What a crazy first quarter we have had. We went from the threat of world war 3 to forced economic shutdowns as a result of the corona virus. The world has come to a standstill and for the first time in years we are all fighting a common enemy.
I don’t want to delve into market talk as I have already written several posts on the topic over the past few weeks. But what I will say is that the dividends I receive really do provide me with a comfort blanket during times of market turbulence as we have experienced over the last quarter. The market can be irrational at times as it seems to gyrate up and down on a whim but dividends add that bit of stability, reliability and predictability to my portfolio. Sure, dividends may not increase every year and a cut or elimination is even possible but the odds are greatly reduced when you diversify among different companies and sectors and focus on dividend quality – free cash flow, EPS and payout ratios.
So how did my portfolio fare in terms of dividends over the past three months?
I had a total of 35 companies send dividends my way, adding up to a total of £1,150.
This has been another record quarter. It is a 30% increase from the same quarter last year as I received £891 during the first quarter of 2019. When comparing to the same quarter in 2018 where I received £515, it is a massive 123% increase! The dividend juggernaut keeps chugging alone.
My biggest contributor over the quarter was Imperial Brands which paid me over £350 in dividend income. Other notable mentions go to BAT and Shell which paid me close to £100 each!
It continues to amaze me that I regularly receive gushers of cash for nothing but owning shares in high quality companies. Besides the initial research work needed, there is not much effort required. I simply put my feet up, and let the dividends role in. Unlike my job where I am paid by the hour, the dividends I receive are not linked to my time or effort. By having an ownership stake in the biggest companies in the world, I am reaping the rewards of other peoples hard work. Other peoples time and effort is making me money.
Looking ahead to the next quarter, there might be a slight reduction in dividends received. This is because a number of companies want to conserve cash in order to see them through this period of forced corona virus shutdown.
On the London market, so far 233 companies have either cancelled, cut or suspended their dividends. Whilst this will put a dent in the dividend income I receive this year, I am sure these companies will more than make up for it in the future. In these unprecedented times, a dividend suspension is a short term price that needs to be paid to ensure a companies long term survival.
That’s it for now. Keep safe and happy investing.