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Dividend Stock Portfolio Midyear Checkup


Sadly, I have been neglecting our dividend portfolio this year. We have been so busy with our rentals that I haven’t paid attention to our other “passive income” streams. Fortunately, the sales of our rentals are now completed so I can give our dividend portfolio a thorough midyear checkup.

I have got to say the dividend portfolio is my favorite passive income stream at the moment. It doesn’t require a lot of maintenance and I know the dividends will keep rolling in. These companies are pretty solid and even if the price drops a bit, I’m pretty sure they will recover in time. Rental properties require much more active work. Let’s see how we did so far.

dividend stock growth income

Our dividend is rising a bit every quarter as planned. I love it!

Dividend Income

In 2013, we made $8,036 from our dividend portfolio in the taxable account. For 2014, I’d like to generate about $9,000 from our dividend portfolio and reinvest most of this.

My strategy for this portfolio is to invest in solid stocks with good track records of dividend growth. I plan to minimize trading and will sell only if the company cuts income or is imploding. I meant to update this spreadsheet every quarter, but life has been crazy this year, so I didn’t do it at the end of Q1. Anyway, here is the midyear update so we can see how our dividend portfolio is doing compared to VIG (Vanguard Dividend Appreciation ETF).

dividend stock growth income retirement

All right! We did pretty darn well so far this year. Our dividend portfolio is returning about 10% including dividend. As a comparison, VIG gained about 4.5% including dividend. I have been contemplating moving our investment to VIG if I can’t beat it (which I didn’t in 2013.) It’s looking good this year, though.

barbieBig gainers/losers

  • Intel had a big run up recently and that gave the total ROI a big boost since it’s such a big percentage of our portfolio.
  • Shell also did pretty well and that’s our 2nd largest holding. They also increased their dividend payout so that’s another great news.
  • Eli Lilly went up over 20%. I’m not sure what happened there.
  • National Retail Property REIT increased over 20%. I guess the property market is recovering all over the country.
  • Mattel went down quite a bit. Apparently, the toys didn’t sell well during Christmas and the stock took a big tumble. Barbie is getting less popular and the new Entrepreneur Barbie probably isn’t going to help much.

Things look pretty good in general and I’m not overly concern about any investment in particular. Well, I highlighted a few investments in the last update so we’d better go over them again.


Intel is a big chunk of our dividend portfolio. I probably need to sell at least half and invest the proceeds in different stocks to diversify. I used to work for Intel and obtained these stocks at a discount via grants and the employee purchase plan. My average cost basis is $9.11 so I’m not looking forward to paying the capital gain tax.

2014 is a particularly bad year to pay tax for us because we just sold our rentals. Intel also seems to be doing better, so I’ll probably wait until 2015 to sell.


In 2012, Kraft Foods spun off into two companies – groceries and snacks. Mondelez International manages well known snack brands around the globe such as Oreo, Cadbury, and Trident. Kraft had a great track record of increasing their dividend payout, but it looks like Mondelez is struggling with their dividend a bit. The current dividend yield is only 1.6% and it is increasing very slowly. On the other hand, MDLZ did very well since the spinoff and gained 32% in 2013. I’m not sure what to do about this one… I’ll just hold on to it for now.


VWO and VPL are international ETFs from Vanguard. I like them, but they are not a good fit for this portfolio. I sold VWO to buy Target at the end of June. If I see another stock I really like, I’d probably trade in VPL.

Midyear recap

All in all, it’s been a great half year for our dividend portfolio. We caught a lucky break and our two biggest positions, Intel and Shell, went up quite a bit. On the losing side, only Mattel had a significant drop and I’m not worried yet. I don’t DRIP so I have a little cash accumulating in this account and I’m thinking about adding more position in KMP.

Anyway, I’m very happy with our dividend portfolio so far, but I’m bracing myself for a correction. I don’t need to sell off anything when the stock market drops so I just need to prepare for it mentally. Note to self: Don’t panic sell.

Do you have any advice for our dividend portfolio?

Note: Our dividend portfolio is in our taxable brokerage account. In our retirement accounts, we invested in low cost index and bond funds.

Disclaimer: This is not a recommendation. My stock picking track record isn’t great so you need to do your own research. This post will help us keep track of the gains and dividends to see if they meet my passive income goal. If you need help with financial planning, consider signing up with Personal Capital. Personal Capital will help you keep track of all your investments in one place and can hook you up with a personal financial adviser as well.


Disclosure: If you sign up with Personal Capital, we may receive a referral fee depending on the size of your portfolio.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.

Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.

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{ 29 comments… add one }
  • Michael August 20, 2014, 10:38 pm

    My mistake. You do have a position in NNN.

  • Michael August 20, 2014, 10:34 pm

    Joe, curious about your opinion on REITS, specifically net lease? Guessing you’re not too keen considering a zero stake in your portfolio.

  • Michael August 20, 2014, 10:31 pm

    Great site and a nice looking portfolio. Wishing you the best in your journey to freedom.

  • EL August 13, 2014, 6:01 am

    If you understand Dividend investing and do not get involved with excessive trading, individual stocks offer more return and control. Plus the companies are hesitant to cut dividend payouts for individual stocks, because it will make public headlines, whereas the slashing of dividends for mutual funds is not usually in the media.

  • Ken July 27, 2014, 9:44 am

    I have been investing for only two years dividend stocks are way better than ETF personally I have recently purchased PSEC and CHMI for a little higher return I believe them to be quite solid but with a little risk. I feel it is worth it although I keep tabs on them regularly more so than MCD or Shell

  • Syed July 16, 2014, 8:18 am

    I’ve just recently learned about the wonderful world of dividend investing so this was a really fun read for me. Seeing your dividends grow year after year until they can cover your expenses sounds pretty amazing. Any specific broker you would recommend? I’m leaning towards Sharebuilder since I already have my checking with Capital One 360 and they have pretty low trading fees. Thanks for the great post.

    • retirebyforty July 16, 2014, 11:39 pm

      I hear share builder is pretty good. Vanguard also have low fee so check them out. I also use First Trade.
      Good luck!

  • Dividend Diplomats July 13, 2014, 11:06 am


    Nice work with the dividends! I am hoping that Intel provides a little boost this July to their dividend payout, as they didn’t last year, but the appreciation to the stock is always nice. I see that diversifying that out would be a good idea – you could also pick up a few stocks that are yielding slightly higher than intel as well, such as more Telecom, Utilities or Tobacco. Nice job and I’m sure you’ll crush $9K in dividend income this year! Also – I just posted about Mattel as well, and have been debating about initiating a position into them, as they are down quite a bit. Thoughts?


  • Eli July 11, 2014, 5:46 pm

    I’m wondering what the advantages are for picking individual stocks vs buying a Dividend Appreciation fund as someone else mentioned.

    • retirebyforty July 12, 2014, 12:29 am

      Well… I’m hoping to beat the fund. If I can’t beat the fund consistently, then I’ll eventually transfer everything over. You also have more control, but maybe that’s just an illusion…

    • The Dividend Guy July 12, 2014, 6:22 am

      dividend ETFs are good for investors who don’t want to manage their portfolio. You buy a single ETFs, get plenty of stocks inside paying dividend and you don’t do anything.

      However, if you have the interest and knowledge to invest in individual stocks, chances are you can beat the ETF. I’ve done it year after year since 2012 (when I started to track my returns vs an ETF).

      Both strategies are good, it only depends on the type of investor you are.

  • Ed July 11, 2014, 5:45 pm

    Consider Vanguards VYM etf with a 3% dividend

  • Dave July 11, 2014, 5:19 pm

    Dividend payout ratios are an important factor. Check out this blurb from wallstcheatsheet.com, which concerns one of your holdings, Kinder Morgan:


    • Dave July 11, 2014, 9:48 pm

      Technical difficulties. Here’s the quote:

      Companies can get the cash to pay dividends from all sorts of sources. Some of these sources indicate that the dividend may not be sustainable or that it is not the product of value creation. There are several companies that have paid dividends by issuing stock or by borrowing money.

      For instance one of the most popular dividend paying stocks among income investors is Kinder Morgan Energy Partners LP. If you look at the company’s earnings per share, and then if you look at its dividend payout, you’ll quickly see that in most quarters the company hasn’t made enough money to pay its dividend. For instance in the most recent quarter Kinder Morgan’s EPS came in at $0.67 per share, but it paid $1.38 per share in dividends. The additional money had to come from somewhere. It turns out that the company issued nearly $1 billion worth of debt, and the average number of shares outstanding in the first quarter increased by 8 million versus the prior quarter. This indicates to me that Kinder Morgan’s dividend is not coming from profits. Rather it is coming from capital raises.

      • retirebyforty July 12, 2014, 12:33 am

        Thank you! I’ll hold off adding anymore KMP for now…

      • Dan July 13, 2014, 10:45 am

        this is how KMP and Kinder Morgan in general has always run their business. It is nothing new. Reading their financial statements using EPS is not an appropriate way to evaluate the stock. You’ll note on the Q1 cash flow statement for example that $1,074 (million) of it’s income comes from operations (or $2.40/unit, more than a dollar over their distribution) and that a large portion of its “expenses” are capital expenditures and business acquisitions for the future of the company.

        It is a growth MLP, not a blue chip manufacturing stock. The analysis of their operations is much more involved. The analysis highlighted above is rudimentary at best.

        • Dave July 13, 2014, 7:59 pm

          Thanks, Dan. I claim no special knowledge about KMP. My DRIPs are much more straightforward: P&G, McD, WMT, etc.

          RB40, thanks for tipping me off to VIG. I’m going to open a brokerage account with Vanguard this week. (Already have the IRAs there.) It was very interesting to compare online the top ten holdings in VIG (Dividend Appreciation Index), compared to their MGV (Mega Cap Value) and MGK (Mega Cap Growth). With a Vanguard account, you can buy their funds with NO COMMISSION! Maybe I’ll auto-invest some in each of the Mega Cap funds, plus a little in their REIT index. Maybe an ETF for precious metals, too? Like a kid in a candy store, I guess…

          As someone else pointed out, yes, you may be able to beat the index with individual picks; but there’s greater “friction” (costs) in setting up multiple smaller positions. If you decide you’re going to “concentrate” your portfolio to avoid that hassle, I hope you choose a McDonalds and not an Enron!

  • Dave July 11, 2014, 4:03 pm

    RB 40, are you certain about that tax bill? Long term capital gains tax rate is 0%, so long as taxable income (not adjusted gross income) meets the limits. This change was made permanent in 2013.

    • retirebyforty July 12, 2014, 12:27 am

      Last year we had 0% tax on our dividend. That was great! This year we sold the rentals and that’s long term capital gain and it will push our taxable income way above the 15% bracket. I’ll hire a tax accountant next year. Tax is getting way too complicated for me.

  • Dividend Mantra July 11, 2014, 10:35 am


    Great looking portfolio there. And it looks like you’ve had pretty strong performance YTD, as INTC has been on a run.

    That’s also a very nice yield you have across the portfolio, which is sizable. Good stuff!

    I would personally start to average out of INTC, but you have to find what’s comfortable for you. Selling off blocks would allow you capital to reinvest elsewhere, although I understand your hesitation in regards to taxes. I also don’t sell often, but I’d rather pay taxes on a big gain than pay no taxes because I made no money.

    Keep up the great work!

    Best wishes.

    • retirebyforty July 12, 2014, 12:22 am

      You’re right about INTC. I just sold some today to take some profit. The cash will come in handy, but it’ll be tough finding good dividend stocks now. I’ll have to visit your site more often to get some ideas. Thanks!

  • Mike @ Dividend Stocks Rock July 11, 2014, 8:34 am

    Hey Joe,
    Congrats on your mid-year update, +10% is very good!
    IMO, INTC is a value trap and I would get rid of a part of it now that it’s trading at a high price. The main reason why shares jumped was because PC sales went up. I’m not convinced this is a long term trend though… the stock could take another hit later on.

    As for LLY, their profit drops on expiring patents (that’s the name of the game in this industry) but EPS was higher than expected. The company has a very interesting pipeline right now and analysts expect LLY to launch more products.

    I’ve sold MAT a few months ago in our portfolios mainly because we don’t see when the company will recoup its 20% loss from January (when they posted their bad sales results). I’ve preferred investing in Helmerich & Payne (HP) a drilling company. Take a look; the dividend yield is not much (2%) but the growth potential is there (for both stock value and dividend payouts).


    Dividend Stocks Rock

    • retirebyforty July 12, 2014, 12:21 am

      Thanks for the advice. Actually, I always regretted it whenever I waited to sell INTC. I just sold off some shares today. Thanks again for the kick in the pants. I read up a bit and actually I think it’s the server sales that went up. That’s a pretty lucrative segment for Intel.

      I’ll check out HP. 2% is pretty low though…

      • The Dividend Guy July 12, 2014, 6:19 am

        Just think HP went up by 73% in the past 12 months and its dividend payout was increased by 37% 😉

        Over the past five years, the quarterly dividend went from $0.05/share to $0.685/share.

        You won’t receive 2.50% dividend yield for long 🙂

  • David July 11, 2014, 7:15 am

    For your dividend portfolio, I was surprised that you didn’t have any super dividend stocks in your list. You don’t have to post this comment or you can delete the symbol, but I have owned PNNT (Pennant Park) in the past and plan on adding it a little at a time until I retire. The dividend is 9% and it seems like a well run operation. It has held its value, even during the great recession. Something to consider. Thanks. I hope to retire by 55 (I’m 46).

    • retirebyforty July 12, 2014, 12:19 am

      Thanks for the recommendation. I will check out PNNT. I haven’t heard of them. Good luck with your retirement plan.

  • Scott July 11, 2014, 7:15 am

    You might also look at Vanguard Dividend Growth Fund VDIGX. It’s a managed fund but has a fairly low expense ratio.

  • Retire Before Dad July 11, 2014, 4:34 am

    Your INTC situation is quite a dilemma. Instead of selling half in 2015, you could sell 100-200 shares a year over the next few years, as long as you still believe it’s a safe stock. That would spread things out a bit. Do you believe in it more or less as a stock because you worked there?

    • retirebyforty July 12, 2014, 12:18 am

      That’s a good plan. I’ll sell off a bit at a time. I think the company will do fine in the future, but probably not outpace newer tech companies.

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