According to its current value snapshot as of 10:40 p.m. eastern on 30-SEP-2022, the former iPIG portfolio is worth $97,038.62. That number may change a bit when the broker publishes the monthly statement, but it probably won’t change all that much. Per its June 2022 statement, the former iPIG portfolio was worth $101,738.14 at the end of June. That’s a decline of $4,699.52, or about 4.6%.
By comparison, the S&P 500 index tracking ETF SPY closed at $357.18 on September 30, 2022, vs. $377.25 on June 30, 2022 (or a dividend-adjusted $375.71, per the Yahoo! Finance Dividend Adjusted closing price). Dividend-adjusted, SPY declined around 4.9%, so the former iPIG portfolio slightly “outperformed” that index for the quarter. Of course, since the portfolio declined, it’s cold comfort to have outperformed the index.
All that said, the portfolio’s primary design target was to receive an increasing dividend stream that grew fast enough to fight off inflation. And on that front, it performed a bit better. The former iPIG portfolio received $781.78 in dividend-like income in the quarter, vs. $684.62 for the same quarter last year. That’s an increase of $97.16, or around 14.2%. That compares favorably vs. the 8.3% year over year CPI that represents the most recent inflation number published by the Bureau of Labor Statistics.
Part of the increased dividend income came from the replacements mentioned in last quarter’s update: Quarter End Update - Former iPIG Portfolio , where I had replaced companies that had suspended and hadn’t resumed their dividends with one that still showed a track record of dividend growth. Lapping “nothing” with “something” looks like tremendous growth.
Still, some of the companies in the account did increase their dividends during the quarter, which also boosted the portfolio’s take. Those increases include General Mills, Synchrony Financial, UNUM Group, J.M. Smucker, Wells Fargo, Dover and Ryder System. Not every increase kept pace with inflation, but every increase certainly helped and were appreciated.
In addition, several other companies in the portfolio were still paying higher dividends than they had in the same quarter last year, which is fitting for a portfolio that actively looked for companies with histories of increasing their dividends.
All in all, I am glad that the portfolio continues to perform more or less in line with its primary design target, especially since inflation has been so darn high. I remain cautiously optimistic that it will continue to do so for the rest of 2022, but I am concerned that if stagflation and rising interest rates continue into 2023, it will get tougher for companies to continue increasing their dividends as their costs escalate.
Rising dividends have been the pleasant financial surprise of the year. Given everything happening in the world, I am quite shocked that the trend has continued this far, but I’ll certainly take it.
Regards,
-Chuck
Home Fool
Disclosure, I own shares of General Mills, Synchrony Financial, UNUM Group, J.M. Smucker, Wells Fargo, Dover and Ryder System (as well as the other companies in the former iPIG portfolio).