Another eventful year in the market has come to a close, and that means it is time to provide a new update on my dividend growth portfolio.
This update is a bit different for me, as it is the first one I’ve made since starting this new website. I’m still trying to find balance between simply restating what I already said in my Seeking Alpha update, and providing some new insight here.
2016 was a good one for the markets, as the DJIA gained more than 15%, while the S&P gained 11% for the year. My portfolio also did quite well, putting up 15.6% income growth and increasing in value by 24.1% (including contributions).
Zeroing in on the dividends, the portfolio made good progress this year, despite some headwinds from the likes of Kinder Morgan Inc. $KMI, Norfolk Southern $NSC, Chevron $CVX and Exxon Mobil $XOM; the first of which cut its dividend in half, and the latter which saw little to no growth in their dividends.
The 15.6% increase in dividend income is above my goal of 12% growth, and is a pretty good accomplishment considering the headwinds seen by my oil & gas and industrial holdings. I expect to see similar results in 2017 as the dividend growth is carried by my REIT, technology, consumer discretionary, and healthcare stocks.
Speaking of healthcare, I ended 2016 by adding to several of my positions in the sector, which has now brought it up to a roughly 10% weighting in the portfolio. For a position breakdown of the portfolio’s composition today, here is a PDF of my spreadsheet.
Upon those moves, I’m not really seeing any sectors that I need to add to at this time. The REITs are heavily weighed, especially on the income side of the equation, but that is generally because of out-performance by Digital Realty $DLR and Realty Income $O, and because of the higher yields paid by them. At this point I’m not worried about too much exposure, as my intent was to build up those higher yielding positions first and then let the compounding of dividend reinvestment do its work going forward.
Looking ahead to 2017, I see some continued opportunities in healthcare, and have considered adding to my Gilead $GILD position. I would also like to make an additional purchase in Starbucks $SBUX, which has been a good performer for me.
I am also weighing the possibility of adding new positions to the portfolio, as I have several more on my wish list, including: NextEra Energy $NEE, Nike $NKE, VFC Corp. $VFC, 3M Company $MMM, American Water Works $AWK, and Aqua America $WTR.
It will likely come down to a matter of timing as to what gets added to the portfolio. It will take a combination of having funds available and getting a price opportunity to buy the stocks at fair valuation. I tend to invest new cash as soon as the $500 mark is hit, so whatever is most appealing at that time is where the money goes. Right now, NKE and VFC look the best price-wise, but that can all change over the course of the year. We shall see!
Add it all up, and I am quite happy with how things are progressing with the portfolio and my journey as a DIY investor. I have accumulated a solid portfolio of 51 companies, that are continuing to send ever increasing amounts of cash my way every quarter. I’m confident that this will ring true again in 2017 as well!
Very nice site Eric! Even better then when you first put it live.
Thanks Ray, I’m trying!
Dividends coming in are a definitely good feeling. Every time I see a dividend hit the account at end of the day, there is that internal smile that only you can sense that feeling.
Lots of portfolio growth in there also 🙂
d4f,
Completely agree, and with 51 positions in the portfolio (3 of which pay monthly), I get those internal smiles about 228 times a year! =)
Best wishes,
Eric
I enjoy learning about your portfolio as well as your watch lists. I added to GILD and TGT this week. My watch list includes many of your picks including AWK, MMM, and NKE plus LMT and NSC or UNP. Great blog post. ( I do agree that the ads in the middle of the article are distracting but I appreciate your openness with sharing your portfolio and choices!). Teresa
Teresa,
Thanks for the feedback on the ads, I’ve removed them the middle of the blog posts, but it appears I have a few other pages yet I need to clear up.
Really kicking myself for missing out on adding to my UNP last January when it was in the $60’s, there were some good deals back then, MMM too!
Best of luck on your GILD and TGT, thanks for stopping by.
Eric
You are on a great start with your new web site. The issue I have is adds in the middle of the article. I understand having adds but place them only on one side of the site. By placing adds in the middle its makes the site look and feel like all the other greedy web site. When I see these sites I tend to stay away and do not trust the articles.
I like to read articles without having to stop and think is this part of your article. This is a big distraction and just make your site look cheap.
If you really want to help other with dividend investment keep your site clean and simple.
Marty,
Thanks for visiting, and for sharing your concerns. I appreciate getting both the good and the bad from feedback, as pats on the back don’t help me make this thing any better.
Advertising is a balance I am trying to figure out as I get this thing up and running. I’ve put many hours into building this site, and ad revenue is really the only way I have to help compensate for the time put in.
I freely share all of the watch lists I’ve put together, and I will continue to add more of them to the site. I still feel that I am helping others, and the content I am providing more than offsets the negatives from an ad or two.
That said, I completely understand your frustration, and don’t want to create a bad user experience for readers. I will see what I can do about changing locations to make it less of a distraction for people.
Thanks again for taking the time to comment!
Eric