October, the first month of Q4, is a wrap. As this post goes live, it is nearly half way thru November and just over a week away from the Thanksgiving holiday. October's dividend summary brings bittersweet reflection and analysis. To start, the bitter part is the impact of the dividend reduction GE announced in late 2017 (which at the time announced was a 50% cut) is now showing up as an unfavorable rate variance in my dividend summary (initial purchase was made in the later half of 2017 and prior to commencing this blog) and what is worse is that this will continue for the next year so long as GE remains a part of my portfolio due to another dividend rate cut announced here from $0.12 a quarter to $0.01 - a 92% cut, ouch! I am holding my position for now and will continue to keep a close eye on it. It is far from a DGI opportunity at this point and, if anything, may be a speculative play or valuation play at some point (may be worth mentioning that the new CEO, H. Lawrence Culp, Jr., recently purchased 225,000 shares at $9.73 on 11/1/2018). Today's closing price was $7.99/sh 😣. If there is anything sweet to be salvaged from this month's summary, it is that despite the rate cut in GE's stock, YoY dividend income in October is up 41.5% over last year. See below for additional details.
Aside from the GE cut spoken of above, CSCO has come thru this year with a double digit increase earlier this year and KO came thru with a mid single digit increase followed by two REITs, KIM and WPC, who have made some nominal increases to their relatively high dividend yields; all of which have certainly help mitigate the "right hook" taken from GE.
Certainly, one take away from the review of the summary above is that diversification plays a key role in safeguarding one's capital so when businesses go south, as has been the case for GE, an investor is not left empty handed so to speak. What is also worth highlighting is, had I not contributed any additional capital to the portfolio, nor reinvested any dividends received in previous months, YoY dividend income for the month of October would have been down by ($8.52) or (2.9%). This is certainly not a situation anyone longs for, but despite GE's cut, the YTD (Jan-Oct 2018) favorable rate increase for the portfolio as a whole amounts to 6.8% for these last ten months (more on this metric to come in a later post when I look back at 2018 as a whole).
In closing below is a snapshot of where the major market indices are trading per the dates noted within the image. Interesting to note that with the recent market declines and latest earnings reported, many of the indices are trading at a more favorable multiple than they were this same time last year and with a bit better dividend yields to boot.
Per the summary above it is easy to spot the favorable impact that the new positions in KMB and PPL have had on the volume variance to more than offset the unfavorable impact of the GE cut discussed above. Also, additional purchases of CPB and KIM also contributed to the volume gains YoY.
Aside from the GE cut spoken of above, CSCO has come thru this year with a double digit increase earlier this year and KO came thru with a mid single digit increase followed by two REITs, KIM and WPC, who have made some nominal increases to their relatively high dividend yields; all of which have certainly help mitigate the "right hook" taken from GE.
Certainly, one take away from the review of the summary above is that diversification plays a key role in safeguarding one's capital so when businesses go south, as has been the case for GE, an investor is not left empty handed so to speak. What is also worth highlighting is, had I not contributed any additional capital to the portfolio, nor reinvested any dividends received in previous months, YoY dividend income for the month of October would have been down by ($8.52) or (2.9%). This is certainly not a situation anyone longs for, but despite GE's cut, the YTD (Jan-Oct 2018) favorable rate increase for the portfolio as a whole amounts to 6.8% for these last ten months (more on this metric to come in a later post when I look back at 2018 as a whole).
In closing below is a snapshot of where the major market indices are trading per the dates noted within the image. Interesting to note that with the recent market declines and latest earnings reported, many of the indices are trading at a more favorable multiple than they were this same time last year and with a bit better dividend yields to boot.
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