First Quarter Dividend Income

£347. That is the amount I received over the first three months of the year. Considering I only received £120 in the same period last year, I can safely say that my dividend strategy is slowly chugging along and proving to be successful.

Yes, part of the increase from £120 to £347 is due to adding more money into my portfolio and buying more stocks. But the other part which is much more satisfying is the fact that the companies I own raised their dividends without any effort from me – more money for doing nothing other than holding shares in wonderful businesses. Sure, I’ll take that.

So what does getting a higher income really mean? It means I am achieving the goals I set out to accomplish back in 2014. It means that by staying focused on high quality companies I was able to ignore the market volatility, ignore the critics who told me I was doing it wrong, and set myself up where I am in a position where I could care less what the market does this month or next or for the rest of the year for that matter, my income needs are met.

It means that in spite of not watching share price, worrying about what the market was doing, or not trying to pick companies I thought would give me maximum return, my broker is telling me I still outperformed the market while generating double the income flow that I would have generated if I held the FTSE 100 index fund. Higher dividends and higher total returns; I’ll take that any day of the week.

All in all, 24 companies paid me a dividend over the course of January, February and March. They are :
Next – £3.18
Nike – £0.62
Sainsbury – £2.30
National Grid – £18.35
Cisco – £1.75
Burberry – £1.05
United Utilities – £2.59
Vodafone – £21.38
Britvic – £41.30
BT – £15.22
Procter & Gamble – £1.37
Merchants Trust – £11.71
Dunedin Income Growth Trust – £8.52
Intel – £0.90
Visa – £0.34
Exxon Mobil – £1.56
Unilever – £2.76
Estee Lauder – £3.26
SSE – £3.01
Goldcorp – £1.79
Astrazeneca – £43.55
Shell – £98.91
Imperial Brands – £17.85
BP – £43.89

In total, I received £347.16 in the first quarter. Putting it another way, I received close to £4 a day in pure passive income. That’s a great deal for simply owning shares in high quality companies.

And the best part about earning dividends is you can reinvest them in order to receive even more money. Almost the entire cost of my 12 shares in Experian and 24 in Sage are funded from this quarters dividend. My dividend has essentially allowed me to accumulate an ownership stake in two fantastic businesses without a cost to myself. And best of all, Sage and Experian pay a dividend of their own causing my dividend income to grow larger and larger.

I’ll end the post with a quote from professor Robert Novy-Marx who is an advocate of owning shares in quality companies.

“Buying high quality assets without paying premium prices is just as much value investing as buying average quality assets at discount prices. Strategies that exploit the quality dimension of value are profitable on their own, and accounting for both dimensions of value by trading on combined quality and price signals yields dramatic performance improvements over traditional value strategies. Accounting for quality also yields significant performance improvements for investors trading momentum as well as value.”

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