SBUX - My Dividend Growth Income - April 2023 Update

2023-05-01 16:17:56 ET

Summary

• Dividends received in March totaled $485.60.
• Forward dividend income grew by $75.55, translating to M/M growth of 1.28%.
• The estimated forward dividend income is now $5,938.

I can't complain about another healthy month of growth in forward dividend income. The mountain of dividends received since the inception of this article series is really starting to pile up with a total of $3,897.50 in dividends received. Continuing the strong growth in my forward dividends, I added $75.55 to my future income through consistent weekly purchases and harnessing the power of reinvested dividends. For an easy visual of my personal growth, here is what my dividends look like in chart form.

Background

The initiation of tracking my DGI income on Seeking Alpha can be found here . My dividend income is tracked across all of my portfolios (taxable accounts and IRAs, not 401ks). A large portion of the target $100,000 will be produced within retirement accounts and thus not easily accessible during early retirement; however, I will aim to maintain a 33% proportion of dividend income in my taxable account. With this level of dividend income and adhering to the 4% rule on the overall taxable account size, I will be able to reasonably consider a change in career into a more part-time role or pursue other methods of income until I am able to access retirement funds. Meanwhile, my retirement accounts will continue to build and grow until I'm ready to begin taking distributions to fund my retirement.

Forward Income Added

During the month of March, I added $75.55 in forward income, now making my total forward income $5,938. I received a respectable amount of dividends this month, $485.60. I am happy to see such a large total in April since this historically was not a strong month of dividends for my portfolio.

My breakdown of income added via new purchases, dividend reinvestments, and dividend rate increases does not include forward income added via re-allocation of funds that already existed within my portfolio (i.e., the money from the sale of one security invested into another). I will only be breaking down the effect of "new" capital entering the accounts in this section. Also, I would like to reiterate that increased income and tracking of funds from my recurring 401(k) contributions are not included in these articles as the fund options available to me do not paint a clear picture on income and distributions.

For my weekly $150 purchases I accumulated shares of Enterprise Products Partners ( EPD ), CVS Health ( CVS ), and Essential Properties Realty Trust ( EPRT ). Additionally, I continued my weekly $25 purchase of General Motors ( GM ) throughout the month. Lastly, I sold some covered calls throughout the month and used the proceeds to buy a few shares of Medical Properties Trust ( MPW ) Let's first look at the forward dividends added via all new purchases:

• 2.818 shares of GM adding $1.02 in forward income.
• 8.157 shares of EPRT adding $8.97 in forward income.
• 2.665 shares of CVS adding $6.45 in forward income.
• 8.269 shares of EPD adding $16.21 in forward income.
• 4.745 shares of MPW adding $5.50 in forward income.

April was a solid month for dividends received, all dividends this month were automatically reinvested into their respective positions. Some larger, higher-yielding positions pay out dividends in my portfolio during this month so I witnessed substantial growth in forward dividends via dividend reinvestments. Here are all of the companies I received dividends from during April:

• 2.183 shares of VICI Properties ( VICI ) reinvested adding $3.41 in forward income.
• 15.803 shares of MPW reinvested adding $18.33 in forward income.
• 3.137 shares of Franchise Group ( FRG ) reinvested adding $7.84 in forward income.
• 2.18 shares of EPRT reinvested adding $2.40 in forward income.
• 0.309 shares of Realty Income Corp. ( O ) reinvested adding $0.95 in forward income.
• 0.83 shares of Comcast ( CMCSA ) reinvested adding $0.96 in forward income.
• 0.088 shares of Watsco Inc. ( WSO ) reinvested adding $0.86 in forward income.
• 0.279 shares of American Tower Corp. ( AMT ) reinvested adding $1.74 in forward income.

April is a poor month for me in terms of dividend increases and for the first time since I started this series, I have no forward income additions from dividend increases this month as no companies in my portfolio made announcements this month.

Through the first 4 months of 2023, here is how my forward income has grown via new purchases, dividend reinvestments, and dividend increases. If you would like to follow along with my transactions as they happen, please see my real-time dividend transaction tracker that I have setup to provide even greater detail on the power of dividend growth investing.

Lastly, I completed another month of capturing the effects of dollar cost averaging. In total for 2023, my portfolio has witnessed 119 transactions on 51 different market open days.

Recurring Investments Update

Starting in May 2023 I will make some slight changes to my recurring investment strategy. For now, I will be halting my recurring investments in GM as I am happy with the small position I have for now and will likely add to it in bigger tranches throughout the year. To be clear, my bullish stance on the company and stock has not changed. I just wanted to free up some room for other investments.

Secondly, I have also decided to increase my weekly $150 influx of capital for new purchases by 10% to $165 per week. While this may seem like a small change, over the course of a year this will total up to an additional $780 of capital invested into dividend growth stocks! I am happy to be able to make this increase in my cash allocation and look forward to accelerated growth in forward dividend income.

Portfolio

No large shake-ups in my portfolio this month. I am continuing to see the healthy growth I was hoping for in my Visa, Microsoft, and Analog Devices positions. Once again, my ETF position continues to slowly drop in portfolio weighting as I focus more on accumulating individual stocks.

Looking Forward

I am now extremely close to a major milestone of mine, $6,000 in forward dividend income. I find this to be a major achievement as it represents $500/month from dividends. Unfortunately, May is likely to be a slow month in terms of dividends received and dividend increases which will hurt my chances at reaching that milestone. Because it is only for one month and the target investments are currently at low valuations, I will be allocating my $165 in weekly investments toward higher-yield stocks in May. I will be adding to my positions in Essential Properties Realty Trust, Medical Properties Trust, and Enterprise Products Partners. While this may not be the best possible strategy, I'd really love to hit that $6,000 forward income milestone and will revert back to my standard, more growth balanced, investing strategy after May.

I have previously provided some greater insight on why I like EPRT and EPD as dividend growth stocks. If you would like to see the analysis for each of these companies you can read further here:

2 Dividend Stocks I'm Buying: Cash Flow Is King

2 High-Yield Stocks I'm Buying For Dividend Growth

Summary

I am more than happy to see another month of greater than 1% growth in forward dividend income. After adding $75.55 in forward dividends, my future dividend income increased by 1.28% to a total of $5,938. An interesting metric I decided to calculate is that I will now be earning $16.27 per day in dividends moving forward.

I hope I get to report the good news of reaching $6,000 in forward dividends next month!

For further details see: