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.