by Yoda

Dividend investing for me is a long-term strategy. I like to buy great companies at good value based on historical metrics, dividend safety & future prospects. Hold them for a long time, re-invest dividends and wait for compounding to do its magic. 2022 was a crazy year! S&P500 finished 2022, 19.4 % down. Energy was the one of the top performing sector. Where as the pandemic infused growth of many technology stocks seemed to be fizzing out. I bonds made a gigantic comeback providing up to 7% risk-free annual yields in 2022. Here is my dividend income update for the year 2022 & what I did with my portfolio.

Dividend Income Update 2022

I made 4817 USD from my positions in 2022! It came from the following stocks:

Total Dividends in 2022

$ 4817 represents another 25% increase in dividend income from 2021. Here is a percentage breakdown of dividends from all stocks in my portfolio.

Dividend breakdown from all my stocks

One of my goals for 2022 was to reduce the reliance on dividends from NATI, T & MO. I was able to bring their contributions down from 45 to 41%. At the same time I was also able to increase my dividends from VTI by almost double the amount in 2021. This helps in lowering the risk on my dividend income.

If you are interested in these graphs and charts, please check out my post on how to create your own google sheet to track your portfolio across multiple accounts and create such graphs and chart.

My Buys in 2022

I bought a lot of stocks in 2022.

I doubled my VTI holdings over the year which should provide me about 580$ in 2023 dividend income update.

EDV (Vanguard Extended Duration ETF): This is a risky pick. Its an etf holding 24 year out US government bonds and treasury bills. At todays prices it provides about a 4% yield. However its price solely trades inversely to interest rates declared by the fed. If the fed rates go up, the price of this etf goes down in order to provide the same interest rate. Look at how its price has come down from 140 to 82 in 2022 on the back of interest rates going to all time highs in last few years. However the inverse is also true, with the FED signaling interest rates to pause and maybe even start dropping in middle of 2023, the price of this etf could start going back up. I will exit this position if it goes 20% down from here, but hold it if it starts going up in 2023.

INTC (Intel Corp): I had started buying this in 2021 and bought way more in 2022 after the carnage in stock price this year. I still think their investments in the business will payoff eventually and I am happy to hold for dividends for the time being.

FIS (Fidelity National Information Services): They are heavily involved with payments industry. They help with accepting payments, banking software and a lot more within the finance industry. Their solutions are sticky and the company has been growing dividend fast. They paused the dividend growth during the pandemic which I think is sign of a prudent leadership. But at a 2.70% starting yield I think it could be a good buy!

MDT (Medtronic PLC): They are a massive company in healthcare space. Medical devices is a sticky business. Doctors tend to stick with what has worked so far and are hesitant to recommend something new. a starting yield of 3.5% and dividend raises in high single digits was something I could not refuse.

O (Realty Income): Well STOR Corp(STOR) got bought out this year. So I ended up moving some of those funds to O. Still on the lookout to buy another REIT so that my REIT bucket stays full.

ORCL (Oracle Corporation) : Oracle got left behind on the cloud infrastructure and transformation business by AWS, Microsoft and Google. But off late they are growing their cloud related revenues fast. I know their ERP business is sticky and they have a lot of enterprise clients who will be looking to move to the cloud in coming years. That is a lot of new avenues to sell a lot more cloud products to them. Oracle is not very reliable in growing dividends year over year. But they do a lot of buybacks which help make you a bigger owner in the company.

VTI (Vanguard Total Stock Market Index Fund ETF) : I had been buying very less VTI in 2021 at all time highs. But 2022 gave me a lot of opportunity to add to my VTI position. As you know I am big believer in index investing.

VFC (VF Corp): VF Corp has grown dividends for 48 years. They have been having issues with inventory, debt in 2022. This has resulted in their stock price cratering to unimaginable levels. However I still like Vans, Timberland, The North Face. These are very highly reputable brands and I think VFC can still get out of this in next couple of years.

My Sells in 2022

I kept rotation on my portfolio to a minimum. The only sells I had were due to buyouts. MNR and STOR were two REIT’s that got bought out. I moved these funds to stocks in my existing portfolio mentioned above.

Performance for the year 2022

Overall I ended the year at 13% loss as compared to loss of 19% in VTI and 18.17% loss in S&P 500. I am still pretty happy with the dividend income growth as well as the performance of the portfolio.

Here is a neat timeline of dividends thrown by my DGI portfolio over the last few years which shows compounding of dividend income in action.

Plans for 2023

My first goal is same as last year’s dividend income update, reduce the percentage of dividends from NATI, MO & T by buying more of other reliable dividend stocks. Another goal of mine is to increase the total dividends by 25% in 2023. I am also planning on consistently buying more VTI. As I have said before index investing is really my favorite type of investing and it also gives dividends.

Dividends stocks do come with some risk, but with precautions you can avoid the risky one’s and choose the best dividend paying/growing stocks for your portfolio. I prepared a guide where I discuss some key ratios, fundamentals, some important resources to look at while deciding to buy a dividend stock. Also find out how to get free access to Morningstar, Value Line, workaround paywall behind popular news sites like Seeking Alpha etc.  Consider signing up for free instant access to the pdf version of the insights into dividend investing.

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