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Our first dividend income summary for 2024 is finally here! Bert shares his January dividend income total with the community. He and his wife are closing in on $1,000 in dividend income in an “off month.” This article will detail our dividend income total and show how we grew our income by 15%+ compared to last year.
Why I Invest in Dividend Stocks
I invest in dividend stocks to grow my passive income with dividend income. One day, my dividend income will be large enough to cover my monthly expenses and allow us to retire early. That is why we are always relentlessly searching for undervalued dividend stocks to buy. To put our hard-earned cash to work.
We save a high percentage of our income each month to help fuel our dividend stock portfolio. Having a high savings rate is a key pillar of our strategy and helps fuel the fire and push the snowball further downhill. While we are waiting to invest our money in the market, it is earning a high interest rate in accounts. There is nothing more critical than maximizing every dollar in your savings account.
The 3 primary savings accounts I use are:
- SoFi – 4.6% APY on all savings accounts (lower for your checking account). The race for deposits is intense! Banks and credit unions are offering great savings rates.
- Capital One 360 Savings – 4.35% APY – We use Capital One for our checking and savings accounts.
- Wealthfront – 5.0% without promotion.
How Do We Find Dividend Stocks to Buy?
That’s easy. We use our dividend stock screener with every stock purchase! 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.
The three metrics of our screener are:
- Price to Earnings Ratio less than the S&P 500
- Payout Ratio less than 60%
- History of Increasing Dividends
- Dividend Yield (bonus)
We use this stock screener for each purchase and have consistently done so for 10+ years on our journey to financial freedom!
Bert’s January Dividend Income Summary
We closed out the month in style, that is for sure. In January 2024, we received $6851.67 in dividend income! This was a nice 15.67% increase compared to last year.
We continue to see strong dividend growth annually. Over the last five years, our January dividend income has nearly doubled (compared to January 2020). I’ll take doubling our income over a half-decade period. Putting the last 5 years of annual dividend income in a chart in this article will help me start appreciating the long journey that we are on and all the progress we have made over the years. It is easy to get hyper-focused on the last few years without taking a step back and appreciating everything we have done. Hopefully, at this time next year, we will see that blue bar cross the $1,000 threshold.
The following table shows the individual dividend payments we received this month.
Each month, we share a few observations about our dividend stock portfolio and the dividend income received. We noted the following:
Observation #1: Leggett & Platt May Drip its way to $100 per quarter
Leggett & Platt (LEG) was the highest dividend payer this month. We received nearly $100 in January from the dividend king. I haven’t purchased shares in a while. However, the DRIP continues to produce a strong income stream. At its current price, I am dripping 4+ shares every quarter.
The big question is whether or not the dividend will hold firm. It has been a rough year for LEG, and the stock price has tumbled. With a payout ratio that is creeping up, can this high dividend yield be sustained? If so, I may find myself staring at a $100 per quarter dividend from LEG in the face.
Observation #2: A High-Quality Dividend Month
We received dividends from some high-quality dividend-paying stocks. Dividend Kings and Aristocrats make up a solid amount of the list. PepsiCo (PEP) jumps out because the company continues to pay a strong, growing dividend. In fact, they announced a 7% dividend increase in December, which we expected them to. Even Cardinal Health (CAH), a Dividend Aristocrat, paid us over $50 per share.
Now, the goal is to keep adding great dividend stocks and growing our passive income. That’s the million-dollar question.
Observation #3: Trimming the Small Positions
I’m finally clearing out the small dividend-paying positions each month. I no longer own my smallest dividend payer, Orion Office REIT (ONL). This stock paid us a dollar per quarter and doesn’t fit our investing metrics anymore.
Now, the question is what to do with Paramount Global (PARA, PARAA). The acquisition rumors continue to swirl. The stock continues to remain at lows and pays us less than $5 per quarter. At the moment, I’m holding and waiting to see what comes of a potential buyout. If the dividend isn’t going to grow, I might as well wait to see if one of the buyout offers comes true. Then, I’ll at least benefit from a nice pop in share price.
Summary
I couldn’t be happier with a 15% year-over-year growth rate in January. Our January dividend income continues to grow, which is important in an “off month.” The goal is to keep saving and keep investing. Then, we will push our income higher and higher to one day cover our expenses. That’s the goal and plan to reach financial freedom. It is encouraging to see the DRIP in action, and the power of dividend reinvestment continues to take shape.
How much January dividend income did you receive? What was your total? Which stock was your top dividend-paying stock?
Bert
Original Post
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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