Monthly Review, August 2014

At the end of every month, I review the month's actions with regards to DivGro, my portfolio of dividend growth stocks. At the same time, I update my blog's Performance page, which provides a central place for reviewing DivGro's status and performance relative to prior months and the markets.

In August, I added two new stocks, PM and DE. DivGro now has 34 different holdings, so I'm almost at my goal of 36 holdings balanced across the 10 sectors in my watch list. In the next few months, I need to add three stocks in the Consumer Discretionary sector, and one each in Consumer Staples, Financials, Industrials, Materials and Utilities.

Dividend Increases, August 16-31, 2014

After last month's nosedive on the last trading day, the S&P 500 crossed 2,000 while the Dow is back above 17,000. The markets closed on a high note despite the U.K. raising their terrorist alert level to Severe in fear of possible ISIS attacks in Britain and Russia's apparent invasion of the Ukraine. And, the Middle East remains a mess.

I wonder if these geopolitical factors eventually will take a toll on the markets. Many commentators suggest that a significant correction is imminent. The thing is, as long as everyone is calling for a significant correction, it likely won't happen. Stocks probably will continue to climb the wall of worry.

Either way, as dividend growth investors, these issues shouldn't influence our thinking too much. As I said last month, dividends are not affected by stock market volatility, at least not the kind of dividends we're after...

New Blogroll Page

I've been working on an extensive blogroll focusing on dividend growth investing (DGI) and other forms of passive income generation. There is a surprising number of blogs out there and I find it fascinating to scan them from time-to-time to see what others think about these topics. Sometimes, someone else's unique way of thinking spawns new ideas in my mind...

There is a wealth of information in such a large collection of blogs. Of course, it requires work to combine and distill the information. In February, I did such an exercise and wrote my most popular post so far. I compiled a spreadsheet containing the combined holdings of 20 publicly available portfolios, counting the number of appearances of each ticker. The 4 most popular dividend growth stocks, based on this composite view, were MCD, CVX, JNJ and KO.

Dividend Increases, August 1-15, 2014

Time again to report on dividend increases announced for stocks in my watch list. One of the stocks I own (WAG) announced a 7.14% increase. As a result, WAG's Yield on Cost (YoC) and DivGro's projected annual dividend income will be adjusted.

I monitor dividend increase announcements as a way to identify new candidates for purchase. When companies announce dividend increases, they show confidence in being able to pay increased dividends. Companies that make aggressive increases pique my interest and I usually take some time to look them over.

What is a Liebster Award?

Today, Passive Income Pursuit nominated DivGro for a Liebster Award. After feeling honored to have been nominated, I had to Google "Liebster Award" to find out what this was all about. Sopphey Says it is "kind of like a chain letter" in which one blogger nominates 5 other bloggers to answer 5 questions; and then nominates 5 more bloggers for a Liebster Award, with a new set of 5 questions to answer...

Apparently, Liebster is German for dearest, an adjective than means most loved or cherished or a noun that is an affectionate form of address to a much-loved person. Although I'd like to claim those definitions, The Free Dictionary's definitions are probably more appropriate: greatly valued; precious; highly esteemed or regarded...

Recent Buy: DE

Aug 8, 2014: Bought 30 shares of DE at $86.23 per share.

Founded in 1837, Deere & Company (DE) is engaged in the production and distribution of agricultural and forestry equipment, construction equipment and engines, worldwide. A credit subsidiary, John Deere Capital Corporation, is one of the largest equipment finance companies in the United States with more than 2.4 million accounts.

DE is a Dividend Contender with a streak of 11 years of dividend increases. It pays quarterly dividends in February, May, August and November. The current dividend is 60¢ per share, so starting yield on cost is 2.78%. DE's 5-year dividend growth rate is 13.43%.

Recent Buy: PM

Aug 5, 2014: Bought 31 shares of PM at $81.29 per share.

Headquartered in New York City, Philip Morris International Inc. (PM) is the leading international tobacco company, with seven of the world's top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PM's products are sold in more than 180 markets.

PM is a Dividend Challenger with a streak of 6 years of dividend increases. It pays quarterly dividends in March, June, September and December. The current dividend is 94¢ per share, so starting yield on cost is 4.63%. PM's 5-year dividend growth rate is a solid 28.4%.

10 Dividend Growth Stocks for August, 2014

At the beginning of every month, I use Dave Fish's CCC list to search for stocks trading at a discount to fair value. This year, in an effort to balance my portfolio holdings across all 10 sectors in my watch list, I search for the best available candidates by sector. Until DivGro is nicely balanced, I'll continue to bias purchases to sectors that are under-represented, but only if I can identify candidates with good dividend yields and strong dividend growth rates trading at a discount to fair value.

Monthly Review, July 2014

During the month of July, we visited South Africa, taking a break from our usual activities. We had a wonderful time hiking the Otter Trail and visiting two national parks, Addo Elephant National Park and Kruger National Park. Of course, the best part was that we got to experience all of these with our extended families.

I took some time during my break to work on DivGro, adding one new stock, IBM, and writing quarterly and midway review posts. I'm happy with DivGro's performance and it seems like I'm in good shape to meet my goals for 2014.

In July, DivGro set another new record for monthly dividend income, namely $396! That is a tremendous increase over last July, when I earned only $45 in dividend income. DivGro now has a market value of $105,413 and is delivering an average yield on cost of 5.06%. Projected monthly income is $372, up from $366 at the end of June.