21 Dividend Increases: July 25-29, 2016

Includes: BBT • CBOE • CBS • CMA • COLB • CTBI • EMBT • EQM • ETP • HSY • K • PAG • PROV • RAY • RSG • SOHO • SPG • SUN • SXL • TILE • TRNO 

Summary

• Companies can only increase their dividends regularly if earnings grow sufficiently.
• I like monitoring dividend increases for stocks on my watch list of dividend growth stocks, because I consider such stocks to be candidates for further analysis.
• This past week, 21 companies on my watch list announced dividend increases, including 2 of the stocks I hold in my portfolio.

Recent Buy: Nike Inc

This article originally appeared on The DIV-Net on Wednesday, August 26, 2016.

24 June 2016: Bought 47 shares of NKE at $52.84 per share. Founded in 1964 and headquartered in Beaverton, Oregon, Nike Inc (NYSE:NKE) is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, and accessories. The company's portfolio brands include the NIKE Brand, Jordan Brand, Hurley and Converse. NKE sells its products to retail accounts, through NIKE-owned retail stores and Internet Websites, and through a mix of independent distributors and licensees.

NKE was the top ranked stock in the June edition of my 10 Dividend Growth Stocks series. The stock is a Dividend Contender with a track record of 14 consecutive years of dividend increases and a 10-year dividend growth rate of 16%. NKE pays quarterly dividends of 16¢ per share in the months of January, April, July and October.

14 Dividend Increases: July 18-22, 2016

Includes: BHB • BMTC • HEP • LFUS • LFUS • LNN • LTXB • MBWM • MMP • NTRS • SWK • TCP • TLP • WES 

Summary

• Companies can only increase their dividends regularly if earnings grow sufficiently.
• I like monitoring dividend increases for stocks on my watch list of dividend growth stocks, because I consider such stocks to be candidates for further analysis.
• This week, 14 companies on my watch list declared dividend increases.

Three Round Out Buys

Earlier this month I reported selling several stocks, including three winners (NTT, RS, O – but only half), three more winners (TD, WPC, AVA) and four more positions (PM, CVX, STWD, MDP).

My reason for this sudden selling spree is that I want to prepare DivGro for options trading. Recall that I'm hoping to boost dividend income by selling options against some of my DivGro positions. Each option controls 100 shares. Covered call writing, the strategy I'm most interested in, requires that I own 100 shares for every call option I write.

Many of my DivGro positions consist of fewer than 100 shares, so I would have to round out the number of shares to 100 (or multiples of 100) before writing covered calls. Today's article is about buying shares to round out 3 positions and to make them eligible for options trades.

16 Dividend Increases: July 4-15, 2016

Includes: BSET • CMI • DFS • DUK • EDR • EPD • GEL • HCSG • NNN • OHI • OXY • PAYX • PNC • R • SJM • WBA 

Summary

• Companies that regularly increase dividends show confidence in future earnings growth potential.
• Monitoring dividend increases for stocks on my watch list helps me identify candidates for further analysis.
• In the past few weeks, 16 companies on my watch list declared dividend increases, including 3 of the stocks I hold in my portfolio.

Yowzah!

Yow'zah! : an exclamation indicating excitement, usually associated with the observation of an event or object that greatly exceeds the ordinary
      Urban Dictionary

After blogging for nearly 1,300 days since the start of DivGro, today I crossed the half million page view milestone! What a journey it has been! With this post, as with my previous milestone post, I'd like to celebrate a little and hopefully encourage other dividend growth investment (DGI) bloggers to keep going and help this wonderful community go from strength to strength!

The last time I wrote a milestones article, I reported reaching 200,000 page views (pv's) at a daily average of 249 pv's. That article was the 201^st one posted on DivGro. At the time, my most popular article was Popular Dividend Growth Stocks, with 2,640 pv's.  The runner-up, Tracking your DGI Portfolio, had 2,140 pv's. And, at the time of writing that article, I had four articles with at least 1,000 pv's.

Today, I'd like to give updates on these milestones and report a few more...

Recent Buy: Wells Fargo & Company

24 June 2016: Bought 54 shares of WFC at $46.51 per share. Wells Fargo & Company (NYSE:WFC) is a diversified, community-based financial services company with $1.8 trillion in assets. Founded in 1852 and headquartered in San Francisco, the company provides banking, insurance, investments, mortgage, and consumer and commercial finance through 8,800 locations, 13,000 ATMs, the internet, and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy.

WFC is a Dividend Challenger with a 6-year streak of dividend increases and a 10-year dividend growth rate of 4%. The company cut its dividend in March 2009 to preserve capital in the midst of the Great Recession, and resumed dividend increases in 2011. WFC pays quarterly dividends of 38¢ per share in the months of March, June, September and December.

With this buy, DivGro's projected annual dividend income increases by $82.08.

Closing Four More Positions

The markets are climbing higher and higher...

Today, the Dow surged to a new record high, closing at 18,347.67 – about 35 points above the previous record set on 19 May 2015. The S&P 500 built upon its record close yesterday, pushing the record high up another 15 points to 2,152.14. The Nasdaq is now in positive territory for 2016, but still 3.6% under its record close.

Amid these record-setting movements, I've been closing some of my DivGro positions. Last week I closed five positions and reduced one, reported here and here. Today I'm reporting on four more sells.

10 Dividend Growth Stocks For July 2016

Includes:  AAPL • BA • BEN • CVS • EXPD • GD • LOW • TGT • TRV • VFC 

Summary

• Every month, I rank a selection of the CCC dividend growth stocks to identify top candidates worthy of further analysis. 
• I use different screens every month to trim the CCC list of more than 750 stocks to a more manageable number of candidates.
• Using a multi-stage dividend discount model and fundamental analysis, I rank the remaining stocks and assign a 7-star rating to the top 10 ranked stocks.
• This article reveals the top 10 ranked stocks for July.

Selling Three More Winners

I sold three winners recently and today I'm reporting on selling three more.

So, why am I selling stocks that are performing well and continue to pay increasing dividends? The main reason is that I'd like to trim the number of positions in DivGro and increase the size of some of my core holdings.

As mentioned earlier, I'm hoping to boost my dividend income by selling options against some of my DivGro positions. Covered call writing is a safe way to earn extra income on stocks you own. Typically, you sell one contract for every 100 shares you own and collect an option premium in return. Currently, many of my DivGro positions involve fewer than 100 shares, so by increasing those positions, I'll have more opportunities to execute options trades.

Selling Three Winners

As a dividend growth investor, I select and buy stocks with a solid track record of paying and increasing dividends. I try to assess the likelihood that companies will continue to pay and increase their dividends, taking things like earnings growth potential, dividend safety and payout ratio into account. If I like what I see, I buy shares with the intent of holding onto them and collecting dividends.

Sometimes, a company decides to cut or eliminate its dividend. I really hate when this happens, because I prefer growing dividends over shrinking ones! Usually, when a company decides to cut or eliminate its dividend, I sell my shares. Experience has taught me that hanging on to shares after a dividend cut is foolhardy.

Dividend growth investing is a long-term strategy. You buy stocks that pay dividends, reinvest those dividends (if you can) and compound returns over time. So, why sell stocks if they perform well and continue to pay increasing dividends?

What Have You Done For Me Lately?

Every quarter, I review my portfolio of dividend growth stocks, DivGro. These reviews provide a synopsis of actions I've taking throughout the quarter and present a summary of dividend income, dividend adjustments and portfolio performance.

To evaluate the performance of individual stocks, I create charts for stocks I've owned for longer than one year. The charts present data such as annualized total returns, yield on cost, and year-over-year dividend increases. Underperforming stocks are easily identified in this way.

Lately, I've been adding to existing positions more frequently than opening new positions. I haven't eliminated positions often. My reasons for eliminating positions include dividend cuts and in some cases, mergers and acquisitions.

Three More Home Runs!

I hit my first home run with DivGro in October 2014, when General Dynamics Corporation (GD) crossed the 100% profit mark. I initiated a position in GD in March 2013 at $67.61 per share. The stock is trading around $138 per share, still placing it in home run territory. With dividends added, GD has returned 117% and on an annualized basis, a remarkable 35%!

My second home run came February this year, when Nippon Telegraph and Telephone Corp (NTT) reached the 100% milestone.  I bought shares of NTT in February 2013 at $22.43 a share. The stock is trading near $48 per share, still in home run territory! With dividends added, NTT has returned 124%, or 37% annualized – even better than GD!

Today, I'm happy to report 3 more home runs! All of these stocks have passed the 100% profit mark a while ago when taking total returns into account, but they've only recently crossed doubler status as far as the stock price is concerned.

Quarterly Review, Q2-2016

In the second quarter of 2016, I finalized the portfolio consolidation process initiated last year. DivGro now contains all my dividend growth stocks, regardless of the brokerage account that hold them. The stocks are spread over 5 different accounts: one trust account at Scottrade, another trust account at FolioInvesting, and 3 IRA accounts, also at FolioInvesting.

Each quarterly report summarizes the actions I've taken during the preceding quarter. I also provide a summary of dividend income, dividend adjustments, and portfolio performance. In order to evaluate the performance of individual stocks, I create charts for stocks I've owned for longer than a year. If stocks do not perform acceptably, they should be replaced.

6 Dividend Increases: June 13-July 1, 2016

Includes:  GIS • JW.A • KR • O • WOR • WPC

Summary

• Companies can only increase their dividends regularly if earnings grow sufficiently.
• One way to identify dividend growth stocks for further analysis is to monitor dividend increases.
• In the past few weeks, 6 companies on my watch list announced dividend increases, including 2 of the stocks I own.

Monthly Review: June 2016

This month I initiated my first option trades in DivGro, one covered call and one cash-secured put. I've been trading options for several years, though not within the context of my dividend growth portfolio. One of my goals this year is to find opportunities to generate extra income with options. Selling options and collecting the premiums provide a nice way to boost dividend income.

Market volatility increased in June due to Brittain's so-called Brexit vote and the somewhat unexpected result. I'm quite happy to report that DivGro outperformed the markets in June, gaining 2.04% versus 0.80% for the Dow and only 0.09% for the S&P 500.

A fellow dividend growth investor and blogger, Investment Hunting, is running a blogger interview series in which he asks DGI bloggers a series of about 20 questions. I decided to participate and reveal a little more of my background and what I do for a living. You can read the interview here.