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Wednesday, February 28, 2018

Monthly Review of DivGro: January 2018

Welcome to the first monthly review in 2018 of DivGro, my portfolio of dividend growth stocks.

This review is quite late as my investment blogging activities are being impacted by a very busy work schedule. In fact, I find it quite difficult to get around to doing some much-needed administration, let alone write a review article!

Well, I finally had some time to prepare and write this review for January!

Dividend Income

While dividend income is down from a year ago, the $927 collected in January is a good chunk of money! The total represents about 5% of my 2018 goal of collecting $18,000 in dividend income.

Here is a list of the dividends I received in January:
  • Blackstone Mortgage Trust (BXMT) — income of $186.00
  • Chubb (CB) — income of $17.04
  • Cisco Systems (CSCO) — income of $58.00
  • Walt Disney Company (The) (DIS) — income of $168.00
  • Hannon Armstrong Sustainable Infrastructure Capital (HASI) — income of $66.00
  • Main Street Capital (MAIN) — income of $85.50
  • Altria (MO) — income of $49.50
  • AllianzGI Equity & Convertible Income Fund (NIE) — income of $209.00
  • Nike (NKE) — income of $20.00
  • Realty Income (O) — income of $10.63
  • Wal-Mart Stores (WMT) — income of $39.78
  • Xcel Energy (XEL) — income of $18.00

Following is a chart showing DivGro's monthly dividends plotted against projected monthly dividend income (PMDI). Quarter-ending months are huge outliers:
This is one reason that I now create a rolling 12-month average of dividends received (the orange bars) plotted against a rolling 12-month average of PMDI (the blue, staggered line):
While it would be nicer if dividends are distributed more evenly, it is not something that would drive my investment decisions.

Dividend Changes

DivGro's projected annual dividend income (PADI) continues to increase steadily and now stands at $16,719. This means I can expect to receive monthly dividend income averaging about $1,393 in perpetuity, assuming everything stays the way they are.

Of course, I expect the companies I've invested in not only to continue to pay dividends but to increase them over time! Also, until I retire, I hope to continue to reinvesting dividends, so DivGro's PADI should continue to grow through dividend growth and through compounding.
In January, the following stocks announced dividend increases:
  • Aflac (AFL) — increase of 15.56%
  • Dominion Resources (D) — increase of 8.44%
  • Intel (INTC) — increase of 10.09%
  • 3M (MMM) — increase of 15.74%
  • Northrop Grumman (NOC) — increase of 10.00%
  • Realty Income (O) — increase of 3.06%
  • Omega Healthcare Investors (OHI) — increase of 1.54%
  • Valero Energy (VLO) — increase of 14.29%
As a result of these changes, DivGro's PADI will increase by $217.

I like seeing dividend increases above 7%, so I'm very happy with this month's increases! Five of the eight increases are double-digit percentage increases!


Here is a summary of my transactions in January:
  • Royal Dutch Shell plc (RDS.B) — new position of 140 shares
  • Vanguard REIT Index ETF (VNQ) — new position of 125 shares
  • Cisco Systems (CSCO) — sold 300 shares and reduced my position to 200 shares
These transactions increased DivGro's PADI by about $618.


It is worth looking at the markets to understand the environment we're investing in, even though I no longer compare DivGro's performance to those of the markets:

Dec 29, 201724,719.222,673.616,903.392.41%
Jan 31, 201826,149.392,823.817,411.482.72%

In January, the DOW gained 5.79%, the S&P 500 gained 5.62%, and the NASDAQ gained 7.36%. The yield on the benchmark 10-year Treasury note increased  to 2.72%.

Portfolio Statistics

Based on the total capital invested and the portfolio's current market value, DivGro has delivered a simple return of about 56% since inception. In comparison, DivGro's IRR (internal rate of return) is 18.6%. (IRR takes into account the timing and size of deposits since inception, so it is a better measure of portfolio performance).

I track the yield on cost (YoC) for individual stocks, as well as an average YoC for my portfolio. DivGro's average YoC increased from 3.98% last month to 4.07% this month.

Another interesting statistic is percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 12.94%, up from last month's 11.27%.

Finally, DivGro's projected annual yield is at 4.70%, up from last month's value of 4.48%. I calculate projected annual yield by dividing PADI ($16,719) by the total amount invested.

Here's a chart showing DivGro's market value breakdown. Dividends are plotted at the base of the chart so we can see them grow over time:

Looking Ahead

The busy-ness at work will last for another two months or so. I'll be happy when things return to normal so I can keep this blog updated and, more importantly, spend some solid time on stock analyses and investment decisions!

Meanwhile, here is a sneak peak at what I'm working on. Enjoy!

Thanks for reading and take care, everybody!

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