December 2013 Dividend Earnings

My December 2013 dividend earnings are in. It has been a busy month!

HoldingDividend/Shr# SharesDividend TotalReinvestedNew SharesAccount
XOM$0.6330.215$19.04YES0.202ROTH IRA
INTC$0.225106.058$23.86YES1.010ROTH IRA
ADM$0.1975.395$14.33YES0.352ROTH IRA
MCD$0.8127$21.87YES0.2295Trad IRA
IBM$0.9514$13.31YES0.0752Trad IRA
CSX$0.15100.5681$15.09YES0.5413Trad IRA

I got my first full dividend for MCD, after the piecemeal purchases I made earlier this year. My Shell investment returned one last ‘funny’ dividend – I received $34.20 in cash, but immediately has $5.13 clawed back as a foreign dividend tax.  Hopefully this should be resolved next quarter now that my RDSA has been liquidated from my brokerage account and I have purchased RDSB in my Traditional IRA.

$159 of dividend income is not too bad.  Unfortunately January and February will not be as lucrative, my dividend paying investments in those months are rather sparse at this time.


Purchase of IBM

IBM Logo

IBM Logo

IBM has been on my watch list for some time now. It is a major holding of Warren Buffett’s Berkshire Hathaway for a few years now, and he continues to make additional purchases periodically. While I’m not a big fan of tech stocks in general, when Buffett acts I tend to listen.

I’ve thought periodically about taking a position in this company, but have been deterred by it’s low dividend. With the recent price dip (below $189), the dividend yield has spiked to 2%. While not great, with the large dividend increases each year (I hope for 13+% raises) and current low payout ratio (27%) I hope to see a respectable yield on cost within 5 years or so.

I am attracted to IBM’s strong share repurchase program, which will gradually increase my small ownership stake of the company over time. If IBM achieves its 2015 Roadmap goals – one of which is $20 of earnings per share in that year, then there will be ample opportunity for them to boost their dividend payout significantly.

I would also expect success in that endeavor to lead to an increase in the stock price – which will making my dividend reinvestments (and the firms stock repurchases) more expensive, is something all investors would like to see in the long term.

Purchase of 14 shares of IBM at $188.32, for a cost basis of 2,636.48. Dividend yield at time of purchase 2.02%. Dividend Reinvestment enabled. Initial dividend income $53.20 annually.