The Southern Company (SO) Dividend Increase

The Southern Company (SO) announced that its quarterly dividend will be raised by 3.44% to 52.50 cents from 50.75 cents per share per quarter. This dividend increase is the company’s thirteenth consecutive annual increase. The new dividend is scheduled to be paid on June 6, 2014 to shareholders on record as of May 5, 2014. The new dividend rate results in an annualized yield of 4.65% based on SO’s closing price today.

 

My portfolio consists of 50 shares of The Southern Company, which increases my quarterly dividends from $25.38 to $26.25 and an annual dividend raise from $102 to $105.

Omega Healthcare (OHI) Dividend Increase

Another quarter and another pay-raise. Omega Healthcare Investors Inc (OHI) announced that its quarterly dividend will be raised by 2.04% to $0.50 per share/quarter from $0.49. This dividend increase is the company’s seventh consecutive quarterly increase. The new dividend is scheduled to be paid on May 15, 2014 to shareholders on record as of Apr 30, 2014. The new dividend rate results in an annualized yield of 5.82% based on OHI’s closing price as of Thursday – Apr 17th.
My portfolio consists of 100 shares of Omega Healthcare, which increases my quarterly dividends from $49 to $50 and an annual dividend raise from $196 to $200.

Chatter Around the World – 40

Chatter Around the World is a weekly link update of economics, investing, dividends and personal finance articles that have caught my eye. In these weekly updates, I also capture my blog updates and news related to my holdings.

New Blog Posts

Let dive into the links that caught my attention this week.

Updates from My Portfolio Holdings

General Reads

Dividend Reads

Dividend Stock Analysis


< All Previous Weekly Links

Have a wonderful weekend.

Kinder Morgan Inc (KMI) Dividend Increase

Kinder Morgan Inc (KMI) announced a 2.44% increase in its cash dividend. The quarterly cash dividend will increase from $0.41 to $0.42 per share and payable to on May 16, 2014 to shareholders on record as of Apr 30, 2014. The amount represents an increase of 11 percent from the first quarter of 2013 cash dividend amount. The annual dividend rate goes up from $1.64 to $1.68.
Kinder Morgan reported that the cash available to pay dividends rose to $573M, up 12% from a year ago and remains on track to meet or exceed its published annual budget of $1.78B in cash available to pay dividends. More dividend increases in 2014 are expected as KMI expects to declare dividends of $1.72 per share for 2014, an 8 percent increase over its 2013 declared dividend of $1.60 per share.
My portfolio consists of 60 shares of KMI, which increases my annual dividends from $98.40 to $100.80. My position in KMI was initiated when it was at a higher price, so my YOC is slightly lower than current yield. With this increase, my YOC is 4.68%.

My First Stock Investments

A trip down memory lane is in order on the event of this anniversary of my first stock trade. Some of my earliest trades did not work out so well, so I figured I’ll share my experience so that the readers may learn and avoid similar mistakes. One of my favorite quotes from John Bogle is “Learn everyday, but especially from the experiences of others. It’s cheaper!” So, with that in mind, here’s my story of how my first couple of stock trades played out.
I started saving and investing in 2007, but since I was new in the gameand did not know how to evaluate companies or what to look for in annual reports, I decided to start with mutual funds. As was the craze in those days, I picked funds that were hot – funds focused on China, India, and Brazil. Eventually I would sell them after a couple of years for a minimal gain.

But this story is more about my first stock investments. In 2008, while the financial turmoil was already underway, I decided that I would start buying individual stocks of companies. The S&P 500 was down about 7% since Jan 1st and about 9% down from a year earlier.

S&P 500: Apr 2007-Apr 2008

The first companies I picked were banking firms! I opened and funded my brand-spanking new investment account with $1,000 and could not wait to get started. I performed the following three trades in three days.

  1. Apr 16, 2008 (six years to this day) – Washington Mutual Inc – a savings bank holding company, which was the largest savings and loan association in the US. I bought 25 shares at $11.04 each for a total of investment of $276. The company would eventually go bankrupt on Sep 25, 2008.
  2. Apr 17, 2008 – Wachovia – was the fourth largest bank holding company in the US based on total assets. I bought 10 shares at $25.35 totaling $253.5. After the tremendous collapse, the company was eventually absorbed by Wells Fargo (WFC) and I got 1 share of WFC in exchange. I still own this share as part of my WFC holding.
  3. Apr 18, 2008 – Merrill Lynch – the world’s largest brokerage firm. I bought 8 shares at $47.95 each totaling $383.60. The company, under distress, was absorbed by Bank of America Corp (BAC)  on Sep 14 2008 and I got 6 BAC shares in exchange. I held this for a long time and eventually sold it at a loss. 
So, all in all, terrible investment decisions. I was caught up in the noise from the media and based my decision by listening to the so-called “experts” in the field. Moreover, these were companies that had the reputation and had been around for over 100 years, so my thinking was that they would weather the crisis just fine and come out on top. I could never imagine that these companies would die. But I learned a valuable lesson during the process. As luck would have it, the start of my investing career during the financial crisis made me a skeptic and I decided to learn and understand a company’s business model, due my due diligence and research my evaluation before investing in any firm.

It took me a year or so after that when I started realizing the power of dividends and even there, I learned lessons the hard-way – going for the high yield stocks and  funds. After a lot of trial-and-error, I finally found my way to dividend growth stocks and found that this mechanism worked and stuck with it. I now use a combination of dividend growth stocks, high income stocks and funds and index funds for my complete portfolio.

Why Dividend Growth Stocks?
Even though my learning curve was far from ideal, I realized that a majority of the investment philosophy out there was the traditional buy-low-sell-high, which works in theory, but is nearly impossible for anyone to time the market right. I decided that this performance-chasing was not going to work for me and turned to the concept of dividend stocks and passive income to fund my retirement. Dividend growth investors choose stocks in strong companies and participate as business owners staying invested while sharing the profits on a periodic basis; instead of active trading stocks in growth-focused companies where profits are unrealized until the investment is exited. 
By subscribing to this mechanism, I am not trying to beat the market each month, quarter or year. My goal is to increase my cash flow and generate enough passive income to achieve financial independence. By following this method, I have grown my passive income by leaps and bounds over the last five years. My progress so far is shown in the chart below.

Annual Passive Income Progress

What was your first investment? How did you end up choosing your current investment philosophy? Share your story below in the comments section.

Full Disclosure: I am long WFC. My full list of holdings can be found here.