My Dividend Growth Portfolio Update: 32 Holdings, 3 Buys, 1 Sale

Summary

• $797 in dividends were collected in January to start the year.
• Three purchases were made, two were new additions to the portfolio and one was added to an existing holding.  One holding was sold.
• Dividend reinvestment was turned off for some of my holdings. I'll explain further.

Introduction

Welcome to my monthly update for my dividend growth portfolio. This article series covers my investing journey as a father of two towards my eventual retirement. Any specific stocks or amounts are particular to my self-directed 401(k) plan.

The goal of my portfolio is to generate a growing income stream for me and my wife during our golden years. The aim is to live off dividends without touching the principal. Dividend growth stocks are the chosen vehicle to meet that goal. At 33, I have approximately 26 years before I can (safely) touch any of this money.

For anyone interested in seeing changes in real time, I have my portfolio and dividends tracked on Dividend Derek. I also have a trimmed version that you can freely take for yourself if you wish, found here.

I've received some questions in the past, so you can save off a copy by selecting "File" -> "Make A Copy."

What's New?

No January assessment would be complete without mentioning both the massive equity rally and the commentary coming from the Fed.

Chairman Powell continued his dovish tone at the Fed meeting in January saying that the Fed will remain "patient" with regards to interest rate hikes. For all intents and purposes, it seems like rates are frozen for the time being with the possibility of rate cuts.

Additionally, the size and scope of the balance sheet normalization has also been called into question. In fact, it was even hinted that another round of QE was possible!

Long story short, it sure seems like we are off to the races at least in the short term. While I was getting excited about lower equity prices near the tail end of December, it seems a lot of those bargains have since vanished with the strongest January in decades.

I do wonder what the Fed is seeing "below the surface" that made them call into question their plans. Has it become their modus operandi to ensure equity markets maintain their value or are there troubling data?

In any event, I feel somewhat robbed of my zeal that was starting to take hold as I was preparing for what may be turbulent waters. Those waters have been calmed for the time being. That said, I'm about a 4 on 1-10 bullish scale. I have made some beginning moves in preparing for the next downturn.

My investing framework is always under constant improvement. One of my goals this year is to move beyond analysis of a company and into broader questions around how a company may fit into my portfolio.

At a high level, I am asking another layer of questions when reviewing an investment idea. Here are some samples:

• What is the opportunity here?
• Am I excited about the business?
• What are expected returns?
• What are the risks and downside?
• How does this fit into my portfolio?
• Does it offer something materially different than an equivalent ETF?
• Would an options strategy work for it?

Target Portfolio

Dovetailing off the framework idea is figuring out what I want my target portfolio to look like. I never gave too much thought to it. I have my holdings broken down by their sector but not so much to what I really expect from them.

As a sample, I whipped up what a target may look like for me. I have decades to go so a portion allocated to growth also scratches my itch for having shares in Berkshire (BRK.A) (BRK.B) and the FANGs of the world. I'm also optimistic that at least some will be the dividend growers of the future (I'm looking at you Alphabet (GOOG) (GOOGL)).

The flip side of that coin is a desire to have some holdings that just spit out dividends. These are the high yielders that will function as the income portion of my dividend machine. Dividends will not be reinvested but will be tactically allocated to the best investment idea at the time. Consider it active compounding. It also helps me shore up my "balance sheet" by having more cash being generated alongside my regular 401(k) contributions.

The bulk of the portfolio are for traditional dividend growth companies. The current yields may vary but this is what I expect to surpass the high yielders decades down the road. Generational ideas like Apple (AAPL), Nike (NKE) or Home Depot (HD).

Actual Portfolio

I made the pie chart above before making the one below. Turns out I'm in the neighborhood of where I want to be. Growth currently sits at 18.5%. Core dividend growth is at 64.5%. Cash is high at over 6% as I have been preparing for "the real correction." High yield sits low at 9% and "former dividend growth" is 2%. That is my CVS (CVS) holding, they don't have a good home right now and are on my shortlist for removal.

The classifications are completely subjective but here is how I lumped them. One example of the subjective nature is Altria (MO) is pegged as a dividend growth stock but AT&T (T) is high yield. Their current yields are about the same but the growth rate of T's dividend is barely beating the rate of inflation, if at all.

Ticker	Classification
AAPL	Dividend Growth
ABBV	Dividend Growth
ABT	Dividend Growth
AMP	Dividend Growth
AMZN	Growth
APLE	High Yield
BRK.B	Growth
CMI	Dividend Growth
CSCO	Dividend Growth
CVS	Former Dividend Growth
DIS	Dividend Growth
FB	Growth
GLW	Dividend Growth
GOOG	Growth
HD	Dividend Growth
IQ	Growth
ITW	Dividend Growth
JNJ	Dividend Growth
JPM	Dividend Growth
KWEB	Growth
MA	Dividend Growth
MDT	Dividend Growth
MMM	Dividend Growth
MO	Dividend Growth
NKE	Dividend Growth
PRU	Dividend Growth
SBUX	Dividend Growth
SCHB	Growth
SCHD	Dividend Growth
SKT	High Yield
SQ	Growth
STAG	High Yield
SWK	Dividend Growth
T	High Yield
TROW	Dividend Growth
TRV	Dividend Growth
UTX	Dividend Growth
V	Dividend Growth
WPC	High Yield

Click to enlarge

Additionally, I've been researching higher yielding ETFs to expand my exposure into areas such as BDCs, mREITs and CEFs. I may eventually cherry-pick a few names to have as individual holdings. Right now, I'm not where I want to be with my knowledge.

2019 Goals

1. I want my dividend growth holdings to have an average dividend growth rate of at least 7%.
2. By the end of 2019, I want to have a projected dividend income of at least $7,600.
3. I want to suffer no dividend cuts.

I suspect that the dividend growth hype of 2018 will not completely carry over to 2019. Yes, profitability is still up from the tax plan but I expect increases to be a little more muted. I'm going to keep my goal at 7%.

I want to clarify the growth rate target, which has to exclude what I'm classifying as "high yield." I'm not buying a REIT with any expectation that it will grow its dividend 7% per year.

Currently the growth rate is 7.9%, it includes the increases from Abbott (ABT), AbbVie (ABBV), CVS (yes a 0% still counts) and 3M.

I calculated my target income by assuming my existing projected income ($6,450) grows by 7% organically. That would take the income to $6,900. Additionally, I am assuming that all new contributions (mine and company match) buy an initial yield of 3%. Adding $720 to $6,900 gives me about $7,600.

Lastly, no dividend cuts!

Portfolio Strategy

Buying Criteria

These are the general guidelines I will review to see if something is worthy of adding to my dividend portfolio or whether I will add to an existing position.

• Being a member of David Fish's Dividend Champion, Challenger and Contender list, obviously, a longer streak is preferred.
• Dividend yield + 5 year dividend growth rate > 8% (Chowder rule). Telecoms, REITs and utilities can get a pass due to their higher initial starting yield. Investments in these areas I want to have an additional "kicker," stocks near a 52-week low or some other way they may generate alpha over a short- to medium-term horizon. This will be highlighted as part of my thesis. The kicker may be better defined as a low-P/E stock that has not yet reverted to its mean.
• Investment grade holdings >BBB+ should generate 95% of the portfolio's dividend income.
• I want to see steady earnings growth over time; this will generally remove commodity-based companies.
• I like cash cows. Good profit margins (> 10%) are appreciated, though not required. A company with a moat should be analyzed to see how easily its moat can be disrupted.
• I like to see shareholder-friendly management. This manifests in a healthy and rising dividend and a willingness to buy back shares. Often buybacks aren't always done at opportune times. Additionally, they are frequently established to just buy back stock options for employees. A good metric to look into is the "total shareholder yield." This aggregates net dividends, buybacks and debt reduction.
• Perhaps most importantly, the valuation needs to be right per F.A.S.T. Graphs. The stock should be trading at fair value or better for an appropriate timeline (13+ years, if possible). With a longer time frame, I can see how shares fared during the Great Recession, and this also removes some of the recency bias that can come from only analyzing valuation during this extended bull market.
• I will also use Simply Safe Dividends and the information provided by Brian on his site. Among a plethora of information available, he has a dividend scorecard where companies are ranked in terms of dividend safety, growth and yield. I aim to pick companies that are in the 80+ safety range.

Selling Criteria

There are only a few reasons I'll sell a stock, though none of these events is a guarantee I'll do so.

• Dividend cut
• Company degradation - This could be things like deteriorating balance sheets, loss of competitive advantage and loss of credit ratings. These factors may come to light before a dividend cut manifests. This may also appear in a streak of less-than-expected dividend increases. The dividend increase is the more visible outward sign of a company's success. A paltry increase or two may underscore problems below the surface.
• Wild overvaluation - This becomes a bigger factor if there is something at a fair valuation that I wish to purchase with the proceeds. I will admit that several things I have sold have continued to defy financial gravity, so I am more becoming of the mind of just ignoring overvaluation if the underlying business continues to operate well. I may put in a limit order to sell, should the gravity kick in.
• I just don't want to own it. When I pull this card, I will more fully explain my reasoning. Part of the beauty of owning individual companies is choosing where I put my money. I can opt to not support companies, products, management, etc. that I do not agree with. An example of this could be companies with management issues or criminal/unethical business practices.
• Based on known information, capital is better passively invested or focused into better ideas.

Timing

One tactic I've used is buying shares prior to the ex-dividend date after the company has announced its yearly increase. The increase in amount gives a quick, "at a glance" look into how management thinks the company is operating. With a fat increase, it could be a good time to jump in. This can be confirmation that the investment thesis is indeed working well. Sometimes, the reverse can be true too - being snubbed with a "bad raise" can be a red flag that things are not as they seem and it's time to research what's up. I've done this several times already with Altria Group, Inc., Starbucks (SBUX), Corning (GLW), Prudential Financial (PRU), Home Depot, Johnson & Johnson (JNJ) and Illinois Tool Works (ITW).

Most importantly, this was not done to chase dividends but to strategically add to a position that was worthy of being added to. Trees don't grow to the sky, and neither do dividend yields. A quality company that has a nice dividend increase should see its stock price rise by a similar amount over the course of the year, readjusting to the new and higher dividend amount. By jumping the gun, you can speed up the compounding process.

If this sounds interesting to you, you should check out my weekly article, where I give the full list of these companies. I also have upcoming ex-dividend functionality on my site Custom Stock Alerts to help me keep tabs on these increases.

Dividend Reinvestment

I opted to turn off the dividend reinvestment on a few of my existing holdings during the month. I notably turned them off for AT&T and Altria and that is largely due to how much of my income comes from those two names.

Generally for income investments, let me take the cash and I'll figure out where to reinvest it. I think a lot of people have a similar sort of plan where they'd collect dividends, possibly until $1,000 and then invest them to save on fees as a percentage of the investment amount.

A lot of this stems off the market happenings at the end of 2018 and not having deployable cash without selling a stock that potentially was also down in price. I don't have any peer reviewed study to suggest what I am doing is "better." I'm trying it out for me and I'll see how it goes.

Dividend Increases

• STAG Industrial (NYSE:STAG) declares $0.119167/share monthly dividend, 0.8% increase from prior dividend of $0.118333.
• Abbott Laboratories declares $0.32/share quarterly dividend, 14.3% increase from prior dividend of $0.28.
• AbbVie had declared $1.07/share quarterly dividend, 11.5% increase from prior dividend of $0.96.

Dividend Cuts

• None!

The Portfolio

Name	Ticker	Percent of Portfolio	CCC Status	S&P Credit Rating
Apple	AAPL	3.96%	Challenger	AA+
AbbVie	ABBV	1.39%	Challenger	A-
Abbott Laboratories	ABT	2.79%	Challenger	A+
Ameriprise Financial	AMP	2.59%	Challenger	A
Apple Hospitality	APLE	0.56%	None
Cummins	CMI	1.83%	Contender	A+
Cisco Systems	CSCO	2.17%	Challenger	AA-
CVS Health	CVS	1.81%	Contender	BBB
Walt Disney	DIS	3.04%	Challenger	A
Corning	GLW	3.34%	Contender	BBB+
Home Depot	HD	2.36%	Challenger	A
Illinois Tool Works	ITW	3.01%	Champion	A+
Johnson & Johnson	JNJ	2.80%	Champion	AAA
JPMorgan Chase	JPM	2.98%	Challenger	A-
Mastercard	MA	2.64%	Challenger	A
Medtronic	MDT	2.09%	Champion	A
3M	MMM	1.42%	Champion	AA-
Altria	MO	3.31%	Champion	BBB
Nike	NKE	2.08%	Contender	AA-
Prudential Financial	PRU	2.53%	Challenger	A
Starbucks	SBUX	3.38%	Challenger	BBB+
Schwab US Broad Market ETF	SCHB	2.33%
Schwab US Dividend ETF	SCHD	3.54%
Tanger Factory Outlet	SKT	1.65%	Contender	BBB+
STAG Industrial	STAG	1.48%	Challenger	N/R
Stanley Black & Decker	SWK	2.60%	Champion	A
AT&T	T	3.41%	Champion	BBB+
T. Rowe Price	TROW	1.40%	Champion	A+
Travelers Companies	TRV	2.55%	Contender	A
United Technologies Corporation	UTX	1.92%	Contender	A-
Visa	V	2.75%	Contender	A+
W.P. Carey	WPC	1.86%	Contender	BBB

Click to enlarge

Here are the values behind the "CCC Status" category:

• King: 50+ years
• Champion/Aristocrat: 25+ years
• Contender: 10-24 years
• Challenger: 5+ years

Performance

Ticker	Owned Since	Versus S&P	Benchmark	Versus Benchmark
AAPL	4/13/2015	5.86%	SPY	5.86%
ABBV	1/28/2019	-0.12%	SPY	-0.12%
ABT	12/6/2016	70.80%	SPY	70.80%
AMP	9/29/2016	3.72%	SPY	3.72%
APLE	1/28/2019	0.33%	VNQ	1.45%
CMI	10/30/2015	18.43%	SPY	18.43%
CSCO	4/6/2016	45.44%	SPY	45.44%
CVS	10/7/2016	-51.28%	SPY	-51.28%
DIS	12/28/2015	-31.90%	SPY	-31.90%
GLW	10/14/2015	66.45%	SPY	66.45%
HD	5/3/2016	7.15%	SPY	7.15%
ITW	8/24/2018	7.07%	SPY	7.07%
JNJ	12/9/2015	-0.60%	SPY	-0.60%
JPM	7/15/2016	39.04%	SPY	39.04%
MA	7/26/2018	7.23%	SPY	7.23%
MDT	11/22/2016	-3.28%	SPY	-3.28%
MMM	5/24/2018	0.60%	SPY	0.60%
MO	10/31/2013	-8.07%	SPY	-8.07%
NKE	5/3/2016	4.05%	SPY	4.05%
PRU	4/7/2016	2.94%	SPY	2.94%
SBUX	12/3/2015	-19.00%	SPY	-19.00%
SCHB	9/24/2018	-0.44%	SPY	-0.44%
SCHD	9/24/2018	0.81%	SPY	0.81%
SKT	7/26/2017	-21.35%	VNQ	-13.68%
STAG	5/20/2016	17.56%	VNQ	43.05%
SWK	1/28/2016	-5.64%	SPY	-5.64%
T	11/3/2015	-33.59%	SPY	-33.59%
TROW	9/29/2016	19.98%	SPY	19.98%
TRV	4/28/2014	-4.13%	SPY	-4.13%
UTX	1/28/2016	-4.00%	SPY	-4.00%
V	7/26/2018	2.99%	SPY	2.99%
WPC	5/15/2017	17.98%	VNQ	24.96%

Click to enlarge

This table is how shares have performed since I first purchased them. I am able to compare versus both the S&P and another benchmark for each holding. It's supported by the stock return calculator (there is also API access available) that I built.

Versus S&P: This is a measure of the alpha generated (or not) versus the S&P 500 as a benchmark. This is calculated using the stock return calculator here, and it uses the "Owned Since" column as the starting date. This may not reflect actual results, as multiple purchases would change the figure. I can also set the benchmark at the individual ticker level.

The next column allows flexibility to define what my benchmark can be. For example, look at the REITs - I've set their benchmark to be VNQ for an apples-to-apples comparison. A utility could be compared to XLU for example.

In past editions, I highlighted just how quick these results can change. My former holding of Ventas went from a major laggard of both VNQ and the S&P to beating both of them within a few months. I managed to also sell my shares at the top.

My Buys

Apple

I picked up another block of shares of Apple on January 3rd which was the day the stock fell about 10% to its new 52 week low of about $143. I had been sitting patiently on my Apple shares for some time waiting to add. Revenue did ultimately drop year over year but it seems as though the move was vastly overblown. Shares have rocketed back over $30/share since that point.

Apple Hospitality

This one has been on my radar for a little bit of time. I needed more REIT exposure and it seems like a stable business model. This was also the first new holding I ran through the framework.

Apple Hospitality is a hotel REIT with lots of popular brands like Hilton and Marriott operating in their facilities. At the time of purchase shares were sporting over a 7.6% yield.

Since the IPO, FFO has not grown in any material way. It should be no surprise that shares are not firing on all cylinders and have steadily dropped from their $18 IPO price. This is an example of where I want the dividends in hand and I'll choose when to buy more shares. Yes, I missed the bottom in December but the company seems stable and any mean reversion could offer a nice capital gain bump. I want to highlight this was not bought as a dividend growth investment but as a high yielder, the dividend has been frozen since the IPO.

What made Apple Hospitality a little different than just being a REIT or high yielding ETF was the low correlation it had to a passive investment vehicle. SRET is probably the closest comp, it's a high yield REIT ETF that also sports a very similar yield. I'll probably pick up some shares of that one down the road.

I only picked up 100 shares to start and will let it run for some time before adding considering adding more.

AbbVie

AbbVie is the drug manufacturer that was spun off from Abbott Labs back in 2013. As an Abbott shareholder, I've always been interested in getting the band back together.

I won't pretend to be a master at the pharmaceutical game but they have been nailed lately due to concerns about Humira's patent expiry across Europe and how that will quickly decelerate sales. In any event, they have a strong drug pipeline and I got shares at an eye-popping 5.5% yield. The valuation numbers seem quite compelling on the Fast Graph but again, this is a forward-looking story where there are some unknowns.

In the past, I got hamstrung by similar pharmaceutical stories but the difference with this one is having a much stronger yield while waiting for things to sort themselves out.

This company has been a fan favorite due to its legacy of being part of Abbott for so many decades that it only seemed right to finally dip a toe and buy some shares of this one.

Sells

Aflac

I'll preface by saying there's nothing wrong with Aflac. I mentioned wanting to have some dry powder and that made me review several holdings in my portfolio. Aflac came up for a few reasons.

• Low dividend yield
• Low earnings growth expected
• Shares appeared to be fully valued if not moderately overvalued

You may say - how can they be overvalued at 12x earnings? Well because the market has given them a very long leash for deserving more and they haven't been delivering consistent strong returns.

I set a limit sell order at $47 which ultimately triggered, locking in a 63% total return (14.9% annualized).

I will add that my sell decision was confirmed after seeing the paltry dividend increase just announced (3.8%). Low yield with low growth is not what I'd be looking for. If this jumped back over 3% yield I'd take a second look, or around $40 sometime in 2019.

Charts and Graphs

Dividends

The green bars are 2018 and you can see that my December did drop off compared to both 2016 and 2017.

Notes

• January started with a bang and a lot of that is due to the distributions from the KraneShares China Internet ETF (KWEB). Technically, $251 was a long-term capital gain distribution and the other $3 was the actual "dividend." This is why I included the asterisk in the headline. That amount though is about a 2.6% yield which seems quite reasonable and repeatable each year.
• Dividends from Altria were over $154 which included my most recent purchase.

Here's the table of who paid me during the month.

Dividends By Position Size

The bubble graph maps expected dividends by the percentage in my portfolio. The third data point, yield on cost, is represented by the size of the bubble.

MO and T are still massive outliers with just how much of my income they provide. The large bubble size also indicates they have a high "yield on cost." New holding Apple Hospitality appears on the left hand side. It's a small allocation and doesn't provide a lot of income yet, but the yield is high. This is the section I'm looking to bulk up.

Growth

There's not much to show yet with only one month in other than the 79% income growth over January 2018!

This is my forward-looking 12-month dividend view (take all known dividends for all shares and sum them up). I'm a hair behind where I was at the beginning of last year but I added 4% in the past month.

My goal is to grow that $6,717 figure over $7,600 by the end of this year.

Visualizations

Income By Sector

At the moment, the pie chart looks extremely balanced across almost all sectors. As a teaser for my February update, Energy will finally gain a piece of the pie. I'm struggling to gain utility exposure at what I feel is the right price and yield combination.

Sector Allocations

When looking at how I actually put my money into each sector, it shouldn't be too much of a surprise that tech is leading. From my own comfort and career path, tech is my natural go to. Additionally, this includes all of my growth stocks (think the FANGs).

Champion, Contender, Challenger View

I added a challenger with AbbVie, a "none" with Apple Hospitality and lost a champion by selling Aflac. Fun fact - AbbVie is still a Dividend Aristocrat due to grandfathering rules from when it spun off from Abbott.

Things Coming Up

I like to run this screener to get some idea generation going again this month, in case it helps anyone out. Here are the filters I start with:

• $10 billion+ in size
• US companies
• Positive dividend yield
• Forward P/E under 20
• Sorted by their 52-week lows

Here are the upcoming dividend increase announcements I'm waiting for in February.

• CSCO
• GLW
• HD
• PRU
• TROW

As I finished writing this, Corning announced a sweet 11.8% increase!

Conclusion

I received nearly $800 in dividends to start off 2019! That number was also nearly 80% higher than last January. I've begun adding a few higher-yielding names to my portfolio to boost myself closer to a targeted allocation. After the head fake in December was quickly countered with a rally in January, I'm still not completely sold that this is going to be a runaway year for equities.

I opted to turn off my dividend reinvestment for some of my holdings, especially in the higher yield area to give myself a better constant cash flow for when opportunities present themselves.

Let me know what your thoughts are! How bullish are you feeling?

Analyst’s Disclosure: I am/we are long AAPL, ABBV, ABT, AMP, AMZN, APLE, BRK.B, CMI, CSCO, CVS, DIS, FB, GLW, GOOG, HD, IQ, ITW, JNJ, JPM, KWEB, MA, MDT, MMM, MO, NKE, PRU, SBUX, SCHB, SCHD, SKT, SQ, STAG, SWK, T, TROW, TRV, UTX, V, WPC. 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.

Comments

[Simon Vargas]

I've followed you for a couple of years now. You're one the best authors on Seeking Alpha. You have a way of writing where it is not over explained or made more complicated than what it really is. I appreciate you showing off your portfolio to us publicly, few do. I've done my best over the last couple of years of taking your approach and becoming a dividend investor while not shying away from growth opportunities when they make sense. It has worked out well for me up to this point and I owe a majority of that praise to you. You may not know it but each article you post helps someone, even if they do not reach out directly to say it. Thank you Derek.

[Dividend Derek]

Wow @Simon Vargas that blew me away. Firstly thank you so much for your kind words. Especially since that was only your second comment ever. I deliberately write to be down to earth and hopefully to provide good information. I'm very glad you've done well and helping others was the driving factor behind writing in the first place. Again, thank you.

[Gwhitebeard]

Good work Derek, initial impression of your portfolio was that I was looking at the holdings of a positively rated mutual fund. Only comment I have would be to add a couple CEF's for additional divy juice. Your risk is spread sufficiently to absorb potential NAV underperform to gain monthly income. More retail investors should make the effort you have, especially at your current stage in life.

[SMmonk]

Thanks Derek,

I fail to see what percentage of the portfolio is allocated to AMZN.
Also, any interest in gold?

[Dividend Derek]

Hey @SMmonk about 2.5% to Amazon and zero interest in gold.

[Uain53]

A very informative article Derek,

I appreciate that you show the credit ratings of you holdings.
This is a key metric for those considering new positions for the long term.
Especially in this time of ... er... fluid interest rate policy.

[Dividend Derek]

Ha yes, it's been an interesting ride with the Fed.

[QQQBall]

Thanks for the write-up

[Dividend Derek]

Sure thing

[tcarter1523]

Why haven’t you picked up Ford this year.

[Dividend Derek]

@tcarter1523 It does have a fat dividend I'll agree with you, I am hesitant on the auto industry in general with how competitive it is with incredible constant capex. I was going to say I'm a GM guy anyway and come to think of it that's all I've owned. Saturn, Camaro, Corvette, Equinox and Acadia.

[rupeshparab15]

Hi Derek, thanks for the informative article. Can you please tell me the brokerage account you use? Robinhood is free but

[Dividend Derek]

@rupeshparab15 This is in my 401k account that my company administers through. I do have a Robinhood account but it's more of just some play money, I use Schwab as my "big boy" taxable account.

[keltus 1952]

Good article. Also added you to my follow list. Am also holding SCHD long term and a few of your issues. I am a greater user of ETFs for the instant diversification they provide. SPYD provides a 4%+ yield, low fees, and a good mix heavy in utes and REITs if you can tolerate those. Individual issues ......CSCO, LOW, CAG, EPD, ET...........................Kel

[Dividend Derek]

Awesome thanks for following @keltus 1952 - ETFs are great and I completely agree about the instant diversification. I'm trying to get better about comparing any new possible holding to what can be achieved passively.

[IamN]

whats your say if I add apple at $174 ? since I am late to the party ?

[Dividend Derek]

@Nurali Thanawala I still think Apple is a generational investment, they have an incredible brand and products with a growing service segment that delivers phenomenal profits. I don't want to speculate on the short term price movements but long term it's one of my favorites.

[IamN]

@Dividend Derek I think you are right the long term picture looks good to me too. I shall close my eyes and buy some apples.

Thank you !

[IamN]

@Dividend Derek One more question whats your say about defense companies ? RTN LMT NOC ?

[Quadrophenia]

How do you calculate your portfolio DGR? I know how to do the math but don't know how to take into account changes in my holdings. Are you ignoring your changes and just looking at your annual total dividends?

[Dividend Derek]

Hey @Quadrophenia I'm taking a flat average across the increases (or 0 in the case of CVS barring a surprise increase this year), I keep them in their own column. It gives a finger in the wind measurement, it's not perfect and could be improved upon.

It could be weighted by position size, I am much closer to an equal weight portfolio than cap weighted so I'm not too concerned with that part of it. Also if I drop CVS does that improve my rate? Right now it would in my calculations. It's subjective and I think that's OK to give a close enough approximately to what the "organic" dividend growth rate is at a portfolio level.

[DougWalker]

Good solid article. My portfolio looks a lot like yours in stocks, but I am a little heavier in CEF’ s for medical stocks, bonds and convertible preferred stocks. Plan some pairing in near future. May Be I am early but feel like 2006 to 2008. We are in Sercuities, manufacturing and operating real estate warehouse and offices, but are considering some asset sales, with such a total market instability. Again thank you for your hard work. PS will,look at out AFL holding again.

[Dividend Derek]

@DougWalker I'll take a stab that you are either in or very close to retirement? I'm starting to look at CEFs and some preferreds to spice up my high yield portion of my portfolio. I'm with you on the instability which is part of the reason I turned off reinvestments so I can always have some dry powder accumulating.

[WPG Value Investor]

Thank you for a great article and review. I like your thought process and how you track each stock. The addition of what your screen choices are helps. I will use the one shown. I wish I had this type of information available 20 + years ago when I was near your age. :) fortunate for you is the information and tools of the Internet. I’ve been following you for some time. I’ve just forwarded this article to friends of mine and suggested they follow you as well.

Your success is due to your plan. You understand what you want and look for it and track it. As Buffett said you need a plan and stick to it. My favourite still Rule 1 - don’t loose money Rule 2 - don’t forget rule 1.

ETF s have you looked at Vanguard ETF both the S&P 500 and Total US Market. John Bogle (RIP) did such a great ETF company and it still has great returns.

As for stocks have you looked at Brookfield infrastructure BIP. And the Brookfield family. Great management.

Thanks again for a great article. All the best on your plans and future.

[Dividend Derek]

@WPG Value Investor Wow thanks WPG for both enjoying it and sharing it with others! Always keep those rules in mind, should get that printed on a t-shirt.

Yes I absolutely have used Vanguards great products in the past and present. He did a wonderful service for all investors with the amount of wealth that has been kept in our collective pockets.

I have my eye on the Brookfield properties, funny you mention that. On my list for some more research.

[RoseNose]

You continue to have an excellent portfolio and offer a wonderful article. I like the purchase of APLE, good one to pick in the hotel eREIT arena.
My last article does show some S&P credit ratings you might want to update for your next article. T is now rated BBB and V and MA were up-rated along with a few others.
Here's a link to my last article :https://isn.page.link/URkP.
Congrats on all the raises, and Happy 2019 :)) Rose

[Dividend Derek]

@RoseNose Thanks Rose I'll check them out, I need to get those pesky credit ratings automatically updated so I don't have to wait til someone points out I'm wrong :-).

I need to get to your article, I have it open in another tab and need to actually sit and read through it! I know you always have a treasure trove of good information for investors.

[RoseNose]

You are welcome Derek and I say THANKS :)) to you for your excellent work !

[bobofran3726]

Dividend growth for AAPL is around 11% for 5 years and around 16% this past year. Nice DG for any stock. With their cash hoard, I'm hoping they stay with the 16%, or maybe even higher, when they raise it again next quarter. They have plenty of room to move being that their payout ratio is 24%.

[Dividend Derek]

@bobofran3726 That is why I think they are a generational DG stock. A lot of levers to pull for a very long time.

[eltoro]

Well done. I like a plan. You use a logical system of complementary metrics and screens. Too many over analyze.

[Dividend Derek]

Thanks @eltoro

[dandroidz]

Nice job! Just added you as a follow. I'm becoming a fan of the Div growth stories.
Thanks for the insight.

ABBV is on my radar.
I'm surprised you dont own any JNJ , a champion! I picked up some this past Spring when it dipped to $121-123

[Basti1993]

He owns J&J. 2.8% of the portfolio.

[Dividend Derek]

@dandroidz Not own JNJ? Oh I most certainly do! Search on the page, it's there :-)

[dandroidz]

@Dividend Derek My mistake, I was reading the article from my phone and must have glanced over it. I was astonished if you didnt own such a quality holding!

[whiff]

Thanks for an informative article - like your approach - sold my AFL as well - glad to see someone with the same misgivings I had about selling - I try not to spend much time looking back ...

[Dividend Derek]

@whiff I'll assume you made a nice return on it too! When Mr. Market offers you a great deal, you should be willing to take it from time to time. The combination of high price, no earnings growth, minimal yield while waiting and ultimately a paltry increase were enough for me. I think if it were yielding 4-5% that may have changed the story but there's too many other opportunities willing to pay me more.