As I type this update, we sit just
three weeks one week away from Christmas. My kids are getting more excited by the day, and my 3-year-old still hasn’t quite figured out why it isn’t already Christmas since the tree is up and Christmas songs are playing on the radio.
However, the purpose of this post isn’t to look ahead, it is to review the past month, and November was another excellent one for both myself and the portfolio.
November was a whirlwind, as a looming deadline at work brought on overtime hours, and two road trips to see family resulted in over 2,000 miles traveled.
December has followed with much the same, with Christmas shopping, family visits, kid’s activities, and even more deadlines at work.
Needless to say, I haven’t had much time to manage my portfolio. Other than a quick glance a few times a week to see my balance, it’s pretty much been on auto-pilot the last few months.
Fortunately, a dividend growth portfolio doesn’t need much in the way of management. The work is done on the front end with the initial choice of stocks. Once that is complete, it is pretty much a set and forget process.
So while I’ve enjoyed life spending time with my wife and kids, traveling, and visiting family, the income being generating by my portfolio continues to grind higher on its own.
This is my favorite part of dividend growth investing; I don’t need to worry about whether the portfolio value is up or down, and I don’t need to micro-manage the portfolio in any way. I just buy quality stocks, and know with near certainty that my income will continue to increase as time passes by.
November Dividend Income Report
Enough talk about income growth, let’s take a look now at how the portfolio actually performed during the month of November.
Here is the income breakdown for November, and how it compares to 2016’s numbers:
The 42.8% income growth is an eye-popping number, but that was helped tremendously by a few purchases made in the portfolio.
During the last year there were shares added in AbbVie $ABBV, Abbot Labs $ABT, CVS Health $CVS, Lowe’s Companies $LOW, Omega Healthcare Investors $OHI, and Tanger Factory Outlet Centers $SKT, which created big increases to the dividend payouts due to higher share counts.
However, even taking those buys out of the equation there was still some nice gains from the other positions in the portfolio. Apple $AAPL, Ameriprise Financial $AMP, and Thor Industries $THO produced double-digit income growth, and Realty Income was nearly there at a 9.6% gain.
General Mills $GIS and Kinder Morgan $KMI were the laggards at 5.6% and 2.4%.
Kinder Morgan grew despite having the same dividend rate, as dividend reinvestment added more shares throughout the year. However, this will change in 2017, as the company has guided for a 60% dividend increase in Q1 of 2018.
Chatham Lodging Trust $CLDT, STAG Industrial $STAG, and AT&T $T were similar in that they had zero or minimal increases to the actual payout, yet provided 6-7% income growth due to reinvestment.
Examples like them are a reason why I like to have a few higher yielding companies in the portfolio. Their high yields brings up the average yield for the portfolio (currently 2.97%), and even if they don’t grow the dividend payout much organically, I still get higher income over time with dividend reinvestment.
Dividend Income History
Here is the updated table of dividends collected in the portfolio over the last 5 years:
The income growth has been tremendous in 2017, as the quarterly increases have generally been around the 20% mark thus far. This was a pleasant surprise following last year’s 15.6% income growth, and is well above my target of 10% annual income growth.
I’m also on pace to set a new income milestone this year, as I need just $211.20 to hit the $2,000 level in income. This is fantastic news, and really gets me excited about what the future holds!
Recent Dividend Increases
Speaking of the future, on the back of these November dividend increases, my projected income has now passed the $2,100 mark.
|Announce Date||Company||Ticker||Previous Payout Rate||New Payout Rate||Sequential Increase||Year Ago Payout Rate||YoY Increase||Dividend Yield|
|11/2/2017||Stag Industrial Inc||STAG||$0.1175||$0.1183||0.71%||$0.117||1.43%||5.04%||LINK|
|11/16/2017||MDU Resources Group Inc||MDU||$0.1925||$0.1975||2.60%||$0.193||2.60%||2.97%||LINK|
|11/16/2017||Union Pacific Corporation||UNP||$0.6050||$0.6650||9.92%||$0.605||9.92%||2.01%||LINK|
|11/20/2017||Becton Dickinson and Co||BDX||$0.7300||$0.7500||2.74%||$0.730||2.74%||1.35%||LINK|
Starbucks, Nike, and Union Pacific all gave some nice raises, while some of the others were a bit smaller. Becton Dickinson is working through an acquisition, so its smaller raise isn’t a surprise, and STAG Industrial has guided for a lower payout ratio, so no surprise there either.
All in all, I’m happy with the announcements, as the 7.41% increase along with the 2.33% yield gets me close to the 10% income growth target for the portfolio.
Industrial Sector Update
For those who may have missed it, I finished updating my Industrial Sector Watch List last week, and wrote up an article on Seeking Alpha presenting my Top Ten Industrial Stocks for dividend growth and income.
The sector is expensive (as is the overall market), but I think there are still some attractive investment opportunities in the sector.
Please check it out, I’d love to hear your thoughts on my picks!
November was another excellent month for my dividend growth portfolio, and December is well on its way to a good one as well.
I am on track to hit the $2,000 mark in dividends collected this year, and with some big increases already announced, that number will continue to grow in the months ahead.
I hope this update finds all my readers well, and I wish you all a Merry Christmas and Happy New Year!