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Dividend Growth Investing: It's Not The Number Of Shares, But The Invested Capital That Matters
- The amount of capital you have in a company is more important than the number of shares you have in a company.
- The more the capital you have in a dividend stock, the higher the amount of dividends you receive.
- Therefore, it’s better to think in terms of how much capital you are using to buy your shares, instead of how many shares you are buying.
- The above make sense only given that you buy shares at proper valuations, as it goes without saying the lower price you pay, the higher income you get.
- Thinking in terms of how much capital you have allocated to each holding also helps with risk management by thinking of stock allocation and income allocation.
How Do I Stick To The Slow, But Sure Process Of Dividend Growth Investing?
- I started with small number of shares that paid only a few bucks every 3 months.
- Slowly, building a portfolio of these dividend growers, the few bucks grow into possibly a few hundred bucks in a year.
- Tracking the growth of the dividend helps me stay the course. I will show you my simple way of tracking the dividend growth.
- The income is growing at a rate much faster than inflation to maintain purchasing power.
What I'm Doing With My Kinder Morgan Shares As A Dividend Growth Investor
- Kinder Morgan has a projected annual dividend of $2.00 per share in 2015.
- That's a projected dividend yield of 5% at today's price of $40.
- The dividend is expected to grow by at least 10% annually from 2015 to 2020.
- $17B of growth projects for the next 5 years has already been identified.
- Looking to scoop up some shares between $36 and $39.
Qualcomm Priced At 16% Discount With Double-Digit Growth
- Qualcomm is undervalued with 16% discount around the $73 price level.
- Strong results from Q3 earnings release with raised FY2014 EPS guidance.
- There continues to be a strong need for Qualcomm's products as its revenue continues to grow in the double digits.
- I added to my Qualcomm position at the end of July. Now it's even cheaper.
When To Add To An Existing Dividend Growth Holding That Has Been Advancing
- As a self-directed dividend investor, it’s essential to keep emotions in check when investing and making a trade.
- When you feel like selling, maybe it is time to buy more shares instead.
- The best time to buy a high quality company is when it's at the right valuation.
- F.A.S.T. Graphs helps with checking the valuation of a company.
- Even when the share price is at fair valuation, it could go lower. Dollar-cost averaging into a position is psychologically more bearable than buying in a big lump sum.
Q2 2014 Update: My Whistler Income And Growth Portfolio
- Managing my own income and growth portfolio requires periodic reviews.
- From actual decisions that I make in the portfolio, I can get a better feel for my temperament.
- Part of my quarterly review is to check sector allocation to determine if too much capital is allocated to one specific sector.
- Another part of the review is to check dividend allocation to ensure I'm not getting too much dividends from one specific sector.
- These updates are kind of like a journal which shows exactly what I did - for better or for worse.
Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation
- I bought Raytheon at a 10% discount this week.
- At the end of Q1 2014, it had a backlog of $32.2B.
- It is a high quality company with a current yield of 2.6% and expected dividend growth of 8 - 10%.
- Its earnings growth should lead to steady price appreciation and a growing dividend.
- A look at my lessons learned after selling out of Raytheon a year ago.
How To Better Use Capital To Get Higher Income And Higher Total Return
- Set buy ranges ahead of time to eliminate as much emotion as possible.
- FAST Graphs & Morningstar are tools to help you identify the fair price of a security. Combined with technical charts, you can determine a price to ease in your money.
- Once you set up the buy ranges, your brokerage or Finviz.com can be tools to indicate what is a good buy on any given trading day.
- Setting buy ranges rationally increases the starting yield and total return of your new purchase.
- Periodically update your buy ranges so that you are always ready to deploy your cash on the best valued company for your portfolio.
Characteristics Of A Solid Dividend Portfolio
- I'm primarily using dividend growth and value investing for my portfolio.
- To ensure my income portfolio is solid, I analyze individual companies it holds.
- I look at each holding on its dividend safety, dividend growth, and its expected total return.
- Only buy good companies at a fair or discounted price to improve total return.
- In a simple way, I will use Target to illustrate the above concepts.
IBM's Stagnant Revenue May Be Coming To An End And It's Priced At A Discount Right Now
- IBM is sitting at 13% to 27% discount depending on which tool you use.
- IBM has increased its dividends for 19 years at a compounded annual growth rate of 17.5%.
- With earnings per share expected to reach $20 by 2015, and ample free cash flow, IBM's dividend should continue to grow at least 10% annually.
- As $24B has been invested into Big Data, and 15 planned data centers, totaling to 40 across the globe, revenue may start to pick up in a couple years.
Bought Silver Wheaton For Capital Gains
- Silver Wheaton is the biggest precious metals streaming company on earth.
- It has lowered downside risk because it pays low, fixed costs for silver and gold.
- Current risk/reward is in buyer's favour as price hits 400-day MA.
- 40% upside potential from Friday's closing price.
How I 'Played' My Microsoft Shares And What I'm Doing With Them
- Nice capital gain of 40+% if you bought Microsoft shares in early 2013.
- Recognize that the undervalued Microsoft opportunity between 2010 and 2013 is gone.
- Going forward, the return of buying shares from this point on will base on Microsoft's business performance.
- I shall continue to hold my shares, expecting ~8% dividend growth annually.
- I may add shares to this AAA rated company on meaningful dips.
Q1 2014 Update: My Whistler Income And Growth Portfolio
- Managing my own income and growth portfolio requires periodic reviews.
- Part of my quarterly review is to check sector allocation to determine if too much capital is allocated to 1 specific sector.
- Another part of the review is to check dividend allocation to ensure I'm not getting too much dividends from 1 specific sector.
Build A Margin Of Safety For Your Dividend Income
- A low payout ratio does not suggest plenty of room for dividend growth.
- Companies with wide economic moats are likely to continue growing dividends.
- Companies with strong balance sheet strength are more likely to continue growing dividends.
Book Review: The Single Best Investment - Creating Wealth With Dividend Growth
- Growing dividends from a portfolio of stocks serve as a compounding machine.
- The stocks in this portfolio have the characteristics of high quality, high yield, and high growth of yield.
- The essential ingredient in compounding is time.
- Adding High Growth Core Holdings To Strengthen My Dividend Growth Portfolio
- Reduce Risk Of Buying A Lower Quality Company For A Higher Yield And Return
- Adding To The Core For My Whistler Income And Growth Portfolio
- Switch Rogers Communications For 2 Other Core Holdings
- My Core Holdings With High Total Return Estimations
- Identifying The Core Holdings In My Whistler Income And Growth Portfolio
- My Whistler Income Portfolio's 1st Year Landing
- Cashing In Some Gains From Ross Stores To Diversify My Income Stream
- Replace A Loser With A Dividend Growth Blue Chip
- Why Building A Cash Position For My Dividend Income Portfolio Makes Sense
- Before Buying A Dividend Growth Stock: Things To Do
- Preparing For Retirement Early: Set A Margin Of Safety For Your Total Return
- Building A Quality Income Portfolio - Part 2: At The Stock Level
- Building A Quality Income Portfolio - Part 1: At The Portfolio Level
- Is The Pullback In Utilities And REITs Leading A Market Correction?
- Be Comfortable With Dollar-Cost Averaging Up
- Dividend Yield As An Indicator Of A Bargain