DPS is a Dividend Challenger with a 6-year streak of annual dividend increases. The company pays quarterly dividends of 48¢ per share in the months of January, April, July and October. At the current price of $93.20, the stock yields 2.06%.
DPS is the 13th stock that I'm transferring from my portfolio at Scottrade to DivGro.
Previously, I've transferred the following stocks:
|Coca Cola (NYSE:KO)|
|Toronto-Dominion Bank (NYSE:TD)|
|Proctor & Gamble (NYSE:PG)|
|Texas Instruments (NASDAQ:TXN)|
|Union Pacific (NYSE:UNP)|
|Dominion Resources (NYSE:D)|
|Gilead Sciences (NASDAQ:GILD)|
|W.P. Carey (NYSE:WPC)|
|Reynolds American (NYSE:RAI)|
In the process, I've added $1,595.04 in past dividends to DivGro's total dividend tally and $1,097.17 to DivGro's projected annual dividend income.
|2014-03-25||Bought: 38 shares of DPS at $52.74 per share:||$||2,004.28|
|2014-07-03||Dividend on 38 shares at 41¢ per share:||$||15.58|
|2014-10-03||Dividend on 38 shares at 41¢ per share:||$||15.58|
|2015-01-07||Dividend on 38 shares at 41¢ per share:||$||15.58|
|2015-04-07||Dividend on 38 shares at 48¢ per share:||$||18.24|
|2015-07-07||Dividend on 38 shares at 48¢ per share:||$||18.24|
|2015-10-02||Dividend on 38 shares at 48¢ per share:||$||18.24|
|2015-11-16||Bought: 32 shares of DPS at $87.08 per share:||$||2,786.52|
|Total Capital Invested||$||4,790.80|
|Total Dividends Received:||$||101.46|
With this transfer, DivGro's projected annual dividend income increases by $134.40.
The following chart shows a 2-year history of DPS's share priceand indicates when I bought shares. So far, DPS has performed quite well for me. My investment is up by 38%, or 47% annualized.
Here are some reasons I like DPS and why I decided to transfer the shares to DivGro:
- While the stock yields a modest 2.06%, the stock's performance has been stellar in the past 24 months. Dividend growth is solid and steady (5-year DGR is 18%).
- DPS is in a good position to continue buying back shares. The company has already spent $404 million on share buybacks. At the current price, DPS can buy back 5 million shares per year and reduce the outstanding share count by 2.5% per year. This would allow the company to increase its dividend by the same amount without having to fork over more cash in the process.
- The most recent earnings report shows surprisingly strong numbers in key areas. Adjusted free cash will likely come in around $825 million for the current financial year.
- The company is growing fast in Mexico and Latin America.
- DPS faces lower reinvestment needs than peers due to a more limited geographic exposure. As a result, the company enjoys higher free cash flow as a percentage of net income.
Thanks for reading! Please share your thoughts on DPS as a dividend growth stock below.