My Dividend Stock Portfolio: New May Dividend Record - 101 Holdings With 22 Buys (2024)

Portfolio Changes in May

My investment activity continued like clockwork in May as I managed to put around $1,900 into the market, still mostly focusing on Business Development Companies. I have been doing that for many-many years now and while I don't have the means to meaningfully increase that contribution, I am super happy about the level I am able to invest. That steady and consistent process gradually builds up a big portfolio I am really proud of. It has been a fascinating journey so far and the only regret I have is not having started earlier. That said, opportunities become fewer and fewer as BDCs continue to rally now that the market also realizes that there won't be any interest rate cuts anytime soon with inflation remaining sticky, although it has come down a bit.

My main picks were Ares Capital (ARCC), Hercules Capital (HTGC), Goldman Sachs BDC (GSBD) and MidCap Financial Investment Corporation (MFIC), I'm not expecting any dividend hikes for any of these stocks, but their current dividends are more than sufficient for my investment strategy. Instead, I'm hoping for some special dividends once the Fed starts cutting rates (although why they would do that anytime soon with the economy going strong is beyond me).

If we do get those special dividends, it could bring down stock prices, making the yields more attractive for future purchases. In May, all my moves added $149 to my yearly dividend income, kicking off the year on a positive note. My aim is to lift my dividend income by about $100 each month, mostly doable thanks to the high yields from BDCs.

Overall, the average yield on cost of my new investments in May averaged around 7.6%, reinforcing my belief in BDCs as a core part of my portfolio. I'm banking on their dividends staying steady - that's what I'm all about when it comes to generating income. Time will tell if I'm on the money or just overly optimistic.

All these purchases break down as follows:

All net purchases in May can be found below:

Dividend Income May 2024

Contrary to what I initially expected, dividend income did not hit a new all-time record in May and slightly trailed the previous year record of $1,112 as it "only" came in at $1,092.

Still, I am more than happy with that performance because the underperformance is solely due to timing. In 2023 big dividends from Sino, BASF and Sixt were all paid in May. Accounting for that and some favorable dividend payment schedules in 2024 such as that Medical Properties Trust (MPW) suddenly paid in May gives a clearer picture of overall dividend performance. Based on that, dividend income is up 13% Y/Y and 136% sequentially.

Monthly dividend payouts have come short of the $100 mark for the first time in 5 months but are expected to come in very strongly in June again. However, reaching my next goal of $150, excluding special dividends, still lies ahead as a significant journey. While my investment strategy doesn't exclusively center on monthly dividend stocks, my regular contributions to Realty Income (O) and Main Street Capital (MAIN) remain steadfast and will help that cause.

The biggest growth in dividend income in absolute terms undeniable can be attributed to Hercules Capital. This is a position I have started to build at the end of July 2022, and it already contributed a very solid $76 in dividend income a year ago. This year, following regular, consistent and sizable contributions basically every single week, it has grown into one of my Top 10 positions and its dividend income almost doubled to a staggering $137. I have no plans to stop investing into Hercules anytime soon, and remain very confident about their business and about future dividend prospects.

In alignment with my investment strategy, I've incorporated a BDC/Non-BDC breakdown into my dividend income charts. This addition allows for more precise monitoring of this critical development.

Additionally, I have created a new visualization that dissects dividend income into two distinct categories: BDCs and Non-BDCs. These categories in turn are separated by dividend payment frequency into Monthly (blue) and Quarterly (orange) in absolute and relative terms. In May 2024, BDCs accounted for just 17% of my total dividends, indicating that May tends to be a less BDC-focused month. This proportion will experience a significant surge in June when substantial BDC dividends are anticipated, and I can't wait for that to happen.

This metric is telling and will further guide me as it develops over time.

In May, the dividend income from my top three regular payers reached $175, a very modest increase from last year's average of $160. This is not really surprising as the only stock I am regularly buying of the Top 3 is Main Street Capital Corporation. I am not including Hercules Capital here as the stock unfortunately does not follow a regular quarterly dividend payment schedule.

All this is depicted below:

Here is a chart that shows the development of my net dividend income by month over time between 2015 and 2024. You can see the growth of my dividend income and the average annual dividend for each year:

This chart is my favorite because it illustrates the progression of my dividend income over time and allows me to easily see the average annual dividend for each year.

Next, I have plotted all the individual dividend payments I have received, coloring them by year and arranging the years side by side instead of horizontally as in previous updates. This visualization allows for a more comprehensive analysis of the distribution of my dividend payments over time.

By visualizing the data in this manner, we get a clear picture of how dividend payments are spread out over different years, offering valuable insights into the overall growth of my dividend income over the years.

This visualization is initially quite cluttered, but it contains a wealth of information. It shows every individual dividend payment I have received since I began my investment journey in 2015, represented as a circle that is colored and sized according to its contribution. The view is organized by month and year, allowing for a more comprehensive analysis of the development of my dividend income over time. For each year and month, a white rectangle indicates the average monthly dividend. The area where dividends fall below the average is filled in dark red, while the area above the average is colored dark green.

This type of data visualization allows for a detailed examination of the distribution of my dividend payments over time and enables me to easily identify trends and patterns in my income growth.

Now, zooming in on May, we can immediately see a number of big colorful circles in a sea of black. The bigger the circle and the bigger the distance to the previous circle for the same stock, the bigger is the change in dividend income compared to the prior years.

The most striking observation are obviously the three big purple circles from my German annual dividend payers and the visually easily decipherable massive dividend from HTGC.

Taking a closer look at the dividends for 2024, I'm pleased to see mostly purple circles at the top of the scale, exactly where I want them to be. These sizable purple circles signify an increase in dividend income, aligning with my goal of maximizing growth.

Overall, my aim is to observe numerous large orange circles positioned at the highest point on the scale. This signifies a positive trend of increasing dividend income, which is precisely what I'm striving for.

Another way to express the monthly dividend income is in terms of Gifted Working Time (GWT). Assuming an average hourly rate of $36.25 for 2024, my GWT and annual net dividends have been as follows:

• 2018: 121 hours GWT, $3,000 in annual net dividends
• 2019: 142 hours GWT, $3,600 in annual net dividends
• 2020: 152 hours GWT, $3,800 in annual net dividends
• 2021: 180 hours GWT, $5,050 in annual net dividends
• 2022: 229 hours GWT, $6,400 in annual net dividends
• 2023: 272 hours GWT, $8,800 in annual net dividends
• 2024: Targeting at least 248 hours GWT, $9,000 in annual net dividends

The overall target for the year with $9,000 in annual net dividends is very conservative, but I expect that I will have to take out some risk from my portfolio as I am eyeing to raise capital for real estate investments if I encounter the right deal. Still, as the year unfolds, I do expect to be able to pass that target and potentially even reach my next milestone of $10,000 as well. That would be a great achievement, but nothing I am banking on to reach this year - it would be the icing on the cake.

Across the years, my YTD Dividend Race has been as follows:

• 2018: Disappointing
• 2019: Phenomenal, benefiting from a low baseline in the prior year
• 2020: Fairly disappointing
• 2021: Phenomenal
• 2022: Much better than expected, fueled by the very weak euro
• 2023: Breathtaking
• 2024: Currently standing at 8% YTD and unsurprisingly down significantly from the 12% I recorded from January to April due to the effects mentioned above. Still, that puts me right in-line with my growth target and once June is closed that figure should again notably move up. With ongoing contributions to my holdings and the anticipated surge in June dividends, the outlook is bright. It's entirely reasonable to anticipate an annual dividend income soaring past $9,500 and beyond. If things go really well, I might even hit the 5-digit barrier of $10,000 but it is way too early to call that race.

I have updated the YTD Dividend Race chart to show the development of YTD dividend income on a daily basis, allowing us to see that most of my dividend income is generated mid-month and towards the end of the month. The chart also breaks down the development by month for the current year, making it easy to identify significant jumps in income.

Expressed in GWT, it presents itself as follows:

What this shows is as follows:

1. All time (blue area) - Around 1,323 hours, or 165.4 days, of active work have been replaced with passive income since the start of my dividend journey. Assuming a five-day workweek, this translates into more than half a year in total.
2. Full-year 2024 (green bars) - Around 115 hours, or 14.3 days, of active work have been replaced with passive income in 2024, which is basically equivalent to almost three full working weeks funded with dividends. That is great progress, and I can't wait to add another month to that statistic.
3. Highlighted in pink is the accumulated total at the end of the current reporting month (May).

This visualization allows us to see the overall impact of my dividend income on the amount of active work I am able to replace with passive income. It also enables us to see the progress made year-to-date, as well as the accumulated total at the end of the current reporting month.

Upcoming June Dividends

May was a spectacular month in terms of dividends thanks to the German companies. And June will be great as well. It will be one of the strongest months in terms of dividend income as it marks the end of the quarter and features many BDCs dividend payout dates.

Beyond that, further big dividend payers from my portfolio in June are my three biggest BDCs with Ares Capital, Hercules Capital and MidCap Financial Investment Corporation (MFIC) as well as Shell (SHEL), BP (BP), McDonald's (MCD), Johnson & Johnson (JNJ), Southern Company (SO) and many more in which I regularly invest small amounts via savings plans.

Overall, I am expecting more than $900 in dividend income and can't wait to see how the numbers will stack up in around 4 weeks.

At the end of May, my dividend portfolio is composed as follows:

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

Stefan Redlich