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Subject:  Former iPIG Portfolio Year in Review 2020 Date:  12/31/2020  6:34 PM
Author:  TMFBigFrog Number:  1019 of 1024

What a crazy year 2020 was. Fortunately, from a financial perspective, I was blessed to remain employed and thus was able to keep the money in the former iPIG Portfolio invested throughout the year. The preliminary ending balance for 2020 wound up at $94,975.11. (It'll likely settle at something slightly different during overnight processing at my broker.) Compared with an official ending balance of $85,027.99 on the year end brokerage statement from 2019, its value was up around 11.7%.

That performance is about in line with the rate of return I generally would like to see from investing in individual stocks, but it underperformed the S&P 500 as measured by the investable ticker SPY. That ETF increased from $321.86 to $373.88, for a price increase of around 16.1%. Add in dividends, and the ETF outperformed the former iPIG portfolio by a bit more.

Still, the former iPIG portfolio was never designed to be a total return portfolio, but rather one focused on increasing dividend income faster than inflation. On that front, the portfolio performed exceptionally well. Dividend-like income (payments initially recorded as dividends -- some may be reclassified later when tax reporting completes) for 2020 came in at $2,512.09 for the year, an increase of around 11.3% from the $2,257.13 it received in 2019. That well exceeded the official inflation rate of less than 2%. In addition, The SPY "dividends" that went ex-dividend in 2020 were about $5.691 per share, up only around 1.3% from the around $5.619 per share from 2019, so the former iPIG portfolio outperformed that S&P 500 tracker on the primary measure it was designed around.

Assuming 2021 "dividends" are consistent with 2020, the former iPIG portfolio sits with a current yield around 2.64%, while the SPY index tracker sits with a current yield around 1.50%, which suggests the former iPIG portfolio has a reasonable chance of delivering a higher income per dollar invested.

Despite that overall outperformance on a dividend payment and growth perspective, not every company in the portfolio delivered strong dividend and operational performance. Disney suspended its dividend after the January 2020 payment due to COVID and has not reinstated it yet. TEVA Pharmaceutical suspended its dividend in 2017 when it ran into Copaxone patent problems and has not reinstated it yet. TEVA is expected to return to more consistent profitability now that it's well into its post Copaxone restructuring, and Disney is expected to return to more consistent profitability after COVID is under control. Time will tell whether they do, and I am optimistic that they will begin restoring their dividends when they are comfortably able to.

Overall, I remain satisfied with the overall performance of the iPIG portfolio and am incredibly happy that its total dividend picture remained so strong given all the headwinds facing the economy and dividend paying companies in general. It's certainly a testament to the value of looking beyond just the dividend and to a company's balance sheet and operations as well.

Regards,
-Chuck
Discovery/HR Home Fool
Disclosure: I own shares of Disney and of TEVA Pharmaceuticals.
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