$100,000 Dividend Portfolio – July 2020 Update

If you are wondering which part of the market is not recovering from the drop earlier this year, look no further than my dividend portfolio. 🙂 While the S&P has made it all the way back to positive, this set of stocks is still down over 20%. It’s going to be interesting to watch the next year play out on dividends paid and increases in this market. If you want to learn more about the strategy, check out my post outlining how I’m taking $100,000 dollars now in order to create a passive dividend stream of $100,000 in 30 years.

In total the portfolio went up $436 dollars this month to move us to $99,734 for a total return of 1.1%.  This compares to a +22% return in the market over the same time frame.  (that’s from last May when we started) We lost another 5% to the market this month.

I have also started to compare our performance against VUG to see if we can beat the total return on a growth ETF.  As I showed in this article, historically the VUG ETF has beat dividend funds focused on income growth.  This is also just as bad as VUG has fared better in the crisis and we now trail by 49.4%!!! VUG is made up with Microsoft, Apple, Amazon, Facebook, etc… which have not been hit as bad in this whole crisis. Moral of the story so far, go by VUG, which I did with some of my money. 🙂

On the positive side we added a lot of shares at lower prices and with the quicker rebound than we thought I’m hoping we can see the companies hold strong moving forward.

Dividends Paid in July

Only$53 dollars in dividends this month as only Coke paid a dividend. The first month of each quarter is pretty boring with only one stock paying right now.

  • KO added 1.186 shares for $53.54

Dividend Increases/Decreases

  • DUK increased its dividend by 2.2% to $3.86
  • More importantly companies like XOM, ET, and OKE did not decrease their Q3 plans

Portfolio Changes

  • Total Shares at 2,643 up 1 share from last month
  • Annual Income Projection of $6,113 up $8 dollars since last month. That’s up 0.75% in the first seven months. Remember our annual goal is 9.5% to deliver $100,000 income in 30 years. We grew 14% last year so we can afford a slightly down year.
  • Portfolio Yield – maintains at 6.1% with the stock prices being flat
  • Overall dividends per share are at $2.31. This is a 3.2% decrease for the year.
  • We are still ahead of last year but you can see we are not seeing the same increases in dividends that we saw last year. We are only 5.2% ahead at this point.

2020 Goal Progress

Category 2020 Start 2020 Current 2020 Goal
Average Stock Price $48.52 $37.74 $50.70
Average Dividend $2.39 $2.31 $2.49
Annual Income $6,068 $6,113 $6,652
Total Shares 2,543 2,643 2,668
Portfolio Value $123,383 $99,734 $135,279
  • We still have over a 20% return to make up this year
  • Our average dividend has now declined with the cut by HEP
  • If our stock prices stayed flat for the rest of the year and there were no more dividend increases we would end the year at $6,409 for annual income. This would put us $243 dollars below our goal for the year, but still at an average 9.5% return over the first 2.5 years.
  • As we show in the chart below if we continue to have 9.5% annual income gains we will be at $45,728 by 2042. This will keep us on track to withdraw $100,000 a year at the age of 70.

Summary

This continues to be the sore spot of an otherwise really solid year. The back half will be interesting as the world hopefully stabilizes and we will see if the energy companies can figure things out. I can’t imagine these companies having yields above 10% forever so either they are going to get cut or the prices will move back up.

August we will get back at it with all of our largest dividend stocks paying out their Q3 payments.

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