A Different Kind of Present

This year, I gave my sons a different kind of Christmas present. I gave them seed money, provided they open an account at Loyal3.com and committed to buying $30 in shares (of any stock that Loyal3 trades), every month, for 30 years. That's about a dollar a day. They all seem to be fired up to give this a go! I'm a happy dad...

My sons are like most young people today. They don't like us to tell them what to do. They don't particularly want our advice, either. They want to make up their own minds. They want to be independent. They want the right to choose and even the right not to choose. They seek and accept advice from anybody who's not their parent, a teacher, or another "older" person that don't get young people or the struggles they face. 

Yield Matters

One of my selection criteria for DivGro is dividend yield. I prefer a dividend yield of at least 2.75% for regular stocks and a distribution yield of a least 6.75% for MLP stocks. This year, most of my buys in DivGro had initial yields exceeding these minimum levels. The exceptions were TRV, with an initial Yield on Cost (YoC) of 2.32%, ACE (initial YoC of 2.45%), TGT (initial YoC of 2.73%), and WAG (initial YoC of 2.22%).

Of course, there are many more solid dividend payers with yields below 2.75%. In the list of Dividend Champions (stocks with 25 consecutive years of dividend increases), you'll find stocks like Lowe's (LOW), Wal-Mart (WMT), Archer Daniels Midland (ADM), 3M (MMM), T. Rowe Price (TROW), and Colgate-Palmolive (CL). Currently, they all yield less than 2.75%. Even stocks I've managed to buy while they offered yields above 2.75%, now offer smaller yields: XOM (2.55%) and AFL (2.25%).

Goals for 2014

With less than 3 weeks to go in 2013, I want to set new goals for DivGro for 2014.

After having set some challenging goals for 2013, I've reached three of them by October 6 this year. One can argue that perhaps my goals were not quite challenging enough. Nevertheless, I'm happy that I've come this far and that, soon, I'll be celebrating the 1-year anniversary of DivGro!

For 2014, I've set 4 new goals for DivGro:

Dividend Increases, December 1-15, 2013

Regular dividend increases are important for stocks in a dividend growth portfolio. Since companies must grow their earnings sufficiently to continue to afford their growing dividend payments, monitoring dividend increases over time is one way to assess the long-term health of dividend paying companies.

Every month, I report dividend adjustments to stocks in my watch list.  I compile information from a screening feature available to subscribers at Dividend.com. In addition to monitoring changes that might influence my assessment of a stock's attractiveness, I do this to keep track of yield on cost (YoC) for stocks I own.

Recent Buy: WAG

Dec 10, 2013: Bought 44 shares of WAG at $56.72 per share.

Walgreen Company (WAG), also known as Walgreens, is headquartered in Deerfield, Illinois. The company operates drugstores in more than 8,000 locations across the U.S. In addition to selling prescription drugs, WAG also sells over-the-counter medications, household items, food and beverages, personal and beauty care products, and photofinishing services.

WAG is a Dividend Champion with an impressive 38-year streak of dividend increases. It pays quarterly dividend in March, June, September and December. Starting Yield on Cost is 2.22%.

Recent Buy: BAX

Dec 9, 2013: Bought 37 shares of BAX at $67.71 per share.

Founded in 1931 and headquartered in Deerfield, Illinois, Baxter International, Inc. (BAX) is a global, diversified healthcare company with expertise in medical devices, pharmaceuticals, and biotechnology. BAX manufactures products in 27 countries and sells them in more than 100 countries. The products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctor's offices, clinical and medical research laboratories, and by patients at home under medical supervision.

With a modest 7-year streak of dividend increases, BAX is a Dividend Challenger. It pays quarterly dividends in the months of January, April, July and October. Starting Yield on Cost is 2.89%.

Recent Buy: TGT

Dec 4, 2013: Bought 40 shares of TGT at $62.90 per share.

Target Corporation (TGT) sells a range of general merchandise and discount food products in nearly 1,800 stores in the United States and 124 stores in Canada. TGT offers both everyday essentials and fashionable, differentiated merchandise at discount prices. TGT operates as a single business segment and has a fully integrated online business, Target.com. Although relatively small to TGT's overall size, sales at Target.com are growing much faster than in-store sales.

TGT is a Dividend Champion with an impressive 46-year streak of dividend increases. It pays quarterly dividend in March, June, September and December. Starting Yield on Cost is 2.73%.

Recent Buy: NU

Dec 4, 2013: Bought 60 shares of NU at $41.02 per share.

Northeast Utilities (NU) is the parent company of Northeast Utilities system. Incorporated in 1927, NU is engaged in delivering energy through wholly owned subsidiaries. NU serves more than 3.6 million electric and natural gas customers in Connecticut, Massachusetts, and New Hampshire.

NU is a Dividend Contender with a 15-year streak of dividend increases. It pays quarterly dividends of $0.3675 per share in March, June, September and December. Starting Yield on Cost is 3.58%.

Recent Buy: SJR

Dec 4, 2013: Bought 105 shares of SJR at $23.03 per share.

Shaw Communications Inc. (SJR) is Canada's largest broadcast service provider. The company operates in two business segments, Cable and Satellite, providing broadband television, Internet, digital phone and telecommunications services, as well as satellite direct-to-home services and entertainment programming content.

With an 11-year streak of dividend increases, SJR is a Dividend Contender. It pays monthly dividends. Starting Yield on Cost is 4.30%.

Bonus Deposit, December 2013

On Tuesday, December 3, I deposited another $10,000 cash into my DivGro portfolio. The bonus deposit is in addition to my regularly scheduled deposits of $1,000 per month. I've updated my Portfolio page, now showing available cash of $12,610. I'll be looking to buy more fair-valued dividend growth stocks in the next few weeks.

This is the fourth bonus deposit I've made. One reason I'm making these bonus deposits is to boost available cash in DivGro. I'm still expanding the number of holdings in DivGro, and, because I prefer to allocate about $2,500 to new buys, my regular deposit of $1,000 per month is not nearly enough to cover at least one new buy per month!

7 Dividend Growth Candidates for December, 2013

I've just updated my watch list of dividend growth stocks. To evaluate candidates in my watch list, I score them based on selection criteria and assign a star rating to each candidate out of a maximum of 7 stars.

This month, the top ten stocks are CHL, INTC, NTT, CVX, BBL, COP, LMT, RCI, MSFT and IBM. I already own shares in the highlighted stocks. CHL, INTC, NTT, and CVX are 7-star stocks. The others are 6-star stocks.

Because I'm still expanding the number of holdings in DivGro rather than adding to existing holdings, I look for 7 stocks that I don't own yet, for further analysis. The 7 candidates for December are: