Dividend Investor Earning $65,800 Annually With $2.2 Million Invested Shares Portfolio: Top 11 Stocks

If executed correctly, dividend investing is one of the few efficient ways to accumulate wealth with minimal risk. A report from S&P Global says dividend stocks accounted for about 32% of the total S&P 500 return since 1926. The report notes that companies that have raised their dividends every year for at least 25 consecutive years have posted returns that beat the broader S&P 500 index.

With thousands of dividend stocks in the market and a highly fluid market situation, it can be overwhelming for beginner investors to decide which dividend stocks and ETFs to buy. Let's look at a real success story for ideas.

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In December 2022, a dividend investor shared his income report and stock portfolio on the r/Dividends board on Reddit, asking for feedback from the community, which has now surpassed 600,000 members.

The portfolio details showed its total worth stood at $2.2 million and generated a whopping $65,800 in annual dividend income.

The investor said his portfolio consisted entirely of individual stocks. 

"All individual stocks. As of now, we don’t withdraw any and drip them all. We’re looking to get to $120k dividend per year. We have $60k cash in a rollover IRA ready to deploy. The $920k cash we don’t want to touch as we may make a big purchase later," the investor said.

The investor mentioned about $922,000 of their $2.2 million was in cash, put in an E*TRADE premium account that yields 3.25% with no fee. Their portfolio screenshots showed this investment brought in about $29,987 annually.

The Redditor said he was 50, with a net worth of $4.2 million, no major debt and three young kids, aged 16, 12 and 9.

There were 19 stocks in the investor's portfolio. Let's take a look at some of the biggest holdings.

Texas Instruments 

Number of Shares Owned: 8,245

Annual Dividend Payment: $9,069

According to the portfolio details he shared publicly, semiconductor company Texas Instruments Inc. TXN accounted for about 24% of the investor’s $2.2 million portfolio. TXN has a dividend yield of about 2.4%. The company has raised its dividend for 21 straight years. The stock is up 22% so far this year.

Morgan Stanley 

Number of Shares Owned: 3,607

Annual Dividend Payment: $11,181

With over a decade of consistent dividend increases, Morgan Stanley MS is a notable bank dividend stock with a yield of about 3%. The investor, earning about $65,800 in dividend income per year, had about 12.3% of his portfolio allocated to the stock.

Someone during the discussion recommended the investor to lower his take in MS. Here is what he said in reply:

"MS came from E*TRADE stocks I bought during 2010; since then, MS bought them and started paying dividends, so I never move them."

Analog Devices

Number of Shares Owned: 1,230

Annual Dividend Payment: $3,739

Another semiconductor stock in the Redditor’s portfolio raking in $65,800 in dividend income, Analog Devices, Inc. ADI allows investors to enjoy both dividend income and stock price growth. ADI is up 39% over the past year and yields less than 2%. The Redditor's position in the company was worth $194,303. 

Kimberly-Clark Corp

Number of Shares Owned: 409

Annual Dividend Payment: $1,897

The investor earning $65,800 in annual dividends had a $55,084 position in consumer goods and personal care products company Kimberly-Clark Corp. KMB. Kimberly-Clark Corp. KMB has a dividend yield of about 3.5%. The company has raised its dividend payouts for 52 years in a row.

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Altria

Number of Shares Owned: 816

Annual Dividend Payment: $2,937

With an over 8% dividend yield and more than 55 years of consecutive increases, Altria Group Inc. MO has become a popular dividend stock among retail investors on Reddit. The Redditor owned 816 shares of the tobacco products company and collected $2,937 in annual dividends from the stock.

Unilever

Number of Shares Owned: 697

Annual Dividend Payment: $1,352

Consumer products giant Unilever plc UL has been paying dividends since 1929, a feat nearly unmatched in the industry. The stock is up 28% so far this year. The investor, making $65,800 in annual dividends, had a $32,208 stake in the company.

Corning

Number of Shares Owned: 1,020

Annual Dividend Payment: $1,101

Specialty glass and ceramics company Corning Inc. GLW was an interesting dividend stock in the investor’s portfolio making $65,800 in dividends annually. The stock has a dividend yield of about 2.4%. In September, Citi Research published a list of stocks for a "barbell" approach to balance out Magnificent Seven stocks. Corning Inc. GLW was part of the list.

Starbucks

Number of Shares Owned: 334

Annual Dividend Payment: $654

Starbucks Corp. SBUX recently increased its dividend by 7%, marking the 14th consecutive year of payout raises. The investor had a $29,593 stake in the coffee giant, undergoing a turnaround plan amid a CEO change. SBUX yields about 2.5%.

Merck

Number of Shares Owned: 186

Annual Dividend Payment: $513

Pharma giant Merck & Co. Inc. MRK was also an important dividend pick of the investor earning $65,800 per year in dividends. Earlier this month, UBS said it now has a positive view on the U.S. economy amid rate cuts and Chinese stimulus, among other factors. The firm also published a list of its top picks in different sectors. Merck & Co. Inc. MRK was on the list. It has a 2.91% dividend yield.

Verizon Communications

Number of Shares Owned: 361

Annual Dividend Payment: $924

Verizon Communications Inc. VZ paid $924 in annual dividends to an investor earning $65,800 per year.

Coca-Cola 

Number of Shares Owned: 185

Annual Dividend Payment: $325

The Redditor had 185 shares of Coca-Cola Co. KO in his portfolio. At the time of his post, his investment was worth $11,562. He collected $325 in annual dividends from the stock.

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