4th of July festivities may have ended, but I’m still celebrating after tallying up the last of the dividends received during the month of June.
It was another successful month in the portfolio, as dividend income increased by 11.5% over 2016, and by nearly 2% over Q1. This increase was driven by add-on purchases of two companies I already owned, reinvestment of dividends, and organic dividend increases to dividend payouts.
Cracker Barrel Old Country Store, Inc. $CBRL served up my favorite menu item last week…another dividend increase! It added a cherry on top in the form of a special dividend, further adding to my portfolio income.
The last of my April dividends hit the account on Monday, allowing me to update the DGI For The DIY portfolio spreadsheet and see the progress made in the portfolio.
Here are the final income numbers for the month, along with a comparison to 2016’s totals:
The portfolio saw a 10% increase in dividend income over 2016 totals. This increase comes from a combination of organic dividend increases, reinvestment of dividends, and purchases made over the last year.
Ameriprise Financial Inc. $AMP is a company rarely mentioned among the top stocks in the financial sector. However, despite the lack of recognition it has been one of the better performers over the last decade, providing investors with 10.7% annualized total returns against 6.5% from the S&P.
I am all smiles after a handful of dividend increases were announced in the DGI For The DIY portfolio. Over the last two weeks, 5 more companies declared new dividend rates, providing me with another nice boost to my income.
Two weeks ago I published my predictions for the 11 dividend increase announcements there were expected in my portfolio during the first quarter. Shortly thereafter, Polaris Industries Inc. $PII announced a 5.45% boost to its dividend, which was a pleasant surprise to the upside compared to my prediction.
On February 7th, two more companies, Gilead Sciences $GILD and Church & Dwight Co., Inc. $CHD, announced their new rates. Before we discuss the increases, let’s take a look at my original prediction.
I got a nice surprise this afternoon when Polaris Industries Inc. $PII announced a 5.45% increase to the dividend by raising the quarterly payout from $0.55 to $0.58 per share.
Just yesterday I released my predictions for dividend increases in Q1, where I wrote this about my expectations for Polaris:
Polaris Industries Inc. (NYSE:PII) has really struggled the last year and saw earnings fall by nearly 50% in 2016. While they are expected to rebound in 2017, the payout ratio is well above the historical ~30% rate, which will likely lead to another minimal increase in the dividend. I am predicting a penny increase to $0.56, which is just 1.8% more than last year.
Needless to say, I am happy to see management step up and give a decent dividend boost despite the headwinds. It’s also good to hear management make a point to talk about the dividend, as it reinforces the fact that dividends are a top priority for the company.
This is what CEO and Chairman Scott Wine said in the press release (bolded by me):
“We are very proud of our 22-year history of increasing dividend payments. We have maintained a disciplined, consistent approach to returning cash to shareholders, and dividends remain one of the important ways we can deliver further value. We believe this most recent dividend increase underscores our confidence in Polaris’ future growth and profitability prospects, steady cash flow generation, and continued strong financial position.”
One of the great things I like about dividend growth investing is that by focusing on the dividend rather than the share price helps keep me from acting on emotion with my investments. It’s easy to throw in the towel during times like this when a company has a setback or two, sees earnings take a hit, and the share price suffers.
However, emotions of fear and dismay can cause one to sell out of a position at the worst time, often near the bottom before things turn around and shares head higher. This is something I personally struggle with, and am making a point of emphasis this year to limit turnover in my portfolio.
Polaris has certainly had its share of miss-steps over the last two years, and those coupled with a tough business climate has caused earnings to be cut in half. However, it deserves to be given a long leash considering its tremendous performance over the last two decades, which is why I continue to hold my shares.
Today’s announcement gives me some encouragement that I’m doing the right thing by doing so.
One of the more enjoyable aspects of dividend growth investing is being able to see my income grow on a consistent basis. Between the reinvestment of dividends and the organic growth produced by dividend increases, my portfolio income has been on a steady march higher since it was built in early 2013.
It’s a nice comfort knowing that my income will grow regardless of what the market is doing on a day to day, monthly, or quarterly basis. Even better, if the market does have a large correction, it actually works in my favor, as my dividends are reinvested at an even higher yield than they would have otherwise, further increasing my income.
Seeking Alpha contributor David Fish recently wrote a series of articles highlighting the Champions, Contenders, and Challengers that are expected to raise their dividends during the first quarter of 2017. This gave me the inspiration to take a closer look at the holdings in my portfolio, and see which ones are due to raise their payouts.
Between David’s list and my own tracking spreadsheet, I was able to find 11 companies that are likely to announce increases with their next declaration. Here they are, along with their recent dividend growth information:
I wrote up an article on Seeking Alpha providing my dividend growth expectations for each company, and my guess at the date that they will be announced.
If you are interested in seeing those predictions please follow the link below.