February is in the books. Each month, we share our dividend income results. This article will feature Bert and his wife’s February dividend income total. Plus, we will share a few portfolio observations!
Why I Invest in Dividend Stocks
I invest in dividend stocks to grow a my passive 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 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 down hill. 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.
READ: How To Maximize Your Cash – 4 Simple Methods!
The 3 primary savings accounts I use are:
- SoFi – 3.75% APY on all savings accounts (2.5% on your checking account). The race for deposits is INTENSE! Banks and credit unions are offering great savings rates.
- Capital One 360 Savings – 3.40% APY – We use Capital One for our checking and savings account.
- Weathfront – 4.05% without promotion. 4.55% with an extra .5% by signing up using my referral link (Click Here).
Read: Interest Rates on High Yield Savings Accounts Are SOARING!
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.
Watch: Dividend Diplomats’ Dividend Stock Screener
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 February Dividend Income Summary
We received $826.12 in February dividend income! Unfortunately, my dividend income decreased 5.45% this month compared to last year.
The following chart shows the individual dividends received during the month by each company. This will help us identify WHY our dividend income decreased this month compared to the previous year.
As always, I share some observations about our February dividend income. Here are some key observations from our strong month to start the year!
Observation #1: The AT&T Dividend Cut Still Burns
Man, we are still feeling the pain from AT&T’s dividend cut last year. If you recall, AT&T slashed its dividend 50%+ in 2022!
In fact, the main reason our dividend is down this year compared to last year is due predominately to the AT&T dividend cut. Last February, I received $105 from AT&T and my wife received $92. That is a total of $197. This year, we received only $112 from the telecom giant.
An $85 decline in income is very difficult to overcome. Clearly, it is still a challenge for us. In order to earn that dividend income back in the second month of each quarter, we would have to purchase $11,333 of stock with an average yield of 3%. That’s a lot of capital to concentrate in stock.
We have made some progress over the year. We increased our investment in Citibank (C), Starbucks (SBUX), and Verizon (VZ) while starting a new position Texas Instruments (TXN). Still, despite those efforts, we were not able to overcome the devastating dividend cut from AT&T last year. That’s why we hate dividend cuts so much (thanks a lot Intel).
Observation #2: Building Substantial Positions
One of my investing goals going forward is to build larger positions in my portfolio. I’m tired of receiving “small” dividends from positions that are not considered full. If you look at the chart above, the smallest three individual payments were from Provident Financial (PFS), Starbucks (SBUX) and General Dynamics (GD). The only reason there is a small Starbucks dividend is because it is in a retirement account for my wife instead of her traditional account (where the larger SBUX positions is held).
Luckily for me, the banking sector is providing some great value right now. This may be an excellent time to build my wife’s Provident Financial position. It would be great to eventually receive at least $100 per year from them. General Dynamics, unfortunately, will have to wait a little because of the company’s current valuation. There are too many other cheaper stocks available to focus on adding to this position.
Summary – February Dividend Income
We are marching towards crossing the $1,000 per month threshold for the second month of the quarter. There was a slight step back this year, compared to last. However, I’m still really pumped up that we were able to earn $826 in February. The journey to financial freedom is a long road with many twists and turns. We’ve learned a lot over the years and will continue growing and learning every day. For now, lets enjoy our successes but not lose focus. Time to keep pushing!
How much income did you receive in February? Did you set a record? Are you still feeling the impact of AT&T?