Happy Fourth of July to all the readers out there. As we celebrate United States independence, it is time for us to reflect back on Dividends!
From November 2016 till now, my wife and I have experienced many ups and downs but through thick and thin, the dividends kept rolling in. So without further adieu, lets get down to some numbers...
October 2016 - 10 different stocks/funds totaling - $352.25
November 2016 - 3 different stocks/funds totaling - $348.00
December 2016 - 6 different stocks/funds totaling - $228.47
January 2017 - 4 different stocks/funds totaling - $224.51
February 2017 - 4 different stocks/funds totaling - $362.21
March 2017 - 5 different stocks/funds totaling - $104.37
April 2017 - 2 different stocks/funds totaling - $87.15
May 2017 - 4 different stocks/funds totaling - $372.78
June 2017 - 4 different stocks/funds totaling - $205.02
So you might notice that every three months, on "off" months Nov, Feb, May, Aug, we are receiving over $350 in dividends. This is a bit skewed because of OHI. This power house is generating $1,400 of our projected $2,200 in dividends this year.
I realize that most people try not to put much weight/capital in one stock but with roughly $15,000 out of $65,000, our weight in the stock is 23%. Not terrible. But, due to high yield, we are making 63% of our dividends from this stock. Lets hope Trump leaves healthcare alone for a while and worries about bigger and better things like a wall... I kid, I kid. Ugh.
Either way, I am comfortable knowing that OHI is a well run business and I am a long term share holder in this company. Outlook seems positive with baby boomers growing older and the payout ratio is quite low for a REIT.
After paying off the mortgage, I wanted to keep a stock that still rolls in the cash and OHI fit that bill. I sold O due to the rally it experienced and kept OHI instead. Hopefully that move pays off because I am dripping the dividends back into OHI at these low prices. $1,400 a year at $35 is an extra 40 shares per year! Currently, we are picking up an extra $10+ per quarter due to dripping. That is intense!
I have also moved away from some other dividend paying stocks and into healthcare stocks. I currently own VHT, CELG, BIIB and VRX after proceeds from a VMGRX and PM sale. I know, I know PM is a long term wealth building machine but due to same reason as above... Trump and healthcare... these stocks have been beat down/kept in check for months now. I want to capitalize on any loosening of the chains and less government intervention to propel these stocks higher.
This might be timing the market but I like to think of it as buying when stocks are on sale. To me, this sector seems on sale compared to the rest of the market.
My wife and I are both maxing out our 401K's into general market tracking funds so I wanted to be a little more proactive with the taxable account. At the current time, these are all multi year holds unless something pressing comes up.
Below is an update to the graph!
Thanks for stopping by and let me know what you think!
ADD
ADD -
ReplyDeletePhew, man, that's a heavy weight in OHI, but if you are okay, then good. I know, though, it would be hard for me to be concentrated in such a finite space; but I tip my hat and want this to work out well for you. I haven't really changed my approach yet to my investments, so consistent and steady into boring stocks has been my path. Nice job and hope the DRIP on the OHI keeps churning like butter!
-Lanny
Churning like butter! You got that right!
DeleteI know I'm a pretty concentrated in the healthcare space now but hopefully it pays off. In the future when I have more funds, I'll be looking to get into the slow and boring stocks again. Just hard to see much value in a lot of them. Healthcare seems to be the most well valued at the time.
Keep it going mate, looks like you are making some great decisions, keep that DRIP continuing for many years to come and you will be the ultimate winner. Well done
ReplyDeleteDRIPing all the way to the bank. As long as OHI keeps up the same growth rates in the next 6-7 years as the last 6-7 years, I'll be sitting pretty. But the future is never guaranteed...
DeleteThanks for catching us up with your dividend totals from late 2016. As DD commented above, you sure are heavy in OHI. Personally, I don't want any one position in my portfolio to be greater than 10%. There are other great health REITs out there like VTR, HCN, LTC and more that could diversify you a bit from just OHI. Nice update!
ReplyDeleteYoure welcome, Keith. I apologize for not keeping everyone updated every month. Its just been hard to make time for the blog. Life keeps getting in the way!
DeleteYes, looking into other great health REIT's is a way to diversify. For now though, I am comfortable with OHI. If the stock grows to its all time high again I will most likely start to spread the capital out a bit. At that point, I'd be over $20,000 in one stock - or about 1/3 of the portfolio.
Wouldn't worry about the weight in OHI - in two years of accumulation, no matter what the stock market movement, it will be a much smaller fraction of your portfolio/net worth.
ReplyDeleteKeep building assets and the rest will take care of itself.
Very true. If the stock was to take off to all time highs I will look to diversify. But, currently, between my 401k and my wifes 401k, it is just a small percent of our portfolio.
DeleteLets just hope the government doesnt intervene too much in healthcare and that OHI management stays vigilant of any changes
Thanks for the update. I tend to agree with Keith and writing2realty above... :) All good.
ReplyDeleteThanks! I feel comfortable with the weighting for now. Things always tend to change though. Never thought I'd pay off my mortgage and fall to only $60,000 in stocks so you never know what the future might hold.
DeleteThat's some heavy OHI weighing! I think you're a bit riskier than I to hold that much on in one stock but it looks like it's paying off with the dividends right now.
ReplyDeleteFor now, things are working out. I've never had this much weight in one stock either so its uncharted territory. In the future, things could change. With so much in 401k and mutual funds now though, its still a small percentage of the over portfolios.
DeleteVery nice graph! You're doing great! What percentage of your portfolio is the REIT? Mine is under 2.5% but I recently added more.
ReplyDeleteJust had a look at Ohio and it seduced me to write an option.
ReplyDeleteHaving such a big position that delivers the majority of your income is an item to follow up close.
It all adds up. Keep going. I do mainly S&P ETFs, so I never have to sell and get capital gains to pay tax on. No commissions and low expense ratios. Never have to worry about a stock getting out of favor. I get over $2K a month now, and all still reinvested.
ReplyDelete