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Sunday, January 18, 2015

Annual Review, 2014

I created DivGro in January 2013 to generate a reliable and growing dividend income stream. The act of keeping track of DivGro in a public forum has helped me become a better dividend growth investor. A lot of what I've learned has come from research, but the most interesting aspect of blogging certainly is the interaction with like-minded investors. So, I want to say Thank You! to all who have encouraged me and have commented on my posts. Please continue to do so!

In the past two weeks, I've written a monthly review and a quarterly review. In this post I'll be reviewing DivGro's performance in 2014 – my second annual review.  I'd like to do this by looking at the portfolio's overall performance as measured by rate of return, dividend income, dividend growth, and yield on cost (YoC). Also, I'd like to look at the performance of stocks I've owned for at least one year. Finally, I'll list some of DivGro's 2014 highlights.


Below is a spreadsheet showing the state of DivGro on December 31, 2014. I've updated my portfolio spreadsheet by adding several additional columns, including ones showing Total Return and Annualized Profit/Loss.
Because I started adding to existing holdings in 2014 and plan to continue to do so this year, I want to present data associated with each purchase (such as number of shares and purchase date), yet have totals for the rest of the information.

Like last year, General Dynamics Corporation (GD) is leading the pack with an annualized total profit of 60%. Runners-up are Altria Group, Inc (MO) with 48%, Digital Reality Trust (DLR) with 42% and Intel Corporation (INTC) with 40%. Seadrill Limited (SDRL) is by far the worst performer, followed by Helmerich & Payne Inc (HP).

Overall, DivGro has an average YoC of 4.60%, while dividends received total 4.98% of invested capital. Average annualized profit is 21.85%.

Rate of Return

In 2014 I invested $36,850, down significantly from the $66,500 invested in 2013.  The ending market value of $118,213 represents a simple return of 14.38% on the total investment amount of $103,350. Of course, the simple return does not take into account the timing and size of cash deposits. Following is a graph showing DivGro's overall return since inception, produced by FolioInvesting where I have my DivGro account. DivGro's performance is compared with the S&P 500's total return. At 34.06%, DivGro gains trail the S&P 500's of 50.51%:
Focusing on 2014, DivGro's performance lagged behind the S&P 500 again, especially in the latter part of the year. With DivGro being overweight in energy stocks, that's not too surprising:
Interestingly, DivGro outperformed the S&P 500 deep into July 2014.

Dividend Income 

The main goal of DivGro is to generate a reliable and growing dividend income stream. In 2014, DivGro generated a total of $3,945 in dividend income (ending at an all-time total of $5,292). Projected annual dividend income increased to $4,886, so I can expect to earn monthly dividend income averaging at least $407 in 2015:
Dividend Growth

An important aspect of my main goal with DivGro is dividend growth. I use selection criteria that favor stocks with a history of paying increasing dividends every year. In 2014, no fewer than 25 of DivGro's holdings announced dividend increases:

Dividend Growth Company Ticker Increase
High (above 8%) Target Corporation
Caterpillar Inc
General Dynamics Corporation
Microsoft Corporation
The Travelers Companies Inc
Exxon Mobil Corporation
Altria Group Inc
43¢ to 52¢
60¢ to 70¢
56¢ to 62¢
28¢ to 31¢
50¢ to 55¢
63¢ to 69¢
48¢ to 52¢
Medium (4 – 8%) Energy Transfer Partners LP
Walgreens Boots Alliance Inc
Chevron Corporation
Northeast Utilities Systems
Intel Corporation
Philip Morris International Inc
Baxter International Inc
Johnson & Johnson
AFLAC Incorporated
BHP Billiton plc
AmeriGas Partners LP
PartnerRe Ltd
90.5¢ to 97.5¢
31.5¢ to 33.75¢
100¢ to 107¢
36.75¢ to 39.25¢
22.5¢ to 24¢
94¢ to 100¢
49¢ to 52¢
66¢ to 70¢
69¢ to 73¢
37¢ to 39¢
118¢ to 124¢
84¢ to 88¢
64¢ to 67¢
Low (below 4%) PennyMac Mortgage Investment Trust
ACE Limited
AT&T Inc
Vanguard Natural Resources LLC
Nippon Telegraph & Telephone Corp
59¢ to 61¢
63¢ to 65¢
46¢ to 47¢
20.75¢ to 21¢
39.75¢ to 40.29¢

Yield on Cost

Another way to look at dividend growth is to see its effect on YoC. DivGro's average initial YoC is 4.96%, whereas the average YoC is 4.60%. YoC is lower because of SDRL's dividend suspension.

For 2013, I reported an average YoC of 4.42%. So, YoC went up to 4.60% in the past year, despite SDRL's dividend suspension. DivGro's average YoC should continue to increase over time, as companies increase their dividends.

Longterm Holdings

I'd like to briefly discuss the performance of DivGro holdings that are at least one year old. There are 21 stocks in DivGro that are at least one year old.

The following graph shows the YoC of these longterm holdings. PennantPark Investment Corp (PNNT) is a business development company that froze its dividend just after I purchased my shares. I decided to hold onto PNNT for its impressive yield. The other outliers, Vanguard Natural Resources LLC (VNR) and Energy Transfer Partners LP (ETP) are master limited partnerships (MLPs), which are known for paying large distributions. In fourth place is Textainer Group Holdings Limited (TGH), which, unfortunately, did not raise its dividend in 2014.

Here's a graph showing 2014 dividend increases. Target Corporation (TGT) and Caterpillar Inc (CAT) lead the pack. I prefer to see increases of at least 6%, so I'm happy that 12 of these longterm holdings raised by more than 6%. As mentioned earlier, neither PNNT nor TGH raised their dividend last year.

Next up is payback percentage, which represents the proportion of the original investment that has been returned in the form of dividends. One would expect that stocks with large yields would excel here and, indeed ETP, PNNT, and VNR dominate. Note that stocks I purchased first have an advantage over more recent buys.

The following graph plots annualized total returns (capital gains/loss plus dividend income) for my longterm holdings. As mentioned earlier, GD, is the clear forerunner. I'm very happy with annualized total returns that exceed 18%. Of course, I'll need to keep an eye on BHP Billiton plc (BBL), VNR and PNNT. Perhaps there are opportunities to buy more shares at a significant discount!

Finally, the impact of capital gains or losses will, over time, change the relative weight of longterm holdings, as illustrated in the next graph. Recall that I prefer to buy stocks in chunks of $2,500 at a time, except in the case of MLPs (for example, ETP) where I double up. PNNT is performing poorly, despite its high yield – perhaps another cautionary tale!

2014 Highlights

In 2014, my wife and I were blessed to go on our first cruise, a seven-day Caribbean cruise on the Norwegian Epic. Then, in July, we took another break and travelled to South Africa to hike the Otter Trial. These were certainly my personal highlights of 2014. 

As for DivGro highlights, in 2014 DivGro's value crossed the $100k mark for the first time and my total dividend income surpassed $5,000. Projected annual dividend income is nearing the $5,000 mark as well. And, I've achieved all my 2014 goals!

Page Views

At the start of 2014, DivGro had less than 20,000 page views (pv's) – a mark I crossed on 10 January. Throughout the year, the average number of daily pv's steadily climbed. And on 28 December 2014, DivGro crossed the 150,000 page view mark:

 10 January 2014
 average since inception: 55 pv's 
 4 September 2014
 average since inception: 150 pv's  
 25 February 2014
 average since inception: 73 pv's  
 24 September 2014
 average since inception: 161 pv's 
 28 March 2014
 average since inception: 90 pv's 
 14 October 2014
 average since inception: 171 pv's 
 1 May 2014
 average since inception: 105 pv's 
 2 November 2014
 average since inception: 182 pv's 
 5 June 2014
 average since inception: 117 pv's 
 21 November 2014
 average since inception: 191 pv's  
 10 July 2014
 average since inception: 128 pv's 
 9 December 2014
 average since inception: 201 pv's  
 9 August 2014
 average since inception: 139 pv's 
 28 December 2014
 average since inception: 209 pv's 

Currently, DivGro averages about 550 pv's per day. That's nearly 11,000 pv's per month! I'm happy that my blog is generating this level of interest. I've certainly learned a lot by reading the blogs of fellow dividend growth investors. Hopefully, I'm returning the favor...

Popular Posts

In 2014, I wrote 100 posts, which included 3 premium articles for Seeking Alpha.

In January, I kicked off a new monthly series called 10 Dividend Growth Stocks. The first of these articles, 10 Dividend Growth Stocks for January, 2014 (762 pv's), introduced the goal of diversifying DivGro by sectors, as well as the first list of sector winners for the year.

On 24 February I posted my most popular post so far, Popular Dividend Growth Stocks, which received 2,552 pv's to date. In this post, I reviewed the public portfolios of 20 dividend growth bloggers and compiled a list of stocks that appeared the most in these portfolios. Shortly thereafter, I posted More Popular Dividend Growth Stocks (894 pv's), which revealed the runners-up in popularity.

My second most popular post is Tracking your DGI Portfolio, which received 1,991 pv's to date. The post explains how to use Google Sheets to create spreadsheets for your portfolio, including ways to import current and historical stock information from websites like Yahoo! Finance and Google Finance. I hope to write an update of this post soon – the comments included lots of great suggestions that need to be shared!

In September, I joined Seeking Alpha and immediately noticed an increase in readership. September's 10 Dividend Growth Stocks post generated 1,086 pv's at DivGro and 4,232 pv's as a repost at Seeking Alpha.

Many other DivGro posts have been published (reposted) on Seeking Alpha. These had the most pv's:

My Seeking Alpha premium articles have been moderately successful, so one of my goals for 2015 is to write at least two premium articles per month. Here are links to the one's published in 2014:

Finally, following is a short list of my personal favorites of 2014:

2015 Outlook

I've set some really challenging goals for 2015. I want to increase projected annual dividend income to $7,500 and attempt to earn $6,000 in dividend income by 31 December 2015. To do so, I'll need to find ways to boost my regular monthly deposits of $2,500 through bonus deposits. Look for a post about the first of these soon.

My plan is to slowly increase the number of DivGro holdings to about 42. This means that I'll continue to add shares to existing holdings, especially for stocks that are trading at fair value. Also, I'll continue to bias purchases towards sectors that are underweight, where possible.

A special word of thanks to all my readers, especially to those that comment regularly and continue to encourage me. Please comment below and let me know how I could improve DivGro. Also, if there are specific topics that you would like me to cover, let me know that as well!

Thanks for reading! 


  1. Heck of a 2014 for both the portfolio and the blog. You've developed an impressive portfolio with great growth potential, and I was surprised to see the overall growth rate outmatch the double whammy of the SDRL dividend suspension.

    If you're able consistently write and build a following on Seeking Alpha that follows you over here, you're going to see an even faster rise in pageviews and further success here on the blog. I know I'll be looking to follow along and wish you nothing but this best in this coming year.

    1. Thanks, w2r! I agree 2014 was a great year -- despite the SDRL fiasco!

      The Seeking Alpha membership has certainly been beneficial, though I want to be careful not to neglect my own blog! I'm also a member of DIV-Net and I'd like to become more active there, this year.

      Likewise, I wish you all the best for 2015 -- thanks for visiting so regularly!


  2. Wow is that an impressive set of data! Is that all done mostly in excel? Love to see that spreadsheet goodness.

    1. Thanks, Anonymous -- my portfolio spreadsheet is done with Google Sheets. I wanted a particular look for the charts, so for those I used Excel.

  3. I love how in depth everything is. Great 2014 review!

    1. Thanks, DividendForDummies -- it took a while to get the 2014 review out, but its finally out there!

      Take care!

  4. Wow...thats some exhaustive amount of data. Looks like you had a great year in 2014 and are well set for another successful year. Congrats and best wishes


    1. Yeah -- and it was exhausting to write :-) Thanks for your regular comments and encouragement. I'm looking forward to seeing where DivGro will go in 2015. Also, I'll be following your journey at R2R with interest! Best of luck!


  5. Keep up the amazing work and thank you for sharing your investment strategies. I agree with you, having a blog is a huge motivation to succeed. I started my blog a month ago and even though visits are light, it does not matter. I find that just visiting and updating my blog daily, keeps me in the right mindset to succeed.

    Best of investing luck in 2015!

    1. Thanks for your kind words, Dividend Dreams! Congratulations on taking the big step to start a blog -- I think you'll find that if you keep it up, it will change your financial destiny! As you say, just the act of keeping busy with your blog keeps the mindset right. Don't be too concerned about page views. Focus on building great content (and continue to comment on other blogs :-)) and you'll increase traffic in no time! Most important, keep at it and don't give up! Good luck!

  6. I love all of the data you posted. I have similar charts in an excel sheet, but the time it would take to put everything together is holding me back from going so in depth. I applaud your work ethic! Perhaps I'll dive into something like this for my 2015 annual review.

    You've got some impressive goals for 2015, so good luck to you.

    You've got yourself a new follower over here so I look forward to watching you and your wife grow financially

    1. Thanks for visiting, American Dividend Dream. See if you can find some time to share those excel charts next year! I visited your blog -- great start and congratulations on getting married and starting your new life with a strong focus on financial responsibility! We certainly did not have our act together in that way when we got started! Good luck and hang in there with the blog -- though somewhat time-consuming, I can promise you it is extremely rewarding!

      Best of luck to you for 2015 and reaching your goals.

  7. wow I really enjoy reading this post. its like your a CEO of a company and letting the shareholders know whats going on. great stuff!!

    1. Thanks for your kind words, FFdividend! You've been a regular commenter on my posts and I really appreciate that!



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