My Dividend Growth Portfolio January Update

by Evan

I have been dreading writing this post since I already know I screwed up in December.  I gave myself very specific rules when it comes to selling short puts and I think my head got a little too big after a ridiculous month in November when it comes to investment income.

My December 2016 Investment Activity

My Undervalued Dividend Growth Stock Purchases

December, like most months, I made my normal $500 purchase plus my option income for the previous month($506):

  • On 12/6/2016 I bought 15 Shares of Aflac (AFL) at $68.75 ($1,038.32 purchase).

This added to the 10 shares I already owned.

I also was assigned 100 shares of Smith and Wesson (was SWHC and now is AOBC) and Urban Outfitters (URBN).  I will attempt to sell covered calls on these positions until they are called away.

My Investment Income

  • I received $96.65 in dividend income (automatically reinvested); and
  • I lost an awful $85.44 

I went from an awesome $500 month to -$85? That is frustrating, and completely my fault.

Some mistakes that I made:

  • I ignored my rule about spreading out the leverage.  I had multiple contracts on SWHC (AOBC), URBN, UAA – when in reality they should have  been spread out.
  • I ignored my rule going out too far.  The farther I go out the less I get the benefit of time decay – I have to keep it under 45 days.
  • I created an alternative closing schedule that I think is premature.  Most of my money is made from the velocity of my trades I will revisit the non-50% exit strategy when the account is bigger

My Current Holdings & Ratios

Company Ticker Shares Price Value Cost Basis Current Dividend Payout Current Expected Annual Income Yield on Cost
Aflac AFL 25.063 $70.19 $1,759.17 $70.70 $1.72 $43.11 2.43%
CATERPILLAR INC CAT 22.385 $93.04 $2,082.70 $75.48 $3.08 $68.95 4.08%
Community Trust Bankcorp CTBI 32.132 $48.55 $1,560.01 $38.33 $1.28 $41.13 3.34%
Emerson Electric EMR 26.461 $56.40 $1,492.40 $48.49 $1.92 $50.81 3.96%
CULLEN FROST BANKERS INC CFR 10.141 $87.77 $890.08 $65.36 $2.16 $21.90 3.30%
Franklin Resources BEN 22.116 $40.75 $901.23 $34.53 $0.80 $17.69 2.32%
Old Republic ORI 35.351 $19.16 $677.33 $18.41 $0.76 $26.87 4.13%
SONOCO PRODS CO SON 22.31 $54.00 $1,204.74 $36.91 $1.48 $33.02 4.01%
PRICE T ROWE GROUP TROW 35.496 $75.62 $2,684.21 $69.18 $2.16 $76.67 3.12%
TARGET CORP TGT 28.461 $71.44 $2,033.25 $71.18 $2.40 $68.31 3.37%
UNITED TECHNOLOGIES CORP UTX 20.249 $112.55 $2,279.02 $87.72 $2.64 $53.46 3.01%
280.165 $17,564.14 $501.91

The value of the account month over month is not all that important to me.  I am really interested in two numbers, the amount of shares and the expected annual income.  Both those numbers should increase month over month, otherwise something is wrong.  I went from 263 shares to 280 shares this month and an expected income of $471 to $501.

 

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