Wealth: January Dividend Income

Part of investing in dividend growth stocks is trusting in the process. There are going to be some good months and there are going to be some bad months. The trick is to try to align for dividend payments to be about equal every month. This is a trick that I have not yet mastered. As one can see from last years dividend payments, I might be a little off as far as consistency goes.

I can't give up though. The dividend snowball is a slow moving process at the start as you try to build up a good enough roll to get it moving. While months like this January may have felt small in comparison to some other months or small in comparison to where I thought it might be by now, it is still an amount of money that I wouldn't otherwise have.

It's good to keep this lesson at the forefront of my mind as I don't want to start straying from this path. If I think too much about other "get rich quick" schemes, I may find myself potentially falling for them and that just simply will not do! It simply will not do at all - not one bit! One has to remember the other types of dividends that have been given through the month.

Dividend Income: July

It's the beginning of another month and that means that it's time to tally the dividend payments from the previous month. All in all, it was a great month. I find that pretty much any time there is a payment incoming from AT&T (T), I can expect a fairly decent payment. It definitely helps boost the confidence moving forward that the strategy of dividend investing is a good strategy.

Where it may still not seem like a whole lot at a total of $28.25 for a whole month of dividends, it actually is a big enough amount to do something with. Hell, for a good portion of my portfolio, the stock price per share is less than that. That means that this last month provided for me the opportunity to add even one more share (theoretically) to the portfolio. With one more share there comes one more payment of dividends that further propels the snow ball forward.

I also want to remind myself with another month past that it is important to not bench mark your portfolio based on other investor's portfolios. Even though this can sometimes be a great motivator for future success, it can also give an unfair view of things as investing in dividends can be a very skewed curve when graphed out. The more dividend payments coming in, the faster the trend line goes up so it does not accurately represent a slow and steady trend upwards but more an increasing stream that will eventually become a roaring river. I just have to keep my eye on the prize moving forward and have faith that the small stream of income I've built will eventually pick up more and more speed. Anyways, here is the breakdown for the month:

July Dividend Income

RAI - Reynolds American Inc. - $5.88

STAG - STAG Industrial - $1.74

GE - General Electric - $5.75

T - AT&T - $14.88

Total July Dividends: $28.25

Recent Buy: Reynolds American Inc.

I talked about it and I wrote about it on my blog here just a few days ago. Just as a predicted, the price would be too good to pass up on Reynolds American Inc. That being the case, I had to pick up a few more shares for the Dividend Scythe portfolio. I was able to pick up a total of 17 more shares at $50.11/share which came to a total purchase price of $861.94.

This addition added a sizable amount of projected dividend income to the portfolio. At $1.68 per share in yield, this added a total of $28.56 to the projected annual dividend income. With this addition, the total projected annual dividend income moving forward is a solid $362.92. This should propel the portfolio much further as it will add further capital to future investments and further grow the snow ball.

This acquisition also helped me pass a major milestone. The portfolio is now officially over $10,000! It's taken a little while to get here but it's nice to see it finally hit five figures. I have my increased saving habits and better financial handling skills to thank for this milestone. Without them I would still very likely be in the four figure range and very likely still at the bottom or mid range at that!

I know this isn't a huge milestone compared to some who have been investing for a long time but for me this milestone is huge. It shows that I am capable of making the money add up. I look forward to the newer, bigger snow ball effect that will be seen in the future. Onward and upward is the way to go!

Chance to Buy More Sin Stock

As earnings were just released for Reynolds American, a cry was heard across the land as numbers missed for one of the first times in a very long time. Investors have started to run away from the golden pony that they once swore their allegiance to. This however is not the case for some that have their eyes on the longer game.

Yes, earnings were released for Reynolds American. Yes, they did miss what was expected of them. No, the stock is not suddenly a turn around in the wrong direction.

One must make sure to keep a level head in times such as these. It's easy to get caught up in the quick nightmares that the market decides to deal out. Many investors are keeping their eyes on single stocks and large caps, waiting for this so called recession to hit us. I do admit that I myself am in this boat but do I think that it has come and started with Reynolds American? Hardly.

The initial expectation for the stock was right in line for what they should have been expected to reach. However, they did have an acquisition that made their EPS drop just be a hair. Whenever this occurs, it is natural to assume that earnings would feel the hip check that is money moving from one to another to grow for the future. There is of course also talk about movement in the company with BAT - the Brits! This however I feel is a good thing. More heads in the game, more control, more money.

With that said, I feel that there is now another buying opportunity into the stock. As I have just moved my funds into the account to trade for the month of July, I may have to turn my eyes away from a new company acquisition and instead move to up my stake in Reynolds American so that I can profit more from the upswing that is almost certainly to come by either a take over or further expansion.

Recent Buy: Reynolds American Inc.

I'm like a kid on Christmas morning this week. My budget finalized, I sold a stock, and I obtained my revenue from SA published articles all in the same week. That means there is moolah (money?) to invest in all that I wish (if only that were really the case)! Therefore I have purchased another holding for the portfolio.

Today's purchase was in Reynolds American Inc. This is the holding company that brought Camel, Newports, and Pall Mall to your friendly neighborhood gas station and Walmart (WMT). They are even responsible for American Spirit (if you smoked that natural stuff). I may no longer be a smoker but I once was and my brand of choice was Camel. Without trying to sound too big on advertisements and plugs, the reason that I chose Camel over the other brands was for the taste and the price in relation to it. The taste was just perfect for the budget that I was looking to buy my smokes for. On the other hand, when I had very little available for smokes, I would reach for Pall Malls. It was no different for all of the friends I hung out with that smoked. Everyone preferred Camels or Pall Malls - not a single one smoked Marlboro. Maybe this was a case of you are who you hang around with but all the same, it all just seemed to depend on how much cash you had at the time of purchase.

I guess what I'm trying to get at is that these two brands alone made up the bag or pocket of almost everyone I met who smoked. After taking a look at the numbers released in both Reynolds American Inc.'s 10-K and Phillip Morris's (Marlboro), it appeared that I was not far off. The two makers comprise almost 100% of the market of cigarettes in the United States. The big difference between the two was that Reynolds American had a far greater profit margin (just above 55%) and their P/E has been on the rise rather than falling. Pair this with a better PEG ratio (1.73 for RAI) and a more comfortable D/E ratio and you've got yourself a better bet in the tobacco industry.

I may not smoke anymore but because I have in the past (a little more than I would care to admit), I have a great background for the product and the market they are trying to appeal to. This gives me a pretty good level of confidence that this will be a good long term investment. Granted, it's definitely not the healthiest or society friendly stock but I believe the company still has quite a future ahead of it and that makes it a good buy for the portfolio. Final compilation below:

Purchased 14 shares of Reynolds American Inc. (RAI) on 5/20/2016 @49.71/share

**This adds $23.52 in annual dividends to the Dividend Scythe