PEAK - Bert's May 2023 Dividend Income Summary
2023-06-06 15:58:00 ET
Summary
- The author's May dividend income reached $883, a 20.25% increase compared to May 2022.
- Banks contributed 22.4% of the May dividend income, with a total of $198.05.
- The AT&T dividend cut in 2021 still impacts the author's dividend income, preventing them from crossing the $1,000 mark.
May is in the books! Another month of 2023 is behind us. The stock market continues to surprise us with sky-high interest rates, growing consumer debt and potential recession. We ignore the noise and continue buying dividend growth stocks. Each month, we summarize our dividend income totals to hold ourselves accountable. This article continues our detailed May 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 – 4.2% 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 – 4.00% APY – We use Capital One for our checking and savings account.
- Wealthfront – 4.55% 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 May Dividend Income Summary
We received $883 in May dividend income. This was a 20.25% dividend increase compared to May 2022. That is how you start the second quarter off in style. We are freaking pumped up to realize a 20% annual dividend rate.
The following table details the individual dividends we have received during the month of May!
As always, we have a few observations for the month. We note the following observations:
Observation #1: Banks Continue to Flex Their Muscles
This is the exact same portfolio observation as last month’s dividend income summary . Normally I don’t like repeating observations, but it still holds true in May. Our second-largest dividend income from the month was from a community bank headquartered in Pennsylvania, Citizens & Northern ( CZNC ). We received $78.36 in dividend income from this bank alone. We also received dividends from Citibank ( C ), Premier Financial ( PFC ), Norwood Financial ( NWFL ), and Provident Financial Services ( PFS ).
In total, banks paid us $198.05. That was 22.4% of our May dividend income. A heavy allocation for the sector; however, it's not considered overweight for this month’s dividend income total. Once the banking crisis subsides and I stop investing in banks heavily, I’ll reassess banks’ total allocation within our overall portfolio.
Observation #2: The AT&T Dividend Cut in 2021 is Still Brutal
How can we forget about AT&T ( T ) cutting its dividend back in 2021? It wasn’t just devastating to us. It was devastating to all the dividend investors out there that relied on AT&T’s massive dividends for retirement or passive income. One and a half years later, I’m still pissed about it.
We have been relentlessly investing since then in an effort to replace that lost dividend income. It isn’t easy, especially with T’s previously huge dividend. Still, we have found a way to continue clawing back.
The road to comeback has been great. However, I can’t help being frustrated about the dividend cut to this month? Why? Without that dividend cut, we most likely would have crossed $1,000 this month. Ah! That would have been a fun milestone, for sure. The previous dividend cut will just make crossing that mark that much sweeter when we do cross it.
Summary – May Dividend Income
Another month is in the books. We continue to push hard and grind our way through 2023. Now, let's see the market continue to present us with buying opportunities, so we can put our cash to work and continue to grow our passive income streams. I’m ecstatic with a 20% dividend increase and want to make sure that we continue to realize strong double-digit percent gains this year!
How much dividend income did you receive in May? Did you cross the $1,000 mark? Do you have one sector that makes up a large percentage of income in a given month? Do you think we’re over-allocated in banks?
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
For further details see:
Bert's May 2023 Dividend Income Summary