First, here is the portfolio's VALUE BREAKDOWN, with:

1. Total Capital Invested (not including reinvested dividends);

2. Total Dividends Received; and

3. Capital Gain (from price appreciation)

I added only $27.23 (not including reinvested dividends) to the portfolio in the month of August, bringing my raw invested capital to $4,243.45. I would have liked to add more, but moving to a new place soon is preventing me from doing that.

It's interesting to see that my expectations for the broad market have been pretty spot on for the last couple months, as the S&P did pullback and moved entirely sideways for the whole August. 

September is looking better for the bullish crew however, and I believe 3000 is back on the table for the month.​

Still, I'm very happy with the portfolio's performance. Despite the pullback, it's up at a total return of 3.03% and an annualized return of 6.34% (by end of Aug).​

BUYS AND SELLS -

I trimmed the Financial sector a little by selling all of my MAIN shares. Main Street Capital is the premiere and most-loved BDC out there, but the valuation to me is getting too high. It looks like the dividend coverage has contracted as well. With a monthly dividend of $0.205 that equates to $0.615/quarter, the recent quarter's EPS of $0.63 represents a payout ratio of 97.6%. That's not entirely comforting. 

From a total return perspective, it just seemed the right time to sell the position. I realized gains of 17.78%, including the dividends, with an annualized total return yield of 53.24%. That's because I owned this stock for only 4 and half months. 

I also sold off my position in Global Net Lease (GNL). The dividend payout ratio in this one was already over 100%, and it continued to look worse over the last two quarters. I exited flat ultimately (realized gain of 40c). ​

I immediately recycled the capital and my gains into AbbVie (ABBV), Simon Property Group (SPG), Snap On (SNA), Synchrony Financial (SYF), and Eastman Chemical (EMN), positions already held in the portfolio.

As of September 9, my BENCHMARKING shows that I'm lagging the S&P500 by 3.26%. Everytime there's hint of good trade news, things reverse and new challenges arise between the US and China, sending cyclical stocks down harder than defensives, and since I'm heavy on cyclicals (financials, tech, industrial, discretionary), I expect this lag to continue until a trade deal is comprehensively reached.

At close of 9/9/19, if I had been investing in SPY, my portfolio would have a market value of $4,666.10. It's actual value is at $4,518.67.

Now, let's take a look at the SECTOR distribution and performance in my portfolio. 

Selling off MAIN and GNL and spreading the capital around has evened out the sector weightings more. 

The best performing sector is Technology with an unweighted average performance of 32.5% (including dividends) across the four stocks in the sector. Surprisingly, AT&T (T), my lone wolf in the Communications sector, has done really well, bolstered most definitely by its high dividend yield and globally low interest rates.

Next, let's check the average performance of stocks based on their DIVIDEND STATUS.

Things seem to line up too well this month, as each step up in dividend growers has outperformed its lower counterpart, with exception to the Kings. Dividend Champions are leading now performance-wise. I'm also happy to see Altria (MO) become a Dividend King, reaching its 50th year of dividend growth.

The INDIVIDUAL PERFORMANCE of every stock in the Solid Dividend portfolio:

Selling off two positions, I now own 41 stocks and am positive on 27 of them. That represents an accuracy of 66%. Famed investor Peter Lynch once said that a 60% success rate is more than enough to beat the market in the long run. ​

My best performing stock continues to be Lithia Motors (LAD). The stock continues to chug along as the business continues to grow at a remarkable rate and beat analyst expectations. 

KLA-Tencor (KLAC) is slightly behind. 

The SOLID DIVIDEND Snapshot (9/9/19)

Annualized Return

As of Sept. 9, 2019, my portfolio has an annualized (or internal rate of) return of 13.35%, which accounts for the different time periods I invest capital.

If I continue picking good businesses at appropriate valuations and I'm patient for moderate market pullbacks, I expect an annualized return of above market average, which on the extremely long-term is 9.8% (not accounting for inflation).

As a long term dividend growth investor, I'm excited by what lies ahead!

Valuations of Current Holdings

Regional banks and one credit card issuer (CFG, CMA, PACW, and SYF) continue to be undervalued, understandably so because of lowering interest rates.

AbbVie (ABBV) is still a deep value based on the expected earnings at least 2 fiscal years away. 

I'm looking at selling one stock: Home Depot (HD). It's already "Highly Overvalued" on my scale.

Currently trading at 23 p/e and with expected growth in the single digit percentages for the next 2 and half years, I'm aiming to sell and collect my gains at $250/share. 

Waterfall Chart

Stay tuned for more stock analysis, buy updates, and monthly analytics.