CSBB - Bert's December Dividend Income Summary
2024-01-16 03:58:00 ET
Summary
- In December 2023, we received $6,884.70 in dividend income.
- The majority of our dividend income this month came from funds.
- Johnson & Johnson, Target, and T. Rowe Price were clearly the top 3 individual stock payers.
December is always the best month for dividend income. Not only do mutual funds and ETFs pay dividends in the third month of the quarter, but mutual funds also pay their capital gains distributions as well! We definitely benefited from a massive payout this month. It wasn’t a record-setting dividend income month; however, it is definitely in our Top 3 of all time. Time to jump in and read our December Dividend Income Summary!
Why I Invest in Dividend Stocks
I invest in dividend stocks to grow my passive income with dividend income. One day, my dividend income will be large enough to cover my monthly expenses and allow us to retire early. That is why we are always relentlessly searching for undervalued dividend stocks to buy. To put our hard-earned cash to work.
We save a high percentage of our income each month, to help fuel our dividend stock portfolio. Having a high savings rate is a key pillar of our strategy and helps fuel the fire and push the snowball further downhill. While we are waiting to invest our money in the market, it is earning a high interest rate in accounts. There is nothing more critical than maximizing every dollar in your savings account.
The 3 primary savings accounts I use are:
-
- SoFi - 4.6% APY on all savings accounts (lower for your checking account). The race for deposits is intense ! Banks and credit unions are offering great savings rates.
- Capital One 360 Savings - 4.35% APY - We use Capital One for our checking and savings accounts.
- Wealthfront - 5.0% without promotion.
How Do We Find Dividend Stocks to Buy?
That’s easy. We use our dividend stock screener with every stock purchase! This simple, 3-step stock screener is designed to identify undervalued stocks with a strong payout ratio that have a history of increasing their dividend. Fundamental dividend growth investing at its finest.
The three metrics of our screener are:
- Price to Earnings Ratio less than the S&P 500
- Payout Ratio less than 60%
- History of Increasing Dividends
- Dividend Yield ( bonus )
We use this stock screener for each purchase and have consistently done so for 10+ years on our journey to financial freedom!
Bert’s December Dividend Income Summary
We closed out the month in style, that is for sure. In December 2023, we received $6,884.70 in dividend income! That is a 30% dividend increase compared to December 2022.
My wife and I couldn’t be happier with the results! We did receive a lot of individual payments. In fact, probably too many payments. In December, we received over 60 individual dividend payments. We broke the individual payments chart into two different charts: dividends received from mutual funds/ETFs and dividends received from individual dividend stocks. The detailed tables are as follows:
Fund Observations
Clearly, the majority of our dividend income this month came from funds. We summarized the amount of income received from stocks versus funds. 72% of our December Dividend Income came from funds. One fund in particular stole the show, [[VIIIX]]. This is the primary fund in my wife’s largest 403(b) retirement account! We are actively contributing to this account on a regular basis and the results are really paying off!
Even though VIIIX stole the show, there are some other very positive trends as well. My wife has been buying 4 shares of Schwab’s U.S. Dividend Equity ETF ( SCHD ) every single week. Our goal was to increase the position to at least $500 in annual dividend income… and then some more. The results of the consistent investing started to show this month. We received nearly $100 from SCHD. We should easily blow past this threshold in March (when we receive this next dividend income).
We started with purchasing 1 share of Vanguard’s Dividend Appreciation Index Fund ETF Shares ( VIG ) in November 2023. We received a small dividend from them. The $2.75 may be small, but next year, that number will be a lot larger. The start of the journey is definitely the best part.
The other funds did their parts as well. They delivered strong, consistent results that are allowing us to reinvest dividends and keep the dividend snowball rolling.
Individual Stock Observations
From an individual dividend stock perspective, the results of building current positions are really starting to show. We had 3 individual stocks that paid us strong amounts of dividend income in December. Johnson & Johnson ( JNJ ), Target ( TGT ), and T. Rowe Price ( TROW ) were clearly the top 3 individual stock payers. Those 3 companies paid us $588 in dividend income this month.
We famously built our Johnson & Johnson position to 100 shares in both stock portfolios over the last few years. Once we hit that threshold, we stopped and allocated the funds elsewhere. The results of this hard work have us receiving almost $300 each quarter from the dividend king! T. Rowe Price is a pleasant surprise. We built my wife’s position from scratch over the last few years when the stock price fell. We continued adding more and lowering our cost basis while the price was in the $90s and $100s. Couldn’t be happier that we did.
Outside of the Big 3, I am planning on continuing our push to build larger positions in our current portfolio and trim smaller positions. We used downturns in 2023 to build large positions in Tyson ( TSN ), Realty Income ( O ), QUALCOMM ( QCOM ), Stanley Black & Decker ( SWK ), and other great dividend stocks. It made me very happy that each of those stocks paid dividends that were in the top 50% of our dividend-paying stocks.
On the other hand, there are way too many positions that pay us small dividends. 7 positions pay us less than $10 per quarter while 3 other companies paid us less than $11. There are just too many positions in this portfolio that aren’t doing much for us. 2024 is the year I am committing to changing this!
Overall Progress
As we’ve said, we couldn’t be happier to receive almost $7,000 in dividend income in a given month. We have been investing for 10+ years and the results are really starting to flex their muscles. It is freaking amazing! To help visualize the progress, we put the following chart together. The chart shows our December dividend income totals over the last 5 years. 2021 was an anomaly due to the insane capital gains distributions. If you reduce 2021 and adjust the slope to even just an average capital gain distribution, it shows that we continue to trend upwards.
December Dividend Income Summary
How do I feel heading into 2024? Amazing. We continue to see strong results. Are we going to stop? Not a chance. If anything, these results make us want to push harder and invest even more money into dividend stocks and ETFs.
How much income did you receive in December? What was your allocation of stocks vs. funds this month? What stocks and ETFs do you buy regularly?
-Bert
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
For further details see:
Bert's December Dividend Income Summary