February 2020 is in the books. Let's see how much income my investments produced for me last month.
In this blogpost I will list my dividend and option income for the month of February 2020
In February I realized a total of $3,113.27. This is made up of $229.95 of dividends and $2,883.32 from selling options.
Let's start with the dividend side.
These are the stocks that paid me a dividend:
British American Tobacco: $84.59
American Express: $5.48
AT&T: $26.08
Caterpillar: $13.13
CVS Health: $12.75
General Dynamics: $8.67
Realty Income: $4.94
Starbucks: $14.64
Texas Instruments: $15.30
WestRock: $15.81
Williams-Sonoma: $28.56
Last year February I received $157.29 in dividends. That means that this year I received %46.20 more dividends than last year February. Nice!
All dividends are after dividend taxes of 15%, but I can reclaim this via the Dutch IRS, so there's an added bonus there when I do my taxes for 2020 (in March next year).
And now on to the options..
Well, there is some good news here and some bad news.
The good news is that I closed a lot of positions for a profit just before the market tanked due to the coronavirus. That's why the realized profit from options for this month is so high.
The bad news is that I sold a few new puts just a little too early. They are all in the red right now. I also bought a bunch of stocks that are currently down. This caused my buying power to decline faster than I would like. More about this below.
Portfolio changes
Due to the market correction, I got the opportunity to pick up shares in some great businesses for a discount. Here are my purchases I made in February:
I bought 430 shares of Royal Dutch Shell (RDS.A). On 3 February I bought 130 shares for €23.59 per share. I bought another 100 shares on 4 February for €23.62 per share. I bought another 100 shares on 25 February for €21.96 per share. I bought another 100 shares on 26 February for €21.36 per share.
I bought 30 shares of 3M (MMM). On 3 February I bought 10 shares for $160.56 per share. I bought another 10 shares on 25 February for $153.03 per share. I bought another 10 shares on 26 February for $149.62 per share.
On 3 February I bought 8 shares of Eastman Chemicals (EMN) for $73.10 per share.
On 13 February I bought 15 shares of Phillips 66 (PSX) for $91.92 per share.
On 18 February I bought 100 shares of Pfizer (PFE) for $38.11 per share. This was an assignment on a put option I sold.
I bought 150 shares of Altria (MO). On 19 February I bought 100 shares for $50.11 per share. This was an assignment on a put option I sold. On 26 February I bought another 50 shares for $42.58 per share.
On 26 February I bought 30 shares of Walgreens Boots Alliance (WBA) for $48.52 per share.
I was a little bit too early with pulling the trigger on some of these, but oh well, I can't time the bottom.
Some of these purchases were on margin. My reasoning for this was that the high dividends on some of these stocks combined with option premium income and new contribution is going to fill the gap back up relatively fast.
In retrospect that was a bit of a mistake, because my buying power is going down rather fast because of the leverage.
That's why I made a few changes to the portfolio. I sold a bunch of stocks to raise cash to offset some of the margin I used.
Here are the stocks that I sold:
On 26 February I sold out of my 160 shares of Ford (F) for $7.37 per share. I wasn't really happy with this position for some time now. I don't like the business model, they have tons of debt, and almost no growth.
On 27 February I sold out of my 59 shares of AT&T (T) for $36.72 per share. I didn't really like this company either. Little growth, lots of debt, and the letter by activist investor Elliot didn't really give me any confidence in the business either.
On 27 February I sold out of my 10 shares of NextEra Energy (NEE) for $267.72 per share. Although I really like this business, the valuation has gotten a bit high. They have a P/E of 34. I didn't really like having to sell a winner, but the valuation, combined with the fact that the stock hadn't declined (yet) due to the coronavirus, I chose this one to sell as well.
On 27 February I sold out of my 30 shares of Enbridge (ENB) for $37.70 per share. Honestly, I didn't even know why I bought this stock in the first place. Probably because of the yield and because a lot of other dividend growth investors have it. But I don't really understand the business model and I also don't like the amount of debt they have. So I sold it.
On 28 February I sold out of my 50 shares of Albemarle (ALB) for $79.02 per share. This is an interesting one. I actually bought these shares in October for something like $62 per share. They've run up quite a bit since then. In my opinion the valuation has gotten a bit ahead of itself. That's why I decided to sell them again and realize a quick profit.
Basically the question I asked myself was:
If I had money to invest right now, would I want to buy MMM, WBA, MO and RDS, or do I want to buy T, F, ENB, NEE and ALB. It was an easy choice.
Next month
March is going to be an interesting month. My cash balance is still negative and I have a bunch of (sold) long term put options.
Even though I still have a decent amount of buying power left, if the markets keep going down from here, I may have to make a few more adjustments to maintain a positive buying power. Probably in the form of closing some sold puts for a loss. But it is what it is. We'll see.
How was your month? Hopefully you received some nice dividends as well. Did you make any stock purchases?
If you have any questions or comments, please feel free to post them below!
To view my option trades in realtime, click here.
Thanks for reading.
SD
Disclaimer: I am NOT a registered investment advisor, financial advisor or tax professional. Any information found on this website is not a substitute for professional advice. This website should be viewed for entertainment purposes only. No guarantees or promises are made regarding the accuracy, reliability or completeness of the information presented. Please consult with an appropriate professional before investing any of your money.