Dave Van Knapp's Dividend Growth Portfolio

 

 

 

 

What Happened in February 2017

  • Received $350 in dividends. Year to date total is $528 received.
  • Used accumulated dividends to purchase shares in Qualcomm (QCOM), opening a new position for the portfolio.
  • The portfolio’s current yield is 3.6%, down 0.2% from last month. The yield varies month-to-month as dividend payouts and stock prices change. Minor variations don’t mean much.
  • The portfolio’s yield on cost – the annual dividend divided by the portfolio’s original value in 2008 – is now at an all-time high of 7.7%. That is, the portfolio is now generating income at the rate of 7.7% of the original amount per year.
  • The portfolio ended the month worth $100,290. It was up 5.1% in February and 6.4% for 2017 to date.
  • The portfolio is up +114% over its lifetime (8.8 years). That includes reinvested dividends.

Holdings in the Dividend Growth Portfolio

Updated February 28, 2017:

Capture

Transactions in February

The portfolio received dividends from AT&T, Alliant Energy, Hasbro, Omega Healthcare Investors, Procter & Gamble, and Realty Income in February. The dividends totaled $350.

That influx of cash pushed the portfolio over the $1000 trigger to make a new investment. As detailed in the next section, I used the money to buy shares in Qualcomm (QCOM), which is a new position for the portfolio.

Dividend Reinvestments

I collect and accumulate incoming dividends in cash. I reinvest them when they hit $1000.

As detailed in this article, I used cash from accumulated dividends to purchase 18 shares of Qualcomm on February 16. As a new position, Qualcomm joins Cisco, Southern, and Boeing that have joined the portfolio since the beginning of 2016.

The addition of Qualcomm adds about $38 per year to the portfolio’s income, or about 1%. With the new position, the portfolio is now up to 20 positions vs. a target of 20-25.

Dividend Increase Calendar for 2017

The table below shows the schedule of dividend increases for 2017. The right-hand column shows 2016’s increases for comparison.

CaptureEight increases have already been announced for 2017. Three of them are larger than 2016’s increases. The new stock, Qualcomm, should increase its dividend in June.

I am still keeping my eye on HCP, which cut its dividend last year. HCP declared its quarterly dividend payable in March without announcing an increase. The dividend remains unchanged from its last quarterly payment in November, 2016. The dividend was not mentioned at the quarterly conference call on February 13. I do expect the company to announce an increase in 2017.

12-Month Anticipated Dividends

First, an apology. The chart displayed last month from E-Trade was erroneously high by around $100. I regret the error.

Here is the current display by E-Trade of expected dividends over the next 12 months. Because the chart reflects no unannounced dividend increases, the actual income for the next 12 months should be higher. The estimated amounts (shown in purple) are simply extensions of current payout rates.

CaptureI use the projected 12-month total to calculate the portfolio’s yield on cost: $3582 / $46,783 = 7.7%. That is the all-time high for this portfolio.

Yield on cost is the portfolio’s yield is on the original money invested when I started the portfolio. The portfolio is now sending me 7.7% of its original value each year in the form of dividend income.

I also use the 12-month projection to calculate current yield: $3582 / $100,290 = 3.6%. In other words, the portfolio is yielding 3.6% on its current value, based on the latest numbers available.

Consistent Dividend Growth

The Dividend Growth Portfolio is designed to generate a steady stream of growing dividends. I eventually intend to live off the income in retirement (whereas now I reinvest the income).

Increases in the portfolio’s dividend stream come from two sources.

  • Companies raise their dividends regularly. See the Dividend Increase calendar above.
  • New shares are added through dividend reinvestment, as exemplified by February’s purchase of Qualcomm. The new shares generate dividends of their own, thus increasing the total income cash flow.

The bar graph below shows the dividends that I have received each year since the portfolio was started.

The 2017 and 2018 green bars are estimates. The red dot shows actual dividends received so far in 2017 ($528).

The rising green bars illustrate the core goal of dividend growth investing: Growing income.
CaptureTotal Return

Dividend growth investors get good total returns too. Collecting shares of quality companies, reinvesting dividends, and purchasing at good valuations tends to produce good total returns as well as a healthy income stream.

The value of the portfolio has grown 114% from its original size in June, 2008. It started with $46,783. It is now worth $100,290.

If the same money had been invested in the S&P 500 Index via the ETF called SPY, with dividends reinvested, it would have increased 103% to a total value of $94,969.

SPY’s current yield is about 2.0% compared to my portfolio’s yield of 3.6%.

Background: What is the Dividend Growth Portfolio?

CaptureTo see the Business Plan for this portfolio, click here. To learn more about the origins of the portfolio, see An Introduction to My Real-Money Dividend Growth Portfolio.

Remember, the DGP is not presented as best or a model. Rather, its purpose is to provide a live demonstration of what you can accomplish with dividend growth investing, and what it is like to run a real portfolio.

– Dave Van Knapp

For a list of all of my articles about my portfolio, see below.

Dividend Growth Portfolio Articles

I Just Bought 18 Shares of Qualcomm (QCOM) for My Dividend Growth Portfolio- February 21, 2017
I Just Bought Another $1,000 Worth of Cisco (CSCO)
- November 3, 2016
I Just Bought Boeing (BA) For My Dividend Stock Portfolio
- August 10, 2016
I Just Bought 45 Shares of Southern Company (SO)
- May 6, 2016
I Just Bought 47 Shares of Ventas (VTR)
- April 14, 2016
I Just Bought 60 Shares of Cisco (CSCO)
- February 16, 2016
I Just Sold My Shares of Kinder Morgan (KMI)
- December 14, 2015
I Just Bought Another 30 Shares of AT&T (T)
 - November 23, 2015
My Dividend Growth Portfolio Delivers a 7%-Plus Yield on Cost Already
 - October 17, 2015
I Just Reinvested $1,000 in Philip Morris International (PM) – August 27, 2015
I Just Bought Another 24 Shares of Coca-Cola (KO)
– May 26, 2015
Why I Decided to Hold All 19 Stocks in My Dividend Growth Portfolio
– April 15, 2015
Why I Sold Some Johnson & Johnson (JNJ) and Pepsi (PEP) – January 24, 2015
I Just Bought Another 30 Shares of AT&T (T) - January 14, 2015
This Portfolio Generates Dividend Income That Rises 15% Per Year - November 10, 2014
I Just Bought More Shares Of Procter & Gamble (PG) - October 1, 2014
I Just Sold Lorillard (LO) and Bought HCP Inc. (HCP) - July 16, 2014
This Real-Money Portfolio is a Cash Machine - July 10, 2014
I Just Bought Ventas (VTR) for My Real-Money Portfolio - May 28, 2014
I Just Sold Darden Restaurants (DRI) - April 11, 2014
Why I Sold All of My Shares of Intel (INTC) - March 31, 2014
An Introduction to My Real-Money Dividend Growth Portfolio - March 15, 2014



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