Recent Buy: DIS

Jan 27, 2015: Bought 27 shares of DIS at $94.32 per share.

The Walt Disney Company (NYSE:DIS), more commonly known as Disney, is a diversified international family entertainment company based in Burbank, California. Founded on October 16, 1923, by Walt Disney and Roy O. Disney, the company established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks. Today, Disney operates in five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media.

Disney pays dividends annually in the month of January and has a streak of 5 years of dividend increases. My initial yield on cost (YoC) is 1.22%.

Bonus Deposit, January 2015

On Wednesday, January 21, I deposited $10,000 cash into my DivGro portfolio. The bonus deposit is in addition to my regularly scheduled deposits of $2,500 per month.

This is the sixth bonus deposit I've made since starting DivGro. Its been a while since my last bonus deposit in March 2014 ($5,000) and even longer since my previous $10,000 bonus deposit (December 2013).

I prefer to allocate about $2,500 to new buys. Since that is exactly the amount of my regular monthly deposits, normally I have enough cash available to buy one stock per month. However, I've set some fairly aggressive goals for 2015. To reach those goals, I'll need to take some extraordinary action!

Recent Buy: IBM

Jan 27, 2015: Bought 16 shares of IBM at $154.04 per share.

16 shares of IBM adds $70.40 to DivGro's projected annual dividend income, raising the total to $4,956.10. One of my goals for 2015 is to increase DivGro's projected annual dividend income to $7,500. I have a long way to go...

To see why I added shares to my IBM holding, please read this article at Seeking Alpha.

Dividend Increases, January 2-16, 2015

I have a watch list of dividend growth stocks that I monitor for dividend increase announcements. The watch list contains a subset of David Fish's CCC list and my DivGro holdings. I monitor dividend increases to identify dividend growth candidates worthy of consideration. Companies that increase dividends regularly show confidence in their future earnings growth potential.

In the first few weeks of 2015, the following stocks in my watch list announced dividend increases. None of these are DivGro holdings.  The table is sorted by last column, %Increase, and dividends are annualized:

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.

10 Dividend Growth Stocks for January 2015

Includes: AVA • BBL • CAT • DOV • DOW • HP • IBM • JNJ • MO • PM • STWD • T • TAL • TGH • TUP 

David Fish's CCC list is a wonderful resource for dividend growth investors. The list is updated every month and contains all U.S.-listed stocks that have raised their dividends for at least five consecutive years. I use a series of filters, presented in a previous article in this series, to reduce the CCC list to a more manageable number of candidates. Out of 611 stocks in the latest list (12/31/14), 49 stocks made the cut.

I ranked these stocks using a proprietary ranking system and assigned a star-rating to each stock (out of a maximum of 7 stars).

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

Financials Dominate my Watch List

Of all the pages on my blog, I change my Watch List page most frequently. The reason is my watch list of dividend growth stocks is dynamic and I update it at least once a month. The watch list contains all of DivGro's holdings, as well as a subset of David Fish's CCC stocks. It is organized by sector using GICS sector names.

Dividend growth stocks in the Financials sector dominate the CCC list and also my watch list. In the CCC list, there are 176 Financials sector stocks compared with only 8 Telecommunication Services sector stocks. For this reason, I prefer a proportional sector allocation. Every month, I calculate sector targets matching the proportional number of stocks of sectors in my watch list.

This year, I'm planning to increase the number of holdings in DivGro from 36 to 42. I'll continue to use my sector targets to bias new purchases to sectors that are under-represented. Furthermore, I plan to continue my monthly series of 10 Dividend Growth Stocks in which I rank candidates overall and by sector.

Quarterly Review, Q4-2014

This Saturday will be two years since my first post on this blog. Its been a wonderful journey and I've learned a lot about dividend growth investing and the benefits of blogging about something you're passionate about.

The past quarter, the 8^th for DivGro, has been quite illuminating. After joining Seeking Alpha in September, the increased exposure created more traffic for DivGro and helped generate some passive income through Google Adsense. Additionally, I wrote three premium articles for Seeking Alpha, which earned some additional income. My plan is to deposit this money into my DivGro account.

In my previous quarterly review, I reported that DivGro's page views had crossed the 100,000 mark. Well, I'm happy to report that DivGro's page views have now crossed the 150,000 mark. That's 50,000 page views in about three months at an average of about 555 page views per day.

Monthly Review, December 2014

As we enter this new year, I'd like to review DivGro's performance in 2014. Before posting my quarterly and annual reviews, let me first take care of December's monthly review. As always, I'm updating my blog's Performance page so readers can review DivGro's status and performance relative to the markets and to prior months.

On the last day of 2014, DivGro's market value was $118,213, down slightly from November's month-end market value. The portfolio is delivering an average yield on cost (YoC) of 4.6%. Projected monthly income is $407, up from $398 at the end of November.

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).