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19May/130

Dividend Calendar – Filling in the Gaps

Having the ability to visualize the longer term outcome of this project can be motivating, or so I found out when I decided to sit down and create a dividend calendar. Since my objective is steady monthly income I wanted to avoid certain months where my holdings were cranking out more cash than other months. In my case it happens the June-September-December-March cycle seems to be the most popular. It can be pretty straight forward to do one in your favorite spreadsheet software, and even extend it further by crunching numbers: I have mine connected to two spreadsheets tracking two brokerage accounts where I maintain my expected dividend payments, then calculating the total expected income for each month.

Here's a snapshot:

  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ABBV   X     X     X     X  
ABT   X     X     X     X  
ADP X     X     X     X    
BP     X     X     X     X
CLF     X     X     X     X
ED     X     X     X     X
F     X     X     X     X
GE X     X     X     X    
HCP   X     X     X     X  
INTC     X     X     X     X
KMB X     X     X     X    
KO       X     X     X   X
MCD     X     X     X     X
MKC X     X     X     X    
MO X     X     X     X    
PEP X   X     X     X      
PM X     X     X     X    
SYY X     X     X     X    
T   X     X     X     X  
VFC     X     X     X     X
WMT X     X   X     X      
XOM     X     X     X     X
YUM   X     X     X     X  
  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Count of Divs 9 5 9 9 5 10 8 5 10 8 5 9

As you can see it's not a very smooth distribution, so I've got to find some Feb-May-Aug-Nov stocks start, let's see what's out there:

Proctor & Gamble (PG) follows this schedule, and at 2.9% yield with 51% payout ratio it seems a good pick. I think it's a bit expensive at the moment. I've held this in my Roth for almost two years so I've been watching its steady rise, I wouldn't add to it. I just reinvest within my Roth. I do not include my Roth holdings in this calendar because I'm not 60 years old, it's irrelevant until then. I may consider adding this to the taxable accounts, but maybe if the price pulls back 10% or so. The next dividend should be announced in early July, with an anticipated ex-div date around July 17.

Colgate Palmolive (CL) competes in the same industry and has the same dividend schedule. I do not own this, but have been looking at it the last few months contemplating whether or not I'd be overexposed to this industry/sector if I buy it. But, I own KO and PEP, so what the heck. It's got a healthy yield of 4.1% but a confusing payout ratio of 104% according to my source...I'll have to look into this. It's trading at it's year high, so I'm hesitant to jump straight in, but the ex-div isn't until around July 22 so I have time to sort it out.

Clorox Company (CLX) is another household consumer goods type company with a 2.9% yield and 60% payout ratio. I'm noticing a theme here with this industry and their dividend schedules. CLX recently increased it's dividend 10.9% from $0.64 to $0.71 per share. It's also trading near highs, but hey, what isn't. Next ex-div July 22.

Hormel Foods (HRL) is another one. It's got a low yield of 1.5% but with a payout ratio of only 34% it's got room to move up. This is also due to a pretty heavy run up in share price, at it's 52 week low of $26.79 the yield was a reasonable 2.5%. However, I don't think I'd be thinking about yield on this one if I had bought at the 52 week low, I'd be up 63% in capital appreciation by now and I'd probably have either sold or been assigned options. The ex-div is anticipated to be around July 19.

Those are four solid dividend aristocrats to increase my income during these months and balancing out the frequency distribution. July may seem far away, but it's always good to have these things in mind when you're allocating funds for upcoming moves. With the right planning and funding, I can add all four of these in July. The cost to buy a 10 share block of each at Friday's closing price would be approximately $2,725, netting $21.615 in extra income for August, or about 3.17% average annual yield. 

 

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