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Approaching My First Year As A Dividend Growth Investor

As I approach my first year as a Dividend Growth Investor, I figured it was time for me to write my first article. I felt that I should share some of the great information that I have learned. I must begin by stating that I am not an investment professional. I am a full time healthcare provider with over 22 years experience in different levels of the healthcare system. I have been on a quest for knowledge on finance and investing since I was 18 years old...many years ago. I am now a 43 year old married father of 3.

I began my investing at 18 with my first $4 contribution to my IRA in a 20th Century mutual fund. I have read and studied many of the various investing methods including those of Peter Lynch, Warren Buffet, Benjamin Graham and many others. I studied charts. I watched TV. I have read the Wall st Journal and Investors Business Daily. Every few years my investment focus and style seemed to change. I was "lucky" enough to be successful in many of my so called "investments" over the last 20 years (now I realized that they were only "trades". I was fortunate to move my retirement portfolio to 90% cash prior to the decline in 2008 and to enter back into the market in 2010. After much reflection I realized that I was doing a lot of guessing that worked out in my favor. I personally needed to find a better method for me to achieve my goal of financial retirement.

After many hours of reading and study of the impressive contributors to the seeking alpha site, I began to focus on Dividend Growth Investing. I applied the style to my goals of a stable income stream during retirement and to my level of risk tolerance. I found that as I became older and my family matured, that I no longer had the luxury of stomaching a big risk and or loss. About 1 year ago, I decided to make a transition to being a Dividend Growth Investor.

Over the last year I moved my Simple IRA to a self directed IRA that allowed me to build a portfolio focused on Dividend Growth. I have already seen the results of this investing style and that I believe that it will allow me reach my retirement goals by the time I am 60 years old.

My Top 5 Holdings in my IRA Dividend Growth Portfolio (31 securities) are:

Company % of my portfolio

  1. McDonald's (NYSE:MCD) 5.46%
  2. Walgreen (WAG) 5.06%
  3. BP (NYSE:BP) 4.82%
  4. Royal Dutch (NYSE:RDS.B) 4.53%
  5. Coca-Cola (NYSE:KO) 4.33%

All five of the top holdings are large, well established companies with a history of paying and growing dividends with the *exception of BP, due to the dividend reduction from the Gulf Oil Spill. The dividend has been increased twice since the spill. *The last increase was from .48 to .54 per share, for a 12.5% increase.* The future is still unknown as to the results of current court cases and liability cost from the spill. But I feel that BP will be able to recover and resume growing their dividend in the next few years. Until then I am happy to accept the current 5% yield.

Company Dividend Yield

5yr Div


MCD $3.08 3.12% 14.3% 3.47%
WAG $1.12 2.5% 23.6% 3.54%
BP $2.16 5.3% -12.5% * 5.23%
RDS.B $3.44 5.09% 3.62% 5.11%
KO $1.12 2.81% 8.1% 2.9%

I am currently reinvesting all dividends with the exception of RDS.B because of the tax consquences of the dividends being reinvested into RDS.A shares. I still have a 13% cash to investing as opportunities present over the next few months and I am still adding funds to the account through payroll witholdings and employee match. My current yeild on cost (YOC) in 4.53%

Finally I would like to thank the many great contributors to seeking alpha, even the ones that I did not agree with...It allowed me to think and see another point of view.

Disclosure: I am long BP, KO, MCD, RDS.B, WAG, WMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.