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Eric Landis
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I am a P.E. working as a Civil Engineer and am married with two kids. I recently took a more active role in managing my 401k for retirement and plan to share some of my experiences as I work to build my dividend growth portfolio. My interest in investing mostly began in 2005 when I started up an... More
  • My New Dividend/Growth Portfolio 0 comments
    Feb 24, 2013 9:51 AM

    I've always had an interest in investing in dividend paying stocks, but after reading a multitude of articles on Seeking Alpha, including a great recommendation by several members, Chowder if i recall correctly, I read the book The Single Best Investment by Lowell Miller.

    This book made complete sense to me and provided me the tools to re-build my 401K portfolio. In the past I've dabbled in mostly high growth potential stocks, hitting a few homeruns (TIE, BIDU, HANS, CMG) along the way, while losing plenty of money in others that didn't live up to the hype. The remainder of my funds I invested in boring old mutual funds.

    Last week I decided to take my 401K into my own hands and rebuild it from the bottom up. I knew it would cost a few dollars in transaction fees to get the job done with so many trades, but I feel in the long run this new, simple, formula can lead me to a great portfolio of buy and hold forever type stocks.

    I decided to invest roughly $500 each into 30 positions to make up my dividend growth portfolio. I used some amazing resources including David Allen Schwartz's http://www.tessellation.com/dividends/index.html and the site dripinvesting.org/. I also read countless investor presentations and quarterly earnings reports from company website and read many articles on seekingalpha.com.

    From hours of research in the evenings, after the wife and kid went to bed of course, I came up with this list 30 stocks to represent my future ticket to retirement.

    SYMBOLNAMEPRICEDIV/SHAREYIELD 
    AAPLApple Inc.450.8110.602.30 
    AEOAmerican Eagle Outfitters, Inc.20.640.442.20 
    AFLAFLAC Inc.50.071.402.80 
    CHDChurch & Dwight Co. Inc.61.451.121.90 
    CLRContinental Resources, Inc.83.89-- 
    CLXThe Clorox Company83.132.563.10 
    DRIDarden Restaurants, Inc.46.232.004.40 
    EOGEOG Resources, Inc.125.340.750.60 
    EXPEagle Materials Inc.63.500.400.60 
    FLOFlowers Foods, Inc.27.680.642.30 
    GCIGannett Co., Inc.19.860.804.00 
    INTCIntel Corporation20.420.904.30 
    LEGLeggett & Platt, Incorporated29.781.163.80 
    LMTLockheed Martin Corporation88.124.605.20 
    LNCOLinn Co, LLC39.272.847.70 
    MATMattel, Inc.40.521.443.50 
    MCDMcDonald's Corp.95.253.083.30 
    MDUMDU Resources Group Inc.24.250.692.90 
    OXYOccidental Petroleum Corporation83.612.162.50 
    PIIPolaris Industries, Inc.85.821.682.00 
    QSIIQuality Systems Inc.18.820.703.60 
    RAVNRaven Industries Inc.28.630.421.50 
    RGRSturm, Ruger & Co. Inc.53.671.532.90 
    SCCOSouthern Copper Corp.36.750.962.40 
    TGTTarget Corp.63.601.442.30 
    THOThor Industries Inc.37.780.721.90 
    VVCVectren Corporation33.021.424.40 
    WFCWells Fargo & Company35.821.002.80 
    WSOWatsco Inc.78.111.001.30 
    WYNNWynn Resorts Ltd.117.344.003.30 

    This portfolio has nice balance across all sectors and has an average yield of approximately 2.9%. There is a mix of small cap, slightly lower paying growth stocks and large cap steady paying companies.

    The only company that doesn't pay a dividend in the portfolio is CLR, which is the biggest oil producer in the prolific Bakken Shale play in North Dakota, and I have decided to hold onto it as a growth stock.

    I am excited to see how this new portfolio performs and will enjoy seeing all the reinvested dividends begin to work their compounding magic over the years!

    ----------------------------------------------------------------

    Update:

    I've made a few changes to the portfolio by selling AEO, CLR and QSII and adding ROST, GPC and QCOM. I liked the growth rate of ROST over AEO for retail, I was overweight oil and light on technology so I swapped CLR for QCOM and while QSII had a nice yield they haven't shown any recent growth so I decided to swap for GPC.

    Disclosure: I am long AAPL, AFL, CHD, CLX, DRI, EOG, EXP, FLO, GCI, GPC, INTC, LEG, LMT, LNCO, MAT, MCD, OXY, PII, QCOM, RAVN, RGR, ROST, SCCO, TGT, THO, VVC, WFC, WSO, WYNN.

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