot.

I expect a volatile year with all of the economic uncertainty in Europe and the high levels of unemployment, but hopefully, I can take advantage of depressed prices when they occur, add to my positions, and increase my dividend income even more.  We will just have to see how it goes.

Readers:  Do you have any specific investment plans for 2012?  Do you like dividends?



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21 comments - What do you think?  Posted by Cash Flow Mantra - January 4, 2012 at 5:30 am

Categories: Investing   Tags: , , , , , , , ,

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