July 2013 Dividend Income Update

A bit of a disappointing month for me. INTC didn't raise the dividend. I decided not to sell yet and make a decision on whether to sell or not in the future. NSC did raise the dividend only 4%. I was really hoping for something a little bit more than that, given their previous raises were substantially higher. I also added some KMI shares to my portfolio.

All that said, dividends just keep rolling in like clockwork.

Here's the dividend update for July 2013:

Dividends Received

• MO: $15.40
• PM: $30.60
• GE: $12.54

Total dividend income for July: $58.54

Small month compared to the previous, but that's because only three positions paid me this month.

My 2013 goal is $1000, so far I'm 52.71% of the way there, my progress is tracked here.

Looking at the market, there aren't any stocks that stand out as bargains right now to me. Some things look fairly valued. I have some capital ready to allocate into a great business, if the opportunity arises, I'll grab it.

Thanks for reading

Latest buy: KMI

I decided to put some more capital to work in an energy business I already had a stake in.

Today's buy:

• 39 shares of Kinder Morgan Inc (KMI) @ $38.67

This purchase will add $62.40 to my annual dividend income.

Kinder Morgan Inc (KMI) owns and manages a diversified portfolio of energy transportation and storage assets in the United States and Canada. Kinder Morgan Inc operates like a giant toll road and receives a fee for its services, avoiding commodity price risk. KMI owns the general partner and limited partner units in Kinder Morgan partners (KMP). 

I already had a position in Kinder Morgan Inc. This purchase boosts the total position up to 83 shares.
Recently Kinder Morgan Inc announced to boost its dividend to $0.40 from $0.38. This pushed the current yield over 4%.

It's very likely Kinder Morgan Inc boosts the dividend at the low double digit for at least a few more years. The high current yield and the dividend growth makes this an attractive buy in my opinion. 

Thanks for reading

I am very close to selling my Intel shares

Today Intel announced its dividend for Q3. The board of directors decided to keep the dividend static for the fifth quarter in a row, I was really anticipating a  raise of at least 1 cent per share.

This forces me to make a decision. Intel is losing the tablet and mobile business, therefore future earnings are hard to predict. While the stock might appear cheap now, it could be considered a value trap by some.

I held onto the stock for its raising dividends and high yield. A dividend that is static for five consecutive quarters, that is not a good sign. Although it might be a smart move by the board, conserving cash to strengthen the business.

I'm just not sure how to interpreted this. I might sell in the near future and use the proceeds to buy something that I'm more sure of.

I have to think about it for a little bit. Do I hold onto the stock, or do I sell and buy something else? I'm interested to see what other bloggers will do with their Intel shares. I know a lot of dividend growth investors have a position in Intel. What do you think, sell or hold?

Thanks for reading.

Warren Buffett on rising Coca-Cola dividends

Warren Buffett is one of the most successful investors in history. Berkshire Hathaway's chairman has a reputation of eloquence in his annual shareholder letters. I was reading the 2010 annual letter to shareholders this morning. One of my favorite passages came from page 18, he was talking about how time is the friend of the wonderful business.

I couldn't agree more. I try to spot great businesses, acquire them for a reasonable price, let time do the heavy lifting and compounding work its magic. A great business at some point generates more money in the form of dividends than you put into, you can use that money to fund your lifestyle, retire early or buy more pieces of great businesses.

Buffett on Coke's rising dividends:

Other companies we hold are likely to increase their dividends as well.  Coca-Cola paid us $88 million in 1995, the year after we finished purchasing the stock.  Every year since, Coke has increased its dividend.  In 2011, we will almost certainly receive $376 million from Coke, up $24 million from last year.  Within ten years, I would expect that $376 million to double.  By the end of that period, I wouldn’t be surprised to see our share of Coke’s annual earnings exceed 100% of what we paid for the investment.  Time is the friend of the wonderful business.

When you start out collecting these stocks that pay rising dividends it might be frustrating because the cash generators only produce a trickle in the beginning. But a trickle becomes a drip, a drip becomes a stream, a stream becomes a torrent and a torrent becomes a deluge. That's how compounding works. It starts small and starts growing, faster and faster. Nobody started his first year dividend investing and getting thousands of dollars in passive income immediately. It starts small, that shouldn't stop you from beginning.  You have to start somewhere!

For more shareholder letters from Warren Buffett, read more at www.berkshirehathaway.com/reports.html

Thanks for reading.

June 2013 Dividend Income Update

Small correction in the market this month. Mostly due to Fed chairman Ben Bernanke speaking, he will stop pumping $85 billion in the economy somewhere in 2014-2015, at least that's the plan.

I don't think much about it. I keep accumulating shares in wonderful companies that give me an ever increasing amount of dividends. This is the plan, what the Fed is planning to do won't change that plan.

Day to day fluctuations in the paper price of my portfolio has no effect on my happiness. My time horizon is decades, I can ride out the volatility.

Here's the dividend update for June 2013:

Latest buy: DPS

Finally, a little correction in the market! Why is this a good thing? I'm an investor in the accumulating phase of his life. I want my stock be as cheap as possible now, so I can buy the most dividend income and future profit with my dollars today.

When I walk into a supermarket and I see there is a big sale going on, I'm a happy guy. When stocks become cheaper, I'm a happy guy. I'd love it if stocks slide lower from here.

Today I decided to put some capital to work.

May 2013 Dividend Income Update

 Another dividend update. Slight pullback right at the end off the month in the stock market. There might be some buying opportunities. My companies just send in the dividends like clockwork, giving me cash to deploy. Here is the dividend update for May 2013: