Dividend Income Summary: Bert's April 2021 Summary (2024)

April is behind us, and hopefully so is winter. Fingers crossed that it snowed for the last time in Cleveland and the beautiful days are ahead. Each month, we share the amount of dividend income we received and compare the results to the previous year. It’s a great exercise to track our progress and hold ourselves accountable, as we relentlessly pursue financial freedom. Let’s dive in and review my April dividend income summary!

Why I Invest in Dividend Stocks

I invest in dividend stocks to grow my passive income. One day, my dividend income will be large enough to cover my monthly expenses. That is why we are relentlessly searching for undervalued dividend stocks to buy. To put our hard-earned cash to work.

We use our dividend stock screener with every stock purchase. Our stock screener continues to help us find some awesome undervalued dividend stocks to buy. 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.

Building a large dividend income stream takes time, consistency, hard work, saving, and most importantly, investing. I have been investing in dividend growth stocks since 2012. Saving a high percentage of my dividend income allows me to invest as much as possible, so we can retire as soon as possible.

Slowly, but steadily, my income has grown. Brick by brick. Drip by drip. It is really exciting to see the growth and larger dividend checks trickle into my brokerage account.

Each month, we share our dividend income summaries to highlight our growth and progress. It is a fun and helpful exercise that holds us accountable. Further, it helps you, our followers, see the stocks we are purchasing.

Bert’s April Dividend Income Summary

In April, we received $581.67 in dividend income! This was a 31.5% year over year increase compared to April 2020. It was very exciting to cross the $500 in an “off month.” The following chart summarizes each individual dividend payment we received during the month. In addition to the chart above, I always like to include some observations about the dividend income received during the month. The remainder of this section will discuss the 2 big observations.

In addition to the chart above, I always like to include some observations about the dividend income received during the month. The remainder of this section will discuss the 2 big observations.

Observation 1: Stock Purchases of the Last 12 Months Delivered

Over the last 12 months, we have been aggressively adding to our dividend stock portfolios. The pandemic provided some great buying opportunities. Until the stock market was stabilized and the first stimulus bill was passed, there were a lot of great undervalued dividend stocks that we were able to add to our portfolios. An example of new positions added at the beginning of the pandemic, and 2020, were Cincinnati Financial (CINF) and Genuine Parts Company (GPC).

The stock market continued to increase in 2020. Heck, the market hasn’t taken a break from setting record highs since the first stimulus bill was passed. Even in a climbing stock market, we were able to establish substantial positions in Cisco (CSCO), one large bank (HBAN), and many community banks ((OTCQX:DIMC), (LCNB), (MYBF), (OTCPK:CSBB)).

Lastly, with stock prices depressed last year, we added to our position in Canadian Imperial (CM) and Leggett & Platt (LEG).

Each of the purchases helped offset the major impact of dividend cuts last year. It was great to see our capital being put to work and providing some new, strong dividend income to our monthly total.

Observation 2: Dividend Cuts Hurt… But There is Light at the End of the Tunnel

There were too many companies that cut their dividend during the pandemic. It was understandable, even though it was unfortunate, as cash flows were unpredictable for a long period of time. The hardest-hit sectors included retail, oil, and restaurants. Companies in these sectors could simply not commit to a payout to shareholders when they couldn’t forecast earnings. In addition to the sectors that were hit hard, companies that had debt-filled balance sheets were also forced to cut as well.

Sadly, my dividend income in April 2021 was negatively impacted because we hold two companies that experienced large dividend cuts. The list includes Occidental Petroleum (OXY) and Schlumberger (SLB). The dividend cuts had a ($50)+ impact on our dividend income for the month. Image our year-over-year growth without the cuts!

There is light at the end of the tunnel though. We continue to mention this. Dividend stocks are back. This year, many of the companies that cut or suspended their dividend are growing their dividend payments once again.

It was just announced that Leggett & Platt (LEG) will resume dividend growth with a 5% dividend increase. Shell just announced its 3rd dividend increase since its dividend cut. Lastly, WestRock (WRK) announced a 20% dividend increase. This isn’t perfect, as our Shell and WestRock dividends are still below the pre-pandemic payouts. However, will this translate to the other companies? Next April, we could see even larger gains if OXY and SLB can return their dividend to earlier levels!

The Impact of Dividend Increases

We love dividend increases. It is plain and simple. There is no better feeling than seeing your dividend income grow without lifting a finger. Heck, that’s part of the reason why we think dividend investing is the best, and easiest, form of dividend income.

This shouldn’t be a shock to our readers. We were both pretty excited about the dividend increases we were set to receive in April. Some of the best dividend growth stocks, including 2 of our Top 5 Foundation Dividend Stocks, and the titans of the tech industry, announced dividend increases. In addition, there were some truly shocking dividend increases announced as well.

Each month, in our dividend income summaries, we demonstrate the impact each dividend increase has on our forward dividend income. The following chart summarizes the impact of each dividend increase:

In total, we received dividend increases from 6 companies this month! My wife and I both own stakes in 4 of the same companies; therefore, the chart actually shows 10 dividend increases received. Dividend increases added over $50 to our forward dividend income!

I was truly shocked and blown away by Procter & Gamble’s (PG) 10% dividend increase. The company’s 5-year average dividend growth rate was in the low to mid-single digits prior to this year. My expectations were in line with their average. It definitely wasn’t for the company to announce a 10% haymaker! This increase was the largest we received in the month, adding $25 to our forward dividend income.

Many of the dividend increases were expected. Johnson & Johnson (JNJ) was in line with my expectations. Sadly, I had resided to the fact that IBM (IBM) was going to disappoint once again. Getting another sub 1% dividend increase was frustrating. I don’t like losing purchasing power for our cash flow, since the dividend increase is less than inflation. Oh, well.

Lastly, there was one surprise. Royal Dutch Shell (RDS.A). The company snuck in a 4% dividend increase at the end of the month. Thank goodness Lanny caught it, or I would have missed it. Earlier, I mentioned that it was the company’s third dividend increase since they cut their dividend last spring. It is looking like the dividend cut was a great move for the company to help preserve its balance sheet. Their results are looking great and cash flows are now getting a nice boost from the rising price of crude.

Summary

Another month is in the books. The dividend results were once again strong. I can’t wait until the day we receive over $1,000 in dividend income every month of the year. We still have a long way to go to realize this in the first month of every quarter. However, a 32% year over year increase compared to last year is a great place to start. Results like these continue to motivate me to invest as much as possible in the stock market, save every dollar, and continue building our dividend income and passive income streams!

Did you have a strong month of April? What dividend increases did you receive? What company paid you your largest dividend? Are you loving these dividend increases as well??

- Bert

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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