Passive Income – GILT Dividends

I added $GILT to my passive income portfolio at the beginning of 2021. I did it because the ex-dividend date was on 1/8/2021 and I saw that it had a low price with a history of big dividend payouts.

Albeit it is a short dividend history.

I’ve written that my goal is to build up a passive income portfolio. My measure of success will be when I generate a $100,000 a year income, and right now GILT is part of that strategy.

The angle here was to buy 200 shares for $1,400, net the dividends, and keep it going. That’s the main one but here are the reasons WHY I zeroed in on this company.

Some Attractive Fundamentals

As of this post date, GILT has negative earnings of -$0.07 per share. Not great, but it’s paying on a decent dividend yield of 3.75%. The only drawback is that it pays dividends yearly. You’d have to wait a whole year before getting more dividends! Still, if you bought GILT before the Ex-Dividend date, you would be netting $0.63 per share of dividends on 1/20/2021. Wowzers!

It might pay a special dividend in the latter part of the year but that’s ok, I’ll take my money now and reinvest it! I use TD Ameritrade, and pay zero dollars in commission for buying GILT. I’ll pay zero dollars for reinvesting my dividends too!

With my 200 shares that would be $126 in dividend income. Again, assuming GILT stays at $7 a share, this would net me 18 more shares!

A drawback I see is that GILT is trading around $7 a share. That’s pretty low and I don’t always buy low-priced stocks. There’s something about owning stocks with rich prices, everyone wants them! When they’re low, you wonder why. Still, I’m Bullish on them. Their satellite technology that enables 5G communications and 5G is a win in my book.

The other fundamental I like is that it has a pretty low Beta, it’s 0.65. The big risk I’m making here is that it has negative earnings. You never know if earnings will collapse and take the stock with it. Still, it’s just below $0, so it could become profitable at the next earning’s call in May.

My mitigation for that risk is that I bought a small number of shares in my tax-deferred IRA account. I could sell this stock after the payout date, net my dividends, and not worry about the short-term capital gains. Of course, this means I have to stay vigilant all the time and be active in the market, which isn’t my passive income strategy at all!

$126 down, $99,874 to go.

GILT Update 2022

I wrote this post just over a year ago and watched GILT’s stock price shoot up to $22 a share after I bought it. Now the share price has dropped to just above where I bought it. So far I haven’t lost any money and I’ve made a bit from my dividends.

The thing with dividend investing is that you want to buy high-quality companies, this way you know that they’ll continue to perform over time and make you money.

Companies like GILT play the dividend game to attract investors. I’m not knocking GILT, I knew what I was getting into back then. I was seduced by the high dividend yield just as I am today. Its dividend yield is over 13% and the dividend is expected to be $0.99.

I will continue to happily reinvest my dividends into more shares and leave it at that. I’m not betting the farm on this company and I have just enough level of risk invested in GILT to let me sleep at night.

Disclosure: Still Long GILT

My Passive Income Rose 500% Last Year

I used to write a lot about my Dividend Investing and Passive Income Experiment on my other blog, Neural Market Trends. I decided to stop writing about it there because it was diluting what that blog was about, machine learning and AI.

Heck, I haven’t been writing much about that topic since I started writing here and on Medium over the summer. So it was a surprise when I got a notification that my investment statement was ready and I noticed a big number in the dividends column.

So I decided to bring the conversation here, to this blog, and see where it takes me.

In 2021 I started to allocate some of my savings into stocks, ETFs, and mutual funds that generate dividends and income. I’m at the point in my life where I have built up a decent nest egg and have been lucky to ride the tech growth boom.

I’m trying to retire in 9 years — hopefully, sooner — so my investment strategy has shifted to more of these dividends and income-producing assets. Granted, I have to pay taxes on them right now — and I’m OK with this — I’m just plowing back all the gains into more shares.

For dividends only, I increased my passive income by over 500%. This number is higher when I add in the capital gains distributions but I’m just focusing on dividends right now.

In 2020 I made $1,079 in dividends and in 2021 I made $6,079.

Dividend Summary
Dividend Summary Chart

Granted, I can’t live off of $6,079 BUT the experiment showed me that with due diligence, thoughtful planning, and reinvesting, I could eventually live off this without touching my invested capital!

DANG folks! This is real passive income!

I started this experiment because, at the end of 2020, my partner read off her the number of dividends her retirement portfolio generated that year. It was to the tune of $50,000.

$50,000! Holy crap Batman!

That sum of money is nothing to sneeze at and quite honestly is a livable income in low cost of living areas of the United States. Hell, you could live like a king in places like Costa Rica or Thailand on that income.

Generating passive income to live on is doable. I was always told it was but seeing is believing and I’m going “all-in” in 2022.

Read my 5 Tips to Building a Dividend Passive Income Portfolio post on how to get started.