Actual Dividend Growth Portfolio

[Redlegs23]

Originally Posted by JaxRed

For example people that retired in early 2008 versus 2009 when the value was 50% less.

If people were less than a year from retirement and sitting in pure aggressive growth investments that would be pretty foolish.

[JaxRed]

Originally Posted by bucksfan2

Jax at what point do you start to diversify. I don't know enough about MAIN but at what point do you stat to add another dividend payer?

Do you look at lower yielding dividend growers or high yielding dividend growers? A company like VFC or IBM are known dividend growers but have yields right now less than 2%. Compare that with a VZ, T, SO, or AEP with yields of 4.5% or higher.

I only have $200 invested !!! I'll start diversifying after I have 10 shares or so.

Seeking Alpha which I highly recommend had an article discussing the "Periodic Table of Dividends" balancing yield versus growth on dividends.

http://seekingalpha.com/article/8748...end-contenders


This chart is excellent also

http://www.tessellation.com/dividends/streaks.html

[bucksfan2]

Originally Posted by JaxRed

I only have $200 invested !!! I'll start diversifying after I have 10 shares or so.

Seeking Alpha which I highly recommend had an article discussing the "Periodic Table of Dividends" balancing yield versus growth on dividends.

http://seekingalpha.com/article/8748...end-contenders


This chart is excellent also

http://www.tessellation.com/dividends/streaks.html

I was more interested in your strategy than your $ figures. When I first started investing I bought two companies and then added more as more funds became available. Once I got to the 10-15 stocks I quite adding individual stocks and started adding to my positions when a stock was sold off in a knee jerk reaction.

I was more curious to your method of dividend growers. I read an article in one magazine a few months back about Coke and how its yield of 3% now isn't all that impressive but if you had gotten in and held and collected all the dividend increases over the past decade your current yield would be much much greater.

[JaxRed]

The key (long run) is having stocks that increase dividends yearly so that you can get double compounding. Initially since I wanted to demonstrate monthly increases I chose a stock that paid monthly, has a nice yield, and does increase dividends.

[medford]

bucksfan2,

Don't quote me exactly, but I read an article a couple of weeks back that talked about Coke. If you had bought 1 share of Coke in 1920(something) and re-invested all of the dividends, you'd have $5 mil today. I think that is what Jax is trying to get at, companies w/ a strong history of growing dividends every year so that your 3% yield today will turn into a 5% yield (on your initial investment) tomorrow, a 10% yield (again on your initial investment) down the road and so on and so forth.

[JaxRed]

Well, another month has passed and we now have added our 3rd purchase of $100 worth of MAIN. Our future yearly income has gone from

Aug 2012 - $4.05
Sep 2012 - $8.10
Oct 2012 - $12.15

We have yet to receive any dividends, as our Aug purchase took place just after the ex-dividend date, so Nov 13th (and every month thereafter) we'll get some dividends.

Starting with our end of Nov deposit, we'll wait to bundle 3 months worth in order to cut down on commissions. We paid $4.95 a trade, and that occurs whether we have $100 or $300 to invest, so waiting 3 months gives us an extra $10 to invest.

[bucksfan2]

In an attempt to simplify my portfolio I am looking to get rid of one of these and put the proceeds in the other. RAI and PM.

RAI is Reynolds American Cigarette in the US. Pays a higher dividend 5.74% but are pretty much in a mature market.

PM is Phillip Morris International. They don't pay as high of a yield 3.91% but have more room to grow in the emerging market.

I am leaning to sell in my RAI and investing in PM. I think RAI is a safer play but PM has more growth opportunities as well as paying a nice dividend. Thoughts?

[kaldaniels]

1) Why didn't you get paid for the Sept ex-dividend day?

2) Am I correct that you have been buying 3 shares a month, if so, what is the exact amount you have invested each month, fees included.

3) It is very wise to bundle purchases (I would almost argue for bundling more than 3 months worth). You are getting killed paying 5 dollars for each 100 dollar transaction.

4) MAIN has a 6% yield right now, which is awesome. But generally when a dividend is that high, it comes with risk. Otherwise, money would be flying into the stock.

[JaxRed]

Originally Posted by kaldaniels

1) Why didn't you get paid for the Sept ex-dividend day?

2) Am I correct that you have been buying 3 shares a month, if so, what is the exact amount you have invested each month, fees included.

3) It is very wise to bundle purchases (I would almost argue for bundling more than 3 months worth). You are getting killed paying 5 dollars for each 100 dollar transaction.

4) MAIN has a 6% yield right now, which is awesome. But generally when a dividend is that high, it comes with risk. Otherwise, money would be flying into the stock.

1. Although this was our "August money" we didn't get set up till Sep 18th, just missing the ex-dividend date. So this month we'll have 6 shares for the Oct 17th ex-dividend date dividend. And 9 for next months.

2. We put $100 in each month but couldn't buy $100, between the cash in the account and the shares we are down by basically the commission. But this is about building a continuously growing dividend stream, not worrying in the short term about whether we are up or down. Long term, it will be up.

Since we are just getting started and wanted to establish a increasing flow of dividends, I did a couple things differently starting out. One is paying a commission each time, which I'll stop doing this month. And in the future I may go beyond 3 months.

3. One of the other things I did starting out was pick a stock that paid monthly and had a nice return. That limited my choices, but I am VERY comfortable with the risk involved with MAIN.

[JaxRed]

Originally Posted by bucksfan2

In an attempt to simplify my portfolio I am looking to get rid of one of these and put the proceeds in the other. RAI and PM.

RAI is Reynolds American Cigarette in the US. Pays a higher dividend 5.74% but are pretty much in a mature market.

PM is Phillip Morris International. They don't pay as high of a yield 3.91% but have more room to grow in the emerging market.

I am leaning to sell in my RAI and investing in PM. I think RAI is a safer play but PM has more growth opportunities as well as paying a nice dividend. Thoughts?

Most of the people that discuss this over at Seeking Alpha prefer PM. In my wife's portfolio we were in MO for a while and most seemed to prefer PM to MO.

Here's an article today from Seeking Alpha about them

http://seekingalpha.com/article/9775...s?source=yahoo

[medford]

If you're looking for monthly dividends, may be worth looking at GOOD (Gladstone), they've been paying out monthly dividends since I bought them in 2006 (and who knows how long before that) and managed to keep it thru the downturn in real estate stock. Paying out over 8% currently.

[JaxRed]

I will definitely explore them. I own a couple REITS in my wife's portfolio, and was considering Realty Corp (O) as next purchase for my daughter (this portfolio).

[medford]

IIRC, you were looking for companies that regularly increased their dividend. GOOD has kepth theirs pretty steady since 2006 when I bought it (.12 a month for a long period, .125 a month for the last 2-3 years) so it doesn't fall into that class. That could be a part of the large hit real estate took the last 4-6 years, perhaps its a statement along that they kept their dividend in place.

As a REIT, as I'm sure you know but others may not, it is required to return a certain % of all earnings back to its investors to hold onto the REIT classification.

Another place to look, though I'm not sure if any pay out monthly are Timber companies. Not only do they have a renewable resource (trees) that grow in value every year they remain in the ground, but they have the property that the trees stand on that generally increase in value every year (though that has been challenged the last 4-6 years)

again, thanks for posting this, its certainly interesting to watch.

[Boston Red]

Originally Posted by JaxRed

The key (long run) is having stocks that increase dividends yearly so that you can get double compounding. Initially since I wanted to demonstrate monthly increases I chose a stock that paid monthly, has a nice yield, and does increase dividends.

Love this strategy. It's (at least partially) why I own ADP, INTC, WMT, MCD, PG, and MCD. In 20 years (I'm 36), ideally dividends would account for a significant chunk of my financial needs.

[bucksfan2]

Originally Posted by medford

IIRC, you were looking for companies that regularly increased their dividend. GOOD has kepth theirs pretty steady since 2006 when I bought it (.12 a month for a long period, .125 a month for the last 2-3 years) so it doesn't fall into that class. That could be a part of the large hit real estate took the last 4-6 years, perhaps its a statement along that they kept their dividend in place.

As a REIT, as I'm sure you know but others may not, it is required to return a certain % of all earnings back to its investors to hold onto the REIT classification.

Another place to look, though I'm not sure if any pay out monthly are Timber companies. Not only do they have a renewable resource (trees) that grow in value every year they remain in the ground, but they have the property that the trees stand on that generally increase in value every year (though that has been challenged the last 4-6 years)

again, thanks for posting this, its certainly interesting to watch.

I own NLY, a "REIT" that pays a heck of a dividend but is pretty volatile. I have wavered on replacing it with IRC but have yet to do so. The problem is NLY deals CMO and CDO's and its dividend is all over the place.

Plum Creek Timber is a a Timber company that I have looked at in the past but haven't bought. I am heavy utilities and IMO this is along the lines of a utility. You would think that at timber company would benefit from housing picking up but you never know.

I am hoping to create a portfolio of solid dividend companies going forward. I like INTC but for some reason have never been able to pull the trigger on it.