Relieving the Pain of Dividend Growth Investors

By Torsten Tiedt

Dividend growth investing is a pain, because it is much more difficult to find solid dividend growth stocks than it should be.

In this guest article, I'll explain why I think finding solid dividend growth stocks is harder than it should be and how I tackled this problem for me (and for you!).

DivGro Pulse: January 2018

This month I'm celebrating the 5^th anniversary of DivGro!

I founded DivGro in January 2013 to focus on dividend growth (DG) investing. Since then, my portfolio steadily has grown well beyond what I could have imagined!

Just this week, I hit my 10^th home run with DivGro, when my position McDonald's (MCD) crossed 100% in total returns. And, without giving everything away, on Friday three more positions earned home run status after some extraordinary price action! This market sure looks toppy now...

Once a month, I write a pulse article that focuses on strategy and monitors the health of my portfolio. I update the fair value estimates of DG stocks in my portfolio and use the information to identify undervalued DG stocks suitable for further investment. Finding undervalued stocks is quite challenging these days!

20 Dividend Increases: January 15-19, 2018 (Part 2: The Remaining Sectors)

Companies that regularly raise their dividend payments show confidence in future earnings growth potential. In the past week, 20 companies on my watch list declared dividend increases, including two of my DivGro holdings.

Part 1 covered dividend increases for the Energy and Real Estate. This is Part 2, which presents dividend increases for the remaining sectors.

As a bonus, I include a summary of available ex-dividend dates for the next two weeks.

20 Dividend Increases: January 15-19, 2018 (Part 1: Energy and Real Estate Sectors)

Companies that regularly raise their dividend payments show confidence in future earnings growth potential. In the past week, 20 companies on my watch list declared dividend increases, including 2 of my DivGro holdings.

Part 1 covers dividend increases for the Energy and Real Estates, while Part 2 will cover dividend increases for the remaining sectors.

As a bonus, I include a summary of available ex-dividend dates for the next two weeks.

Home Run Number 10

I use the term home run to describe any position in DivGro that has crossed the 100% mark in total return.

Before becoming a dividend growth investor, I sold half of my shares when a position doubled. I justified the action by saying that now I'm playing with "house" money.

I no longer think that way. Most of my positions are income-generating dividend growth stocks and cutting my income in half just because the position has doubled, seems silly. Now I'm more than happy to hold my home runs and to continue collecting their growing dividends.

Today, I'm happy to announce my 10^th home run in DivGro!

10 Dividend Growth Stocks For January 2018

The CCC list is a wonderful source for dividend growth investors. Compiled and updated every month by David Fish, the CCC list contains U.S. companies with at least 5 consecutive years of higher dividend payments. The accompanying spreadsheet provides key statistics of the CCC stocks.

In my monthly 10 Dividend Growth Stocks series, I identify 10 CCC stocks for further research. To create the list, I rank a selection of the CCC stocks and assign a 7-star rating to each stock. Stocks rated 5 stars or better are worthy of further analysis.

This month, I decided to select CCC stocks by compiling popular dividend growth stocks and Real Estate Investment Trusts (REITs) from recent Seeking Alpha articles, and stocks in my DivGro portfolio.

4 Dividend Increases: January 1-12, 2018

Companies that regularly raise their dividend payments show confidence in future earnings growth potential. I like monitoring dividend increases for stocks on my watch list because I consider such stocks to be candidates for further analysis.

In the past 2 weeks, 4 companies on my watch list decided to increase their dividends.

Only one company announced a double-digit dividend increase. However, two of the remaining stocks have increased their dividends multiple times in the past year and their year-over-year dividend increases are double-digit percentage increases, too.

Recent Sell: Cisco Systems

On 3 January, the February $34 covered call options I sold against my Cisco Systems (CSCO) shares got exercised early.

CSCO traded ex-dividend on 4 January, so the options holder decided to call my shares away just in time to grab the dividend. This is one of the drawbacks of American-style options – they can be exercised before expiration.

With CSCO trading in the money, I was well aware of the possibility that the options could be assigned. However, I was traveling from South Africa via Dubai to San Francisco (an exhausting 30 hours of traveling time!) and could not make a defensive move in time. Fortunately, I still own 200 CSCO shares, so I collected the dividend on those shares.

This article presents a summary of my CSCO trades and a final profit/loss analysis.

Quarterly Review of DivGro, Q4-2017

Welcome to the 20^th quarterly review of DivGro, my portfolio of dividend growth stocks. This month I'm celebrating the fifth anniversary of DivGro!

I have some challenging goals for 2018, including increasing projected annual dividend income to $18,500, earning $18,000 in dividend income, and securing $12,000 in options income.

Before we focus on the future, though, let's look at what happened with DivGro in Q4-2017.

Top Holdings of Real Estate ETFs

Analysing the top holdings of similar ETFs is insightful. Publicly-available data on the top holdings and assets under management allow me to rank these holdings and to construct a virtual portfolio, which I can compare with my own portfolio. It helps me to identify candidates for further analysis and possible investment.

Recently, I analyzed the top holdings of 32 dividend ETFs and presented a ranked list of the top 50 dividend stocks held in these ETFs. No Real Estate sector stocks made the top 50 list because real estate stocks are commonly organized as real estate investment trusts (REITs), which have their own ETF category.

In this article, I analyze 15 real estate ETFs that focus specifically on the U.S. Real Estate markets. I present the top holdings held in these ETFs along with key statistics and fair value estimates from Morningstar.

More Than 500 Dividend Increases in 2017

I monitor dividend increases for stocks on my watch list of dividend growth stocks to identify candidates for further analysis. Companies can only increase their dividends regularly if earnings grow sufficiently.

In 2017, I reported on more than 500 dividend increases from companies on my watch list. Exactly 497 companies on my watch list increased their dividends, but 42 stocks increased their dividend more than once in 2017, so the number of increases tops 500.

This article provides a summary of the dividend increases in 2017. I share the average dividend increase and identify the top increases, overall and by sector.

Monthly Review of DivGro: December 2017

Welcome to the last monthly review in 2017 of DivGro, my portfolio of dividend growth stocks!

The goal of these monthly reviews is to share updates to my portfolio and to provide a summary of dividends collected. I also consider the impact on DivGro's projected annual dividend income (PADI).

Quarter-ending months are exceptional months for dividend growth investors, as many companies tend to pay dividends in these months. In December, I received dividends totaling $2,245.05 from 31 stocks in my portfolio. Incredibly, this is just 51¢ more than my previous record total of $2,244.54.

So I'm happy to report that December was another record month for DivGro!

DivGro's High and Low Performers in 2017

The year 2017 is just about over and I thought it would be a good time to review some of DivGro's highs and lows of the year.

My DivGro portfolio contains lots of winners! Of the 56 positions, 51 have positive total returns. The five losing positions are down an average of only 5.2%. The largest loss is from Omega Healthcare Investors (OHI), with total returns of -11%.

On the other hand, the portfolio is full of double-digit and triple-digit percentage winners. The biggest winner is General Dynamics (GD), with total returns of 220% or 46% annualized. The runner-up is Microsoft (MSFT), with total returns of 205% or 45% annualized. There are three other stocks with total returns above 100%.

Options Update: December 2017

Welcome to my last options update article for 2017!

I write monthly options update articles to keep track of options trades in my DivGro portfolio. Each options update serves as a status report on the open options and the obligations I have. I also report on new trades and provide a running tally of DivGro's options income to date.

While DivGro is focused on investing in dividend growth stocks, I added options trading to the mix in June 2016. My goal is to generate options income and to use the money I collect to buy more dividend growth stocks. I sell covered calls on dividend growth stocks I own or secured puts on stocks I'd like to own.

DivGro Pulse: December 2017

The year is almost over and this is the last edition of my monthly pulse article series for 2017!

In these pulse articles, I focus on strategy and monitor the health of my portfolio of dividend growth stocks. I update the fair value estimates for every stock my portfolio and use the information to identify undervalued stocks suitable for further investment.

To estimate fair value, I perform a multi-stage Dividend Discount Model analysis, a Gordon Growth Model analysis, and an analysis of dividend safety. My final fair value estimates also consider fair value estimates and price targets available elsewhere, such as those from Morningstar, finbox.io, Simply Safe Dividends, and S&P Capital IQ.

10 Dividend Growth Stocks For December 2017

David Fish's CCC list contains dividend growth stocks that have paid higher dividends for five consecutive years. This list is updated every month and contains more than 800 stocks. An accompanying spreadsheet provides key statistics of the CCC stocks.

Ranking so many stocks would be a daunting task. To simplify things and to introduce some variation from month to month, I use different screens to trim the CCC list to a smaller selection of candidate stocks. I rank these candidates and present the top 10 ranked stocks in my monthly 10 Dividend Growth Stocks series.

This month screen favors a selection of CCC stocks with high Safety and Growth scores according to Simply Safe Dividends.

2 Dividend Increases: December 18-22, 2017

Companies can only raise their dividends regularly if earnings grow sufficiently. One way to identify dividend growth stocks for further analysis is to monitor dividend increases.

Only 2 companies on my watch list announced dividend increases this week.

Neither of these increases was double-digit percentage increases.

Yowzah! (Again)

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

On 16 December 2017, after blogging for about 1,800 days, I crossed the one million page view milestone! With this post, I'd like to celebrate this milestone and hopefully encourage other dividend growth investment (DGI) bloggers to keep going and to help this community go from strength to strength!

On 17 July 2016, the last time I wrote a milestones article on page views, I reported reaching 500,000 page views at a daily average of 389 page views. That was article #370. This one is #585 and I've averaged 555 page views since DivGro's inception.

12 Dividend Increases: December 11-15, 2017

Companies that regularly raise their dividends show confidence in the potential growth of future earnings. Monitoring dividend increases for stocks on my watch list helps me identify candidates for further analysis.

In the past week, 12 companies on my watch list announced dividend increases, including two of the stocks I own. 

Four stocks announced double-digit percentage increases this time.

Monthly Review of DivGro: November 2017

Welcome to the November review of DivGro, my portfolio of dividend growth stocks! The goal of these monthly reviews is to share updates to my portfolio and to provide a summary of dividends collected. I also consider the impact on DivGro's projected annual dividend income.

In November I opened one new position and added shares to two existing positions. Additionally, I closed three positions, one due to an options assignment and two for tax harvesting.

Five of the stocks in my portfolio announced dividend increases in November, and one stock announced a dividend cut.

As for dividend income, in November I received dividends totaling $1,005 from 16 stocks in my portfolio, a year over year increase of 51%. So far in 2017, I've collected $14,283 in dividends or about 110% of my 2017 goal of $12,960.

Goals for 2018

Welcome to my goals post for 2018!

In this article, I'll do a quick review of my 2017 goals and present my goals for 2018.

I believe in setting stretching yet achievable goals. It is not useful to entertain goals that are impossible to achieve. On the other hand, goals that are easily achievable will not require special effort and probably won't give you a special sense of achievement.

Stretching goals demand extra effort and focus. They require commitment, patience, and constant monitoring. Sometimes, when progress is not sufficient, they require a course correction.

Options Update: November 2017

I write monthly options update articles to keep track of options trades in my DivGro portfolio. I sell covered calls on dividend growth stocks I own or secured puts on stocks I'd like to own.

Each update serves as a status report on the open options and the obligations I have. I also report on new trades and I provide a running tally of DivGro's options income to date.

While DivGro is focused on investing in dividend growth stocks, I added options trading to the mix in June 2016. My goal is to generate options income and to use the money I collect to buy more dividend growth stocks.

Through November 2017, I've collected options income totaling $20,263.

Recent Buy: SCHD

Earlier this year I opened a position in the Vanguard High Dividend Yield ETF (VYM), an exchange-traded fund (ETF). In my most popular Seeking Alpha article to date, I presented the top holdings of 27 Dividend ETFs. Of these ETFs, VYM impressed me the most, with exceptional ratings from three leading authorities on ETFs, a solid 2.79% yield, impressive 3-year returns of 39%, and a very reasonable expense ratio.

Last month, when I updated my Dividend ETF analysis and presented ratings on 32 Dividend ETFs, it was the Schwab US Dividend Equity ETF (SCHD) that impressed the most.

24 Dividend Increases: December 4-8, 2017 (Part 2: Non-Financials)

Companies that regularly increase dividends show confidence in the potential growth of future earnings. I monitor dividend increases for stocks on my watch list of dividend growth stocks to identify candidates for further analysis.

Recently, 24 companies on my watch list decided to increase their dividends. Part 1 covered dividend increases from Financials and Real Estate sector stocks. Part 2 covers the non-Financials.

Four of the stocks I cover in Part 2 announced double-digit percentage increases.

24 Dividend Increases: December 4-8, 2017 (Part 1: Financials and REITs)

Companies can only increase their dividends regularly if earnings grow sufficiently. I monitor dividend increases for stocks on my watch list of dividend growth stocks to identify candidates for further analysis.

• Last week, 24 companies on my watch list decided to increase their dividends. Part 1 covers the Financials and Real Estate sectors. Part 2 will cover the non-Financials.

None of the stocks I cover in Part 1 announced a double-digit percentage increases. However, it still is worth looking at the list to see if any candidates seems worth analyzing.