Another day, another dividend.
Despite everything that has happened with the economy due to Covid-19 thus far, my portfolio has finally turned green (at least for now).
As a long-term investor who focuses on a mix of dividend and growth stocks, the fluctuations in the market didn’t have any effect on me because I know in the long run everything will be okay
The economy has faced economic recessions all throughout history and has bounced back stronger than ever following those downturns.
In fact, during this most recent downturn, I have been investing as much as possible to snatch some good deals on the market.
Here is an overview of my portfolio to this date:
Portfolio Value: $8,740.88
Money Invested: $8,500
Dividends Earned: $93.00
My M1 Finance Pie
My investing strategy:
- Invest for the long-term
- Diversify holdings
- Don’t let emotions take over
- Invest as much as possible early
- Prioritize stocks that pay dividends and have growth history
Since day one, I have followed the five-point strategy above because I believe in the principals of each point through what I have learned and researched.
Best Performer
By a large stretch, Apple (AAPL) has been my best holding. I have 1.03 shares of Apple and have been investing in it from the very beginning back in January of 2020. Apple has given me a generous 79% return.
Although the dividend yield is on the lower end at about 0.71%, the capital gains potential is exponential. I have always loved Apple as a company because I believe in Steve Jobs’s vision and they simply make great products. I have been using my iPhone for 4+ years and Macbook for 6+ years and they still operate just as good as when I first got them.
Worst Performer
The energy sector overall hasn’t been performing well and the worst-performing stock I own is Exxon Mobil (XOM). I am down over 18% since I began investing in XOM back in January of 2020. I had mainly invested in XOM due to the high 8% dividend yield.
This is the very reason diversification is one of my investing rules. While XOm provides me with good cash flow in the form of dividends, other stocks like Apple and Microsoft provide me with good capital gains.
Stocks I Added
Aflac (AFL)
I know about Aflac from their annoying duck commercials (actually good marketing) but I never knew just how good their stock was. Aflac is a dividend aristocratic that has grown its dividend for 38 years.
Anytime I have seen a company grow its dividends for longer than I have been alive, I am instantly intrigued. Just put this into perspective, 38 years!
The US Economy alone has had three big recessions starting with the 2000’s dot com bubble, the great recession of 2008 when the real estate market crashed, at the most recent Covid-19 recession. Continuing to increase dividends during these times is simply impressive.
In addition to dividends, Aflac has seen historically great growth. Since 1990, Aflac has grown steadily and this fits perfectly into my investing strategy. Due to Covid-19, the price of Aflac has dropped from about $53 to $35. Luckily I discovered Aflac right after their massive dip and picked it up for an average cost of $35.33 per share.
Genuine Parts Company (GPC)
Much like Aflac, I didn’t know much about the Genuine Parts Company company. After further research, I found their company to fit perfectly with my investing strategy.
GPC has been increasing dividends for 63 years! This leaves me speechless. How a company can keep increasing dividends year after year for 63 years is beyond impressive. The current dividend yield is 3.34% for a total of $3.16 per share at the time of this post.
Their stock growth is pretty decent as well. Over the past 5 years, GPC has seen a return rate of 6.88%. Extending the timeline since 1990, GPC has seen linear growth which bodes well in my opinion. I was able to get 3.7 shares of GPC for $86.65 per share.
Microsoft (MSFT)
Let’s face it, Microsoft is a great company with products used all over the world. They are pioneers in the technology industry and are always innovating to stay ahead of the curve.
Microsoft is a growth stock, plain and simple. I knew adding this to my portfolio would take away from my overall dividend yield but would give me a great opportunity in the future for exponential growth.
Surprisingly enough, Microsoft actually does pay a dividend! I was quite surprised to learn Microsoft does reward shareholders with a dividend of about $2.04 per share at the time of this post. Not only do they pay a dividend, but they have been growing their dividend for 16 years!
A combination of exponential share price growth and constant dividend growth, I had to get my hands on Microsoft stock.
Amazon (AMZN)
As long as Jeff Bezos is running Amazon, I will invest in the company. Amazon is a company I have thought a lot about since I started my portfolio. At first, I didn’t invest because I knew Amazon paid no dividends and knew it wouldn’t contribute to my goal of passive income from a dividend point of view.
However, when I take a look at the world today, it is shifting online. In my opinion, the best companies to invest in are the ones who will have a strong online presence in the future. Amazon is undoubtedly leading the online retail landscape and has been doing so for some time now.
Amazon simply makes life easier because they sell so many items and deliver in one day. Not only does Amazon sell stuff, but it has also created a platform for individuals to contribute and add to the experience.
Fulfillment by Amazon (FBA), print on demand, Kindle direct publishing (KDP), and many more have given everyday people the opportunity to create and sell on the Amazon platform.
I don’t see Amazon slowing down anytime soon and I had to grab my small share of the company. Luckily with M1 Finance, I was able to grab a massive .024 share of stock. Amazon is very expensive right now with a value of over $3,000.
I don’t want to put all my eggs in one basket and spend $3,000 on Amazon, I would rather purchase a fraction right now and ride along even if it’s not a full share. Amazon is one of the greatest growth companies we have seen and I don’t want to be left out. Big thanks to M1 Finance for allowing fractional shares!
Stocks I’m Considering
NextEra Energy (NEE)
NextEra Energy is an energy company focused on renewables and has grown substantially over the past 10 years. Not only has the stock price grown exponentially, but NEE has also been increasing dividend payouts for the past 25 years.
The dividend yield is hovering around 2% which is a little low for my liking but still pretty good considering how growth-oriented the stock has been.
As Dominion (D) is slated to cut their dividends in December, I will allocate some of my holdings in Dominion over to NextEra Energy in the hope the growth will continue and pick up my recently lacking energy pie.
Broadcom (AVGO)
Broadcom builds semiconductors for a multitude of industries and has grown its dividend and stock price steadily over the past 9 years.
With a healthy dividend yield of 4% and being a tech company, it will fit nicely in my tech pie right along with Apple, Microsoft, and Amazon.
While I am not overly familiar with Broadcom, my initial analysis seems like it’s a good buy right now. I am very excited to see where this holding will be in 10 years.
Portfolio Direction
There has definitely been a slight shift towards growth as opposed to dividends in my portfolio but dividends will always be the driving force.
With the addition of Microsoft and Amazon, I am sacrificing dividend yield but these are companies I really believe in. Besides, my holdings for Amazon and Microsoft make up just a few percent of my entire portfolio.
My ultimate goal is to generate enough passive income where I don’t need to work a 9-5 job and live the life I truly desire. Dividends help me see progress each month towards that goal and each penny invested motivates me all the more.
