Selling to Build: Freeing Up Capital for a Home

Over the past weeks, I have been unwinding several equity positions. Not as a reaction to markets, but as part of a deliberate shift in priorities: building cash for a future down payment on a house.

The positions sold:

• Kinder Morgan (KMI) – 48 shares
• Canadian National Railway (CNI) – 20 shares
• A. O. Smith (AOS) – 25 shares
• Medical Properties Trust (MPW/MPT) – 200 shares
• Medtronic (MDT) – 30 shares

This marks a temporary transition from long-term compounding to short-term certainty.

Looking Back at the Buys

Each of these investments was made with a clear thesis and documented at the time:

• https://dividenddream.blogspot.com/2024/10/recent-buy-canadian-national-railway-cni.html
• https://dividenddream.blogspot.com/2023/05/recent-buy-aos.html
• https://dividenddream.blogspot.com/2023/02/recent-buy-mpw.html
• https://dividenddream.blogspot.com/2022/09/recent-buys-asml-txn-mpw-afl-intc.html
• https://dividenddream.blogspot.com/2022/12/recent-buys-bep-txn-ad-and-mdt.html

Reality Check: Underwhelming Performance

Since purchase, results have been mixed at best:

• Limited price appreciation
• Some positions trading below cost
• Weak sentiment around MPT in particular
• Opportunity cost versus stronger performers

None of these positions were outright disasters. But collectively, they did not produce the expected combination of growth and income. Under normal circumstances, the answer might be patience. But portfolio decisions do not happen in isolation—they depend on real-world needs.

The Actual Driver: A Life Event

The decision to sell is not primarily market-driven. It is because I need liquidity for a future down payment on a house. Selling achieves three things:

1. Converts invested capital into usable cash
2. Eliminates downside risk before deployment
3. Creates flexibility and certainty

Final Thought

Investing is often framed purely in terms of returns. But ultimately, capital has a purpose beyond accumulation. This is one of those moments where capital shifts from: “working in the market” → “working in real life.” From building a portfolio… to building a home.

Recent dividend raises (O, JNJ, KMI, IBM, BAX, Shell, UNP)

In the last weeks I received several raises that boosted my dividend income! So let's see who decided to give me more money and how much!

• On March 15 Realty Income (O) announced its Board of Directors has declared an increase in the company's common stock monthly cash dividend to $0.247 per share from $0.2465 per share. It's a standard quarterly raise which adds a few cents each year.
• On April 19 Johnson & Johnson (JNJ) announced that its Board of Directors has declared a 6.6% increase in the quarterly dividend, from $1.06 per share to $1.13 per share.
• On April 20 Kinder Morgan (KMI) approved a cash dividend of $0.2775 per share for the first quarter ($1.11 annualized), payable on May 16, 2022. This dividend is a 3% increase over the first quarter of 2021 and marks the fifth consecutive annual increase.
• International Business Machines (IBM) raised its quarterly disbursement to $1.65 cents a share from $1.64. The company is a member of the S&P 500 Dividend Aristocrats Index, whose constituents have paid out a higher dividend for at least 25 straight years. But the raise itself is quite poor...
• On May 2 Baxter International (BAX) announced an increase in the company's quarterly cash dividend to a rate of $0.29 per share of common stock. This represents an approximately 3.5% increase over the previous quarterly dividend rate of $0.28 per share.
• On May 5 Shell decided to raise its quarterly divend by about 4%. Since Shell is one of my bigger positions this raise adds more than € 13 per year.
• On May 12 Union Pacific Corporation (UNP) announced a 10% hike in its dividend payout. The move underscores the company’s sound financial health as it utilizes free cash flow for enhancing shareholders’ returns. It is the 3rd 10% dividend raise during the last year.

These seven raises combined will deliver an annual income boost of more than € 25 in 2022 (and hopefully more after 2022!). In total I have received raises which will boost my annual dividend income by almost € 135.

Recent dividend increases

Back in February I wrote about various dividend increases. The pace continues in the last weeks with different raises! Of course I am happy with these raises, especially after a somewhat sobering 2020 in terms of dividend growth. So let's take a look at the raises.

Realty Income

On March 16th Realty Income (NYSE:O) declared a $0.235/share monthly dividend, which is a 0.2% increase from its prior dividend of $0.2345. I received 15 dividend raises since my purchase of O back in 2018. The annual dividend growth rate is just over 2%. It's not mindblowing. My return on investment is currently around 12% per annum so I am not complaining either.

Johnson & Johnson

On April 20th Johnson & Johnson (NYSE:JNJ) declared a $1.06/share quarterly dividend, which is a 5% increase from its prior dividend of $1.01. I received two dividend raises since my purchase of JNJ back in 2019. I guess my expectations with regards to the dividend growth rate were met, albeit slightly on the lower end. We'll see what happens next year with the dividend!

Kinder Morgan

On April 21th Kinder Morgan (NYSE:KMI) declared a $0.27/share quarterly dividend, which is a 2.9% increase from its prior dividend of $0.26. Since the infamous dividend cut back in early 2016, the dividend has more than doubled. However the return on my investment is still negative, around -5% on an annual basis. For now I just plan to hold and collect my dividends.

International Business Machines Corporation

On April 27th IBM (NYSE:IBM) declared a $1.64/share quarterly dividend, which is a 0.6% increase from its prior dividend of $1.63. I received seven dividend raises since my purchase of IBM back in 2014. The annual dividend growth rate is just over 6%. I guess I am disappointed with the performance of IBM which moved nowhere in the last 8 years. For now I plan to hold onto this position.

Royal Dutch Shell

On April 29th Shell (NYSE:RDS.A) declared a $0.347/ADS quarterly dividend, which is a 4.2% increase from its prior dividend of $0.333. Since the infamous dividend cut back in 2020, the dividend has risen slightly in $-terms, however because of the decline in the EUR.USD-rate it's basically steady. The return on my investment is still negative, around -2% on an annual basis. For now I just plan to hold and collect my dividends.

Baxter

On May 3th Baxter (NYSE:BAX) declared a $0.28/share quarterly dividend, which is a 14.3% increase from its prior dividend of $0.245. I received several dividend raises since my purchase of BAX back in 2013. The dividend was reduced after the Baxalta spin-off in 2015. After that moment BAX returned to a high dividend growth. And based on my return on investment (around 15% on constant FX-rate) I am quite satisfied! We'll see what happens next year with the dividend.

Summary

Together these raises increased my forward annual dividend income by roughly €7. 

Based on my portfolio's dividend yield of 3,7% I have to invest € 190 to get this kind of dividend income, but now I get it for free! Rock on!

Dividend raise: Kinder Morgan (+25%)

A few days ago KinderMorgan announced a dividend raise of 25%! Their quarterly dividend is increased from $0,20 tot $0,25 per share. Since I own 48 shares of KMI, my annual dividend income increases with roughly € 8,50 before taxes. That's a really nice dividend raise from KinderMorgan!

KMI have come a long way since their dividend cut in the beginning of 2016. The new dividend is still only half of what it used to be, but it seems they are on the right track.

In 2019 I received 11 dividend raises so far. My annual dividend income inceased by € 30 (before taxes). KMI's raise is by far the biggest, both in terms of %-increase but also with its impact on my annual dividend income. Let's keep 'em coming!

Do you have a position in KMI? What do you expect for the future of this company?