Dividend Increases, December 8-31, 2014

My last post for 2014 and it happens to the 100^th post of the year!

I wanted to finish out this year by reporting on recent dividend increase announcements for stocks in my watch list. Since my last post about dividend increases, only a handful of stocks announced increases. I own only one of these stocks, AT&T Inc (NYSE:T).

I monitor dividend increases for stocks in my watch because it is a convenient way to identify dividend growth candidates. Companies that increase their dividends regularly show confidence in future earnings growth. Another reason is that I track the yield on cost (YoC) of stocks in DivGro. When dividends increase, I make YoC adjustments and update DivGro's projected annual dividend income.

How Loyal Have You 3 Been?

Last year, I gave my three sons a different kind of Christmas present. I gave each of them seed money to open a Loyal3 account if they would commit to buying $30 in shares every month, for 30 years – about a dollar a day. They accepted the gift and started investing in January, each choosing one stock from the 50 or so offered at Loyal3.

This year, I turned the tables on them by asking for a different kind of Christmas present. I wanted them to e-mail me an update of their accounts and to do a little reflection on their first year as stock owners. I also wanted to nudge them into thinking about next year and their future as investors.

Goals for 2015

Happy Solstice Day! Today, the sun stands still in declination, having reached the highest position for an observer on the South Pole. For us in the Northern Hemisphere, today is Winter Solstice. The day is as short as it will be all year long (9 hours 33 minutes in San Francisco where I live).

Solstice day is a great day to set new goals for DivGro for 2015!

In my previous post, I reviewed my 2014 goals and reported that I've achieved all of them, essentially. The one goal I haven't achieved yet is one that I updated on 11 July 2014, to write 100 posts for DivGro instead of 72. This is my 98^th post, so I'm confident that I'll achieve that goal, too.

Before listing my 2015 goals, I'd like to state some assumptions and commitments:

Reviewing my 2014 Goals

I've been thinking about setting new goals for 2015. Before doing so, though, I'd like to review my 2014 goals.

I believe in setting stretching yet attainable goals. It is not useful to entertain goals that are impossible or even nearly so. On the other hand, setting goals that are simply attainable will not require special effort, nor would one feel a great sense of satisfaction in accomplishing them

Stretching goals demand extra effort and focus. They require commitment, patience, and constant monitoring. Sometimes, when progress is not sufficient, they require changing your approach entirely.

Recent Buy: CVX

Dec 16, 2015: Bought 25 shares of CVX at $102.97 per share.

Founded in 1984 and based in San Ramon, California, CVX is a multinational energy corporation involved in all aspects of the oil and gas industries, including exploration and production; refining, marketing and transport; chemicals manufacturing and sales; and power generation. CVX is the fifth largest integrated energy company in the world and conducts business in approximately 180 countries.

Chevron is a Dividend Champion with a track record of 27 consecutive years of dividend increases. It pays quarterly dividends of $1.07 per share in the months of March, June, September and December.

10 Dividend Growth Stocks for December 2014

Includes: ARLP • BBL • BDX • CPA • CMS • CVX • HMN • HP • IBM • KKR • NUS • PMT • T • UFS 

Every month, I use David Fish's CCC list to search for stocks trading at a discount to fair value. The CCC list is updated monthly and contains all U.S.-listed stocks that have raised their dividends for at least five consecutive years. The accompanying spreadsheet provides key statistics of all CCC stocks and is a wonderful resource for dividend growth investors.

The CCC list is divided into three categories based on the number of consecutive years of increases: Dividend Champions (25 or more years), Dividend Contenders (10-24 years), and Dividend Challengers (5-9 years). The latest list (dated 11/28/14) contains 589 stocks, with 105 Champions, 246 Contenders, and 238 Challengers.

Considering 589 stocks every month would be a daunting task. So, I apply a series of filters to reduce the CCC list to a more manageable number of candidates. With an ongoing goal of balancing my portfolio across all 10 GICS (Global Industry Classification Standard) sectors, I'm careful to retain a minimum number of stocks per sector.

To see the top 10 stocks and the 10 sector winners, please read this article at Seeking Alpha.

Dividend Increases, December 1-5, 2014

My watch list contains a subset of David Fish's CCC list. I use a series of filters to trim down the CCC list to a more manageable number of stocks (currently 288 stocks). I monitor dividend increases for stocks in my watch list to help identify dividend growth candidates worthy of consideration. Companies that increase dividends regularly show confidence in their future earnings growth potential.

In the first week of December, the following stocks in my watch list announced dividend increases. The table is sorted by last column, %Increase, and dividends are annualized:

Monthly Review, November 2014

November was a tough month for DivGro as one of my holdings, Seadrill Ltd (NYSE:SDRL) suspended its dividend. Following the dividend suspension announcement, the stock price plunged and has been sliding ever since. I am still contemplating next steps, which most probably would involve selling all or some of my shares.

I've had some good news to counterbalance the SDRL fiasco. Intel Corporation (NASDAQ:INTC) announced a dividend increase, which justifies my earlier decision to hold onto my shares. Many dividend growth investors got rid of their INTC shares because the company failed to raise its dividend for eleven straight quarters. I'm glad I did not sell my shares! INTC has been doing great since I bought 120 shares in January 2013. The stock price has increased 76% and I've received dividends equaling 7.42%.

Dividend Increases, November 2014

Last time I reported on dividend increases, I mentioned that I wanted to increase the frequency and format of these posts. My idea is to post dividend increases weekly (on weekends) so information would be timely and potentially actionable. I'm still working on a way to do this effectively, so this post is a catch-up post until I get the process in place.

I monitor dividend increases for stocks in my watch list for two reasons. First, it is a convenient way to identify dividend growth candidates because companies that increase dividends regularly show confidence in future earnings growth. Second, I track the yield on cost (YoC) of stocks I own. When dividends increase, I make YoC adjustments and update DivGro's projected annual dividend income. 

Win Some, Lose Some

My Cousin Vinny is one of my favorite movies. Dale Launer's 1991 screenplay is brought to life by great performances from Joe Pesci, Marisa Tomei and Fred Gwynne. Tomei won the Academy Award for Best Supporting Actress for her role. There is some wonderful dialog in the movie, including two passages at different times containing the title of this post. The first takes place between the title character Vinny Gambini (Pesci), who is pretending to be an experienced trial lawyer, and Judge Chamberlain Haller (Gwynn):

Judge: How long have you been practicing?
Vinny: Ooh, about six, uh... almost sixteen years.
Judge: Any murder cases?
Vinny: Quite a few. Yes.
Judge: What was the outcome?
Vinny: Um, you know. Win some, lose some.
Judge: This is not the forum to be cavalier.

Recent Buy: BBL

Nov 20, 2014: Bought 57 shares of BBL at $50.20 per share.

BHP Billiton is a diversified natural resources company and one of the world's largest producers of major commodities, including aluminum, coal, copper, iron ore, manganese, nickel, silver and uranium. BHP Billiton is a dual listed company comprising of BHP Billiton Limited (BHP) and BHP Billiton Plc (BBL). I'm buying shares in BBL, offered as American Depository Receipt (ADR) shares on the NYSE.

BBL is an existing holding, so I'm adding shares following substantial recent weakness in the stock price. I first initiated a position in June 2013, buying 43 shares at $58.39 per share and with an initial yield on cost (YoC) of 3.90%. With this buy, I'm averaging down to a per share price of $53.72. This time, initial YoC is a very respectable 4.94%.

Stock Analysis: Exxon Mobil Corporation

Exxon Mobil Corporation (XOM) is the world's largest publicly traded international oil and gas company. Founded in 1882 and based in Irving, Texas, XOM is engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other-energy related businesses. Approximately 83% of Exxon's earnings come from its operations outside the United States.

XOM is a Dividend Champion with 32 consecutive years of dividend increases. The company pays dividends of 69¢ per share in the months of March, June, September, and December. At the current share price of $95.11, XOM yields a respectable 2.9%. The five-year dividend growth rate is 9.68%.

From November 2004 through November 2014, XOM outperformed the S&P 500 by 14%, reaching an all-time high $104.76 on 29 July 2014. Since then, the stock price has dropped about 10%.

Please read the rest of this stock analysis and the conclusion I reach at Seeking Alpha. 

Recent Buy: HP

Nov 11, 2014: Bought 29 shares of HP at $85.57 per share.

Helmerich & Payne (HP) is a contract drilling company headquartered in Tulsa, Oklahoma. The company is engaged in the drilling of oil and gas wells for exploration and production companies. It has a fleet of 328 land rigs in the U.S., 32 international land rigs and nine offshore platform rigs. Another 24 rigs is scheduled to be completed, including HP-designed and operated FlexRigs under long-term contracts with customers.

HP is a Dividend Champion with an impressive 42-yr streak of dividend increases. It pays quarterly dividends in March, June, September and December. Initial yield on cost is 3.21%.

Dividend Increases, October 16-31, 2014

I'm rather late in reporting on dividend increases for the last half of October. My source for dividend information, dividend.com, is experiencing a system issue that is not allowing premium users to filter dividend increases by date. So far, my requests to have the issue fixed have not been addressed, which is rather disappointing. I'll probably cancel my subscription.

Out of necessity, I've developed an alternative method to find and report on dividend increases. This took some time, but I'm happy that I won't be depending on a service that is rather unresponsive to customer's requests and suggestions. (Twice, I've suggested a feature that would be significantly improve functionality and would be trivial to add, yet it remains "under consideration").

Along with this change in process, I'll be changing the frequency and format of these posts. Rather than posting twice a month, I'll report on dividend increases weekly. Doing so will allow me to do the work over weekends, which will be more convenient anyway. I'm still working on the new format, so look out for my next post on dividend increases!

Monthly Review, October 2014

Every month, I review the past month's activities relating 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 the markets and to prior months.

After selling two stocks in September due to dividend cuts, I had the luxury of having enough funds for three buys. I decided to add to my position in SDRL and I opened new positions in AVA and T. These buys increased DivGro's projected annual dividend income to $5,226. As a consequence, I've achieved one of my 2014 goals, namely to increase DivGro's projected annual dividend income to $4,800.

I'm close to achieving my other goal of reaching $3,600 in dividend income. At the end of October, dividend income totaled $3,163, so I'm only 12% away from achieving that goal.

10 Dividend Growth Stocks for November, 2014

One of my goals for 2014 is to balance DivGro's holdings across all 10 sectors in my watch list. Rather than targeting an equal number of holdings in each sector, I prefer to target a distribution proportional to the number of candidates in each sector of my watch list. The reason for not targeting an equal number of holdings in each sector is that there are many more dividend growth candidates in the Financials and Energy sectors, for example, than in the Materials and Telecommunication Services sectors.

I have a dynamic watch list, which means that the ideal sector distribution changes from month-to-month. I update my watch list every month when David Fish's CCC list is updated. The CCC list contains all U.S.-listed stocks that have raised their dividends for at least five consecutive years. David Fish distinguishes between Dividend Champions (25 or more years), Dividend Contenders (10-24 years), and Dividend Challengers (5-9 years).

A Giant Home Run with General Dynamics Corporation

Last night, the San Francisco Giants beat the Kansas City Royals 3-2 in game 7 of the World Series, giving the Giants their third World Series championship in five seasons. Apart from Madison Bumgarner's stunning performance, I enjoyed the fact that two of the Wild Card teams ended up playing in the World Series. The Giants scored a total of 30 runs (versus the Royals' 27) in the series, of which only two were home runs.

So what does this have to do with dividend growth investing? Well, on Tuesday, I scored my first home run with DivGro when General Dynamics Corporation (GD) crossed the 100% profit mark!

Recent Buy: T

Oct 23, 2014: Bought 75 shares of T at $33.64 per share.

Incorporated on October 5, 1983 and based in Dallas, Texas, AT&T Inc. (T) is a holding company providing telecommunication services in the United States and worldwide. Services include wireless communications, local exchanges, long-distance services, data/broadband and internet services and many other services. In March 2014, the company completed the acquisition of prepaid wireless provider Leap Wireless International Inc.

T is a Dividend Champion with an impressive 30-yr streak of dividend increases. It pays quarterly dividends in February, May, August and November. Initial yield on cost is 5.47%.

Recent Buy: AVA

Oct 22, 2014: Bought 75 shares of AVA at $34.12 per share.

Incorporated in 1889 and headquartered in Spokane, Washington, Avista Corporation (AVA) is a diversified energy company engaged in the generation, transmission and distribution of energy in North America. Avista Utilities is an operating division of AVA that comprises of its regulated utility operations. It serves customers in Washington, Idaho and Oregon and contributes over 90% of earnings. In July 2014, AVA acquired Alaska Energy and Resources Company.

AVA is a Dividend Contender with a 12-yr streak of dividend increases. It pays quarterly dividends in March, June, September and December. Initial yield on cost is 3.72%. For a company in the Utilities sector, AVA has a solid 5-year dividend growth rate of 12.07%.

The Bloggers' Dividend Growth Portfolio

Includes: AFL • APD • AVA • BAX • BBL • BMS • CAT • CLX • COP • CSX • CVX • DE • DLR • EMR • GIX • HCP • HRS • IBM • ITW • JNJ • KMB
• KMP • KO • LEG • LMT • LO • MAT • MCD • MDT • MO • MSFT • NSC • O • OHI • PEP • PG • PM • PSEC • QCOM • RTN • SO • T • TGT • V
• VZ • WAG • WM • WMT • XOM • YUM 

Today, Seeking Alpha published my first premium article! Here is an excerpt of the introduction:

A while ago, I expanded DivGro's blogroll to include nearly 100 blogs. There is a special section highlighting active blogs that are at least one year old. I provide short descriptions to tell readers what each blog is about. Additionally, I include links to the public portfolios of blogs in my blogroll. These links are marked with a ¶. 

With a little work it is possible to get an interesting, composite view of dividend growth investing from public DGI portfolios. Earlier this year, I used 20 different portfolios to create a list of popular dividend growth stocks. On that occasion, the four most popular dividend growth stocks were McDonald's (NYSE:MCD), Chevron (NYSE:CVX), Johnson & Johnson (NYSE:JNJ) and Coca-Cola (NYSE:KO). 

The purpose of this article is to repeat the exercise, but this time with the much more comprehensive list of blogs in my blogroll.

Please head on over to Seeking Alpha to read The Bloggers' Dividend Growth Portfolio: Popular Dividend Growth Stocks Trading On U.S. Exchanges.

Dividend Increases, October 1-15, 2014

Only two of my watch list stocks (and none of my DivGro holdings) announced dividend increases in the first 15 days of October, so this post will be short and sweet!

I monitor dividend increase announcements to make Yield on Cost (YoC) adjustments and to update DivGro's projected annual dividend income. Even for stocks I don't own, dividend increases are interesting as they prompt added scrutiny of those stocks. Companies that regularly increase dividends show confidence in their ability to pay those increasing dividends.

Performance Page Updated

Earlier this year, I redesigned my Performance page and included a set of radial charts, which are reminiscent of a logo my dad designed many years ago. The logo has a circular core, with radial arms pointing out in different directions. It is still being used today!

Likewise, the radial charts on my Performance page have radial bars representing a data value for each of DivGro's holdings. The holdings are ordered clockwise by purchase date and start with my first buy, CVX, at the 12 o'clock position. I buy stocks for DivGro in chunks of about $2,500 at a time, except for master limited partnerships (MLPs), which I double-up on. Eventually, my goal is to have a weight-balanced portfolio.

Recent Buy: SDRL

Oct 6, 2014: Bought 100 shares of SDRL at $25.00 per share.

Established in 2005 as a Bermuda-based company, Seadrill Limited (SDRL) is an offshore deepwater drilling contractor providing worldwide services to the oil and gas industry. The company operates an extensive fleet comprising of drill ships, jack-up rigs, semi-submersible rigs and tender rigs for operations in shallow to ultra-deepwater areas and harsh and benign environments.

In April this year, I bought 72 shares of SDRL at $34.91 per share, so with this buy I'm averaging down to a per share price of $29.15. Yield on Cost (YoC) for this buy is 16%. As I remarked when I bought SDRL in April, the stock is one of my riskier buys, given its relatively short dividend history and erratic earnings history.

Quarterly Review, Q3-2014

I started DivGro in January 2013, so the 7^th quarter of DivGro is over. I'd like to report on DivGro's performance and progress made towards meeting my 2014 goals.

Before doing so, just a few words on happenings over the past three months. In July, we travelled to South Africa to visit with family and friends and to hike the Otter Trail. We also visited two national parks, Addo Elephant National Park and Kruger National Park. It was a wonderful trip and good to take break from our usual activities. In August, I created an expanded Blogroll page in which I'm highlighting blogs that include public portfolios. And, in September,  I increased DivGro's exposure by posting some articles on Seeking Alpha. The increased exposure created more traffic to this site and page views have since crossed the 100,000 mark.

10 Dividend Growth Stocks for October, 2014

David Fish's CCC list is updated every month and contains all U.S.-listed stocks that have raised their dividends for at least five consecutive years. The accompanying spreadsheet provides key statistics of the CCC stocks and is a great resource for dividend growth investors. Every month, I search the CCC list for stocks trading at a discount to fair value. Since the list contains more than 500 stocks, I use a series of filters to reduce the number of stocks to consider.

This year, one of my goals is to balance DivGro's holdings across all 10 sectors in my watch list. In my view, sector-balanced does not mean an equal number of holdings in each sector. I prefer to target the sector distribution of my watch list. Since there are more candidates in the Energy and Financials sectors, for example, I want more holdings in those sectors than holdings in the Materials and Telecommunication Services sectors, with fewer candidates. Note that I have a dynamic watch list, which means that the ideal sector distribution changes from month-to-month.

Monthly Review, September 2014

September was an interesting month as I increased DivGro's exposure by posting articles on Seeking Alpha. The increased exposure created more traffic to this site and, consequently, total page views have crossed the 100,000 mark. On average, DivGro is now getting about 500 page views per day. Unfortunately, my application for associate membership of The DIV-Net is stuck somewhere in the ether, which is a bad start to what I had hoped would be a mutually beneficial relationship. Oh well...

In September, I added MCD to DivGro, but parted ways with CHL and SNP after both companies cut their dividends. Consequently, DivGro now has 33 different holdings. With plenty of cash on hand, I'm in a good position to reach my goal of 36 holdings by year's end. At the same time, I'm quite pleased with my diversification efforts this year. DivGro has multiple holdings in most of the 10 sectors in my watch list. I'm still overweight in Energy and underweight in Consumer Discretionary and Industrials.

Dividend Increases, September 16-30, 2014

Twice a month, I report on dividend increase announcements for stocks in my watch list, a subset of David Fish's CCC stocks (Champions, Contenders, and Challengers) and a few non-CCC holdings in DivGro. I find this to be a useful way to identify dividend growth candidates, because companies that increase their dividends regularly show confidence in future earnings growth.

Another reason for monitoring dividend increases is to track the yield on cost (YoC) of stocks I own. When dividends are increased, I make YoC adjustments and update DivGro's projected annual dividend income. 

This month, three of DivGro's holdings announced dividend increases. MSFT increased its quarterly dividend by 3¢ per share, or nearly 11%. MCD announced a more modest increase of 4.94%, while PMT is increasing its dividend by 3.39%.

Recent Sell: SNP

Sep 26, 2014: Sold 31 shares of SNP at $90.21 per share.

On Wednesday I sold my CHL shares and today I'm following that up by selling all my shares of China Petroleum & Chemical Corp (SNP). In this post, I'll explain why I'm parting ways with SNP, though the main reason for selling is the same as in the case of CHL!

As a dividend growth investor, I like to maintain and grow dividend income over time. If a stock I hold in DivGro gets a dividend cut, I'm no longer interested in keeping it. Instead, I'll sell my shares and look for a substitute. As I mentioned yesterday, I dislike selling DivGro holdings, but I dislike dividend cuts even more!

Recent Sell: CHL

Sep 24, 2014: Sold 47 shares of CHL at $61.40 per share.

Yesterday I sold all my shares of China Mobile Ltd. (CHL), a provider of mobile telecommunications services in China and Hong Kong. This is only the second time that I've sold shares since starting DivGro in January 2013. The purpose of this post is to explain why I decided to part ways with CHL.

I list several rejection criteria to consider when evaluating a stock for removal from DivGro. Some relate to stock performance and extraordinary events, such as mergers. Another relates to the dividend payment and, specifically, whether it is suspended, cut, or frozen. In the case of CHL, my reason for selling is due to CHL's recent dividend cut.

Recent Buy: MCD

Sep 22, 2014: Bought 27 shares of MCD at $93.97 per share.

Founded in 1955 by Ray Kroc and incorporated in December 1964, McDonald's Corp. (MCD) is the world's leading global foodservice retailer with over 35,000 locations in more than 100 countries. Operating primarily as a franchisor, MCD owns the land and building or secures long-term leases for both franchised and company-operated restaurant sites. More than 80% of McDonald's restaurants are owned and operated by independent business men and women. About 57% are conventional franchisees and 24% are licensed to foreign affiliates or developmental licensees.

MCD is a Dividend Champion with an impressive streak of 39 years of dividend increases. It pays quarterly dividends in March, June, September and December. The newly announced dividend of 85¢ per share makes my starting yield on cost 3.62%. With two consecutive dividend increases of only about 5%, MCD's 5-year dividend growth rate is now 9.86%.

Why I'm not selling INTC. Yet.

Intel Corp (INTC) recently declared its next quarterly dividend. I'm one of the shareholders that were holding out for the chip maker's long-awaited dividend boost. There has been no raise in 10 quarters, yet INTC could still salvage its status as a Dividend Contender. A just-in-time increase would have kept the company's streak of consecutive years of dividend increases alive.

Unfortunately, the board of directors decided to pay out 22.5¢ per share, again! That's eleven quarters without a dividend raise. Effectively, as far as dividend growth investors are concerned, INTC froze its dividend:

Dividend Increases, September 1-15, 2014

I'm pleased when stocks in my watch list of dividend growth stocks announce dividend increases, even if I don't own the stocks in question. It reaffirms that those stocks belong in my watch list. Also, it prompts me to take a good look at them. Companies that regularly increase dividends, show confidence in their ability to pay those increasing dividends.

Another reason for monitoring dividend increase announcements is to see if stocks I own will be changing their dividend payments. If so, I make Yield on Cost (YoC) adjustments and update DivGro's projected annual dividend income. This month, one of DivGro's holdings, Philip Morris International Inc (PM), announced a dividend increase of 6.38%.

My Dynamic Watch List

I maintain a watch list of dividend growth stocks that I update at least once a month, sometimes more frequently. It contains all of DivGro's holdings, as well as a subset of David Fish's CCC stocks. Currently, there are 183 stocks in the watch list. The watch list is organized by sector using GICS sector names.

I reference the watch list every month when compiling a dashboard of the best dividend growth stocks. September's dashboard has HP, XOM, and PMT in the top spots. I use the dashboard to compile a list of candidates, one per sector, for further research. Until DivGro is nicely diversified by sector, I'll continue to bias my purchases to sectors that are under-represented.

Stock Analysis: MAT

Founded in 1945 and headquartered in El Segundo, CA., Mattel Inc. (MAT) is the world's largest manufacturer of toys and games. The company makes toys under the brands Mattel, American Girl, Barbie, Batman, Dora the Explorer, Fisher Price, Hot Wheels, Matchbox, Sesame Street, View-Master, Winnie the Pooh, Yu-Gi-Oh, and many more. The company sells directly to retailers and wholesalers, and through agents and distributors in countries where it has no direct presence.

MAT is a Dividend Challenger with 5 consecutive years of dividend increases. The company's 5-year compound annual growth rate (CAGR) is 13.9%. It pays quarterly dividends of $0.38 per share in the months of March, June, September, and December. At the current price of $35.10, MAT yields an impressive 4.33%.

10 Dividend Growth Stocks for September, 2014

Every month, I use David Fish's CCC list to search for stocks trading at a discount to fair value. The CCC list is updated monthly and contains all U.S.-listed stocks that have raised their dividends for at least five consecutive years. The accompanying spreadsheet provides key statistics of all the CCC stocks and is a wonderful resource for dividend growth investors.

This month's list contains 553 stocks. I use a series of filters to reduce the number of stocks to about 200 candidates, which, along with DivGro's holdings, form my watch list. Until DivGro is nicely diversified, I'll continue to search for the best available candidates by sector and bias my purchases to sectors that are under-represented. 

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.

Dividend Increases, July 16-31, 2014

On the last day of July, the markets took a significant nosedive. The Dow shed more than 300 points and the S&P 500 tumbled nearly 2%. Argentina's second default in 12 years is being blamed, along with fears that yesterday's strong GDP numbers could move the Fed to start raising interest rates.

As dividend growth investors, days like today shouldn't bother us too much. Dividends are not affected by stock market volatility. In fact, lower prices mean greater opportunities to pick up bargains!

Taking a Break

No, I'm not taking a break from DivGro. The title of this post is an encouragement to take a break; to enjoy life; to smell the roses...

We've just returned from a wonderful vacation in South Africa, where I hiked the Otter Trail with two of my sons. It was an amazing experience, despite some difficulty we experienced crossing the Bloukrans river. I took the photo to the left on the morning of the last day of our hike.

After our hike, one of my sons bungy-jumped off the Bloukrans bridge, the world's highest commercial bungy jumping site! We also had day visits to two national parks, Addo Elephant National Park and Kruger National Park. At Kruger, we were fortunate to see Africa's Big Five game animals in a single day, which is quite rare!

Dividend Increases, July 1-15, 2014

Twice monthly I report on dividend increases announced for stocks in my watch list, to see if any dividend increases have been announced for DivGro stocks. If so, I make yield on cost (YoC) and projected annual dividend income adjustments. Recently, one of the stocks I own (COP) announced a 5.8% dividend increase.

Another reason to monitor dividend increase announcements it 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 research them.

Recent Buy: IBM

Jul 11, 2014: Bought 14 shares of IBM at $187.91 per share.

Incorporated in 1911 and headquartered in Armonk, New York, International Business Machines (IBM) is an information technology company engaged in the development and manufacturing of advanced computer systems, software, storage systems and microelectronics.

IBM is a Dividend Contender with a streak of 19 years of dividend increases. It pays quarterly dividends in March, June, September and December. The current dividend is $1.10 per share, so starting yield on cost is 2.34%. IBM's 5-year dividend growth rate is a solid 14.26%.

Midway Review of 2014 Goals

With 2014 halfway over, I want to review the goals I've set for 2014 and where I stand. Doing so not only helps to monitor progress, but allows me to make strategic adjustments if necessary.

I've set some challenging yet attainable goals for 2014. Of the four goals, three are easily measurable and my progress at the midway point can be expressed in percentage terms. As for the fourth goal, I've made good enough progress to give myself a passing grade. 

10 Dividend Growth Stocks for July, 2014

Each month, 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. My purchases since January have diversified DivGro to at least 2 holdings per sector, except for Materials, in which I have a single holding. I'll continue to bias purchases with the goal to improve DivGro's diversification, but only if I can identify candidates with good dividend yields and strong dividend growth rates trading at a discount to fair value.

Quarterly Review, Q2-2014

Its been a busy quarter! We bought a new house and moved in; we're turning our previous home into a rental property; and we traveled to South Africa to visit our families and to hike the Otter Trail.

I'm really looking forward to hiking the Otter Trail again. We did it in 2001 with our oldest son, who couldn't make it this time around. But I'm taking his two brothers, along with some of their cousins and uncles.

Before tackling the Otter Trail, I'd like to report on the second quarter performance of DivGro. This quarter, I contributed capital funds in the amount of $7,500 to DivGro. Dividend income in Q2 totaled $892, up significantly from $581 received in Q1-2014. I added four dividend growth stocks, DLR, SDRL, PMT and WMT. Projected annual dividend income increased from $3,508 to $4,390, an increase of 25.14%.

Monthly Review, June 2014

I'm in South Africa, preparing for another adventurous hike. A year ago, I mentioned our high adventure hike in New Mexico, a 65 miler over 11 days. This time around, we're hiking about 27 miles over 5 days, starting July 3. I'll report on our adventure later this month.

Before we hike, I'd like to report on the month of June. I added one new stock, WMT, and set a new record for monthly dividend income of $395! Compared with $109 earned in June 2013, this months income represents an increase of 262%! Also, DivGro crossed the 6-figure mark this month!

Dividend Increases, June 15-30, 2014

The first half of 2014 is behind us! Before I post my next monthly and quarterly reports, I'd like to report on dividend increases announced for stocks in my watch list.

This information helps me track the yield on cost (YoC) of stocks I own, as I need to make YoC adjustments when dividends increases (or decreases) are announced. I also use the information to properly track DivGro's projected annual dividend income.

Tracking your DGI Portfolio

Last month, All About Interest posted a nice article about using Google Docs for your portfolio. In his article he describes several ways to import data into a Google Docs spreadsheet. The easiest and most convenient way is to use the GoogleFinance function, which fetches current and historical stock information from Google Finance.

The purpose of this post is to explain the content of the above-mentioned article for readers that are not so technically inclined. I'm not presenting anything new here, except for a sample spreadsheet containing the necessary formulas.

Dividend Increases, June 1-15, 2014

Twice a month I report the dividend increases announced for stocks in my watch list. I compile this information to see if any dividend increases have been announced for DivGro stocks. If so, I make yield on cost (YoC) and projected annual dividend income adjustments. Last week, two of the stocks I own (TGT and CAT) announced substantial dividend increases!

Another reason to monitor dividend increase announcements it to identify new candidates for purchase. When companies announce dividend increases, they show confidence in being able to pay those increased dividends. Significant increases pique my interest – I usually take some time to research the company or companies that make such aggressive moves.

Recent Buy: WMT

Jun 13, 2014: Bought 34 shares of WMT at $75.42 per share.

Wal-Mart Stores, Inc. (WMT) is the world's largest retailer. Based in Bentonville, Arkansas and founded in 1945, WMT is a multinational retailer consisting of more than 11,300 stores under 71 banners in 27 countries. It is the biggest private employer in the world with over two million employees.

WMT is a Dividend Champion with an impressive streak of 41 years of dividend increases. It pays quarterly dividends in January, April, July and October. The current dividend is 48¢ per share, so starting yield on cost is 2.55%. WMT's 5-year dividend growth rate is a solid 14.15%.

A glimpse of six figures...

This morning when I checked my account balance, it had crossed the six figure mark for the briefest of time! Six figures! After having started DivGro about 18 months ago, this is certainly a great milestone to reach.

In the 18 months of managing DivGro, my deposits totaled $84,000. DivGro has earned near $2,500 in dividend income, so my capital gains are approaching $13,500. I'm quite pleased with DivGro's performance and I'm on track to meeting my goals for 2014.

10 Dividend Growth Stocks for June, 2014

This year, I've shifted focus to balance my portfolio holdings across all 10 sectors in my watch list. Rather than search for the best available candidates, I search for the best available candidates by sector. DivGro has at least 2 holdings per sector, except for Materials, in which I have a single holding. I'll continue to bias purchases with the goal to improve DivGro's diversification, 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: May 2014

In the month of May I added only one new stock to DivGro. The good news is that I had another good month as far as dividend income is concerned: I earned $330, compared with $126 earned in May 2013, an increase of 162%!

Dividend Increases, May 17-31, 2014

Time again to report on dividend increases announced for stocks in my watch list. I compile this information to see if any of my DivGro stocks have raised their dividends so I can make yield on cost (YoC) adjustments and properly track DivGro's projected annual dividend income. Another reason is to review dividend increases for stocks I don't own.

Diversify!

One of my goals for 2014 is to increase the number of holdings in DivGro to 36 and to balance those holdings across all 10 sectors in my watch list. I reconstructed my watch list, following a similar approach to the one I use every month to identify 10 candidate stocks. In doing so, I arrived at a new target distribution for stocks by sector. This process of diversifying DivGro is going quite well.

Diversification is a way to reduce risk by adding variety to a portfolio. Assuming individual stocks are not perfectly correlated, the positive returns of some stocks should offset the negative returns of others. According to Investopedia, studies have shown that "maintaining a well-diversified portfolio of 25 to 30 stocks will yield the most cost-effective level of risk reduction". Increasing the number of holdings beyond 25 to 30 stocks will reduce risk further, but at a diminishing rate.

Dividend Increases, May 1-16, 2014

Every two weeks I report on dividend increases announced for stocks in my watch list, mainly to see if any of my DivGro stocks have raised their dividends. When that happens, I make yield on cost (YoC) adjustments and recalculate DivGro's projected annual dividend income. Another reason is to review dividend increases for stocks I don't own to see if some likely candidates present themselves.

Recent Buy: PMT

May 9, 2014: Bought 120 shares of PMT at $20.94 per share.

Founded in 2009 and based in Moorpark, California, PennyMac Mortgage Investment Trust (PMT) is a specialty finance company that invests primarily in residential mortgage loans and mortgage-related assets. Operating as a real estate investment trust (REIT), the company is not subject to federal corporate income taxes if it distributes at least 90% of its taxable income to shareholders.

PMT is a Dividend Challenger with a 5-year streak of dividend increases. It pays quarterly dividends in January, April, July and October. The current dividend is 59¢ per share, so starting yield on cost is an impressive 11.27%.

10 Dividend Growth Stocks for May, 2014

This year, in an effort to balance my portfolio holdings across all 10 sectors in my watch list, I've changed the way I look for candidates. Rather than search for the best available candidates, I search for the best available candidates by sector. My purchases since January have diversified DivGro to at least 2 holdings per sector, except for Materials, in which I have a single holding. I'll continue to bias purchases with the goal to diversify DivGro, 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: April 2014

In April, I added 2 new stocks to DivGro and compiled a new watch list. The additions pushed DivGro's projected annual dividend income above $4,000! This means I'll be earning $4,000 every year in perpetuity, assuming I keep DivGro as is and dividends are not reduced.

According to Wikipedia, a perpetuity is an annuity that has no end, or a stream of cash payments that continues forever. That is exactly what DivGro is for me – a perpetuity.

Of course, I intend to continue adding stocks to DivGro, which will increase the stream of cash payments. Also, since DivGro is a portfolio of dividend growth stocks, I'm expecting the stream of cash payments to increase even if I did not add more stocks to DivGro.

Dividend Increases, April 16-30, 2014

Last month, several stocks in my watch list announced dividend increases. I own shares in no fewer than 6 of these stocks! While ETP's increase is quite small at 1.63%, the other increases vary between 4.76% (APU) and 10% (TRV). Any dividend increase above 7% is great in my mind, as that certainly beats inflation and, therefore, represents real growth.

The reason I compile this information is to monitor dividend increases for stocks I own in DivGro so I can make yield on cost (YoC) adjustments and properly track DivGro's projected annual dividend income. Another reason is to review dividend increases for stocks in my watch list that I don't own, to see if any interesting candidates present themselves.

Recent Buy: SDRL

Apr 25, 2014: Bought 72 shares of SDRL at $34.91 per share.

Established in 2005 as a Bermuda-based company, Seadrill Limited (SDRL) is an offshore deepwater drilling contractor providing worldwide services to the oil and gas industry. The company operates an extensive fleet comprising of drill ships, jack-up rigs, semi-submersible rigs and tender rigs for operations in shallow to ultra-deepwater areas and harsh and benign environments.

SDRL is a Dividend Challenger with a 5-year streak of dividend increases. It pays quarterly dividends in March, June, September, and December. Starting Yield on Cost (YoC) is an impressive 11.23%.

Recent Buy: DLR

Apr 25, 2014: Bought 48 shares of DLR at $52.73 per share.

Digital Realty (DLR) is one of the 20 largest publicly-traded U.S. Real Estate Investment Trusts (REITs) with an equity market capitalization of approximately $7 billion. The company, through its controlling interest in Digital Realty Trust, L.P. and subsidiaries of the Operating Partnership, owns, acquires, repositions and manages technology-related real estate.

DLR is a Dividend Contender with a 10-year streak of dividend increases. It pays quarterly dividends in March, June, September and December. The current dividend is 83¢ per share, so starting yield on cost is 6.30%.

My New Watch List of Dividend Growth Stocks

Of all the pages on my blog, I tinker with my Watch List page most. The list contains tickers of candidate dividend growth stocks, organized by sector. It is a subset of Dave Fish's CCC stocks (Dividend Champions, Contenders, and Challengers), plus a small selection of non-CCC dividend paying stocks.

My goal with this post is to reconstruct my watch list by using a similar approach to the one I use every month to identify 10 candidate stocks. Additionally, I want to figure out what sector-balanced really means. I don't think it means having the same number of stocks in each sector.

Dividend Increases, April 1-15, 2014

Twice a month, I compile a table recent dividend increases for stocks in my watch list. I like to keep track of dividend increases for stocks I own in DivGro so I can make Yield on Cost (YoC) adjustments. For other stocks in my watch list, dividend increases can be a trigger for looking more carefully at particular candidates.

Quarterly Review, Q1-2014

I've been rather busy this month doing various things, including the not-so-pleasant task of doing our taxes. I'm happy to be back to report on the first quarter performance of DivGro.

This quarter, I contributed capital funds in the amount of $12,500 to DivGro, including one bonus deposit of $5,000. Dividend income in Q1 totaled $580.67, down slightly from $586.74 received in Q4-2013. This is the first decrease in quarterly dividends for DivGro. I'm not concerned about that, as there is no fundamental change that caused the decrease. Some stocks (CHL, NTT, SNP) pay dividends semi-annually rather than quarterly, so total quarterly dividends wouldn't necessary increase every quarter.

I added four dividend growth stocks and removed one dividend growth stock in Q1-2014. Projected annual dividend income increased from $2,864.94 to $3,508.43, an increase of 22.45%.

10 Dividend Growth Stocks for April, 2014

This year, I've shifted focus to balancing my portfolio holdings across all 10 sectors in my watch list. My purchases in the first quarter have improved DivGro's diversification and, except for the Materials sector, I now have at least 2 holdings in each sector. I'll continue to bias purchases with the goal to improve DivGro's diversification, 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: March 2014

March was another busy month for DivGro, with two buys and a sell (my first since starting DivGro in January 2013). Also, I reported on recent milestones, including 100+ posts and 40k page views. More importantly, though, March was an incredible month as far as dividend income is concerned – I earned $359 in dividend income!