My Dividend Growth Portfolio April Update: 42 Holdings, 6 Buys, 5 New Holdings And 1 Called Away

by: Dividend Derek

I collected $501 in dividends during April and $2,529 YTD (up 13.5% YoY).

I added 5 new positions (2 that are pretty hated right now). I also added to an existing position.

My Cisco covered call was exercised and I reevaluate my Starbucks covered call.


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 401K 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."

Change Log

I introduced a change log as a quick reference to highlight relevant non-data changes. Things like dividends collected, dividend increases and charts will all change each month regardless.

  • Moved "Target Portfolio" lower in the article
  • Added a "Portfolio Yield" section


As has been the trend in 2019, indices rose higher and higher during April. New all-time highs were even reached by the beginning of May which also means personal portfolio value highs.

I closed out April with a balance of $320,740 which was up $13,000 from the end of March.

I spent time this month pondering more about my sell strategy. I really want to get to a point where I don't sell and obviously there are numerous reasons why. First being that there is evidence that just buy and hold works the best rather than any timing. Shouldn't necessarily be a surprise, but it's also difficult to find new opportunities with limited cash flow.

Ideally, what I want to get to is a point where I have $3,000+ per month in both dividends and retirement contributions so I can make at least one decent purchase per month without having to sell. I can let everything ride from that point on.

If I do plan to sell, trim, write a covered call, I want to have a more defined level of "overvalued" that I can point to. That is secondary to where I'd like to be, though. I have my own examples in my portfolio where market timing worked and did not work.

What I've been finding the past few months is most of my "traditional" dividend growth stocks are nowhere near my target price range and I've been buying other beaten down names. Not to pick on them, but when Apple (NASDAQ:AAPL) is up about 50% since the start of the year, that's not a very compelling buy (yes, I bought when it hit $142).

The Q1 earnings season has been better than anticipated and the expected "earnings recession" has so far not materialized. Sure, there have been a few outliers like 3M's 13% haircut on a mega miss, but by and large earnings have been received well. With the Fed standing pat on interest rate policy, there doesn't seem to be much stopping the market from making new highs.

2019 Goals

  1. I want my dividend growth holdings to have an average dividend growth rate of at least 7%. (Currently 9.7%)
  2. By the end of 2019, I want to have a projected dividend income of at least $9,000 (was $7,900). Changed in February. Accomplished in April.
  3. I want to suffer 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'm currently massively violating this rule, Altria (NYSE:MO) and AT&T (NYSE:T) alone make up 14% of my income.
  • Review my investing framework questions:
    • 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?
    • Can I sell a cash secured put to lock in a stock at a particular price I want?
  • 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, tailing a stock upwards until financial gravity kicks in.
    • I may write an out-of-the-money covered call.
  • 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.


One tactic I've used is buying shares prior to the ex-dividend date after the company has announced its yearly increase (this also works for ETFs). The increase in amount gives a quick, "at a glance" look into how management thinks the company is operating. A large increase can be confirmation from management that the business is running quite 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 front-run a dividend increase several times already with Altria Group, Starbucks (SBUX), Corning (GLW), Prudential Financial (PRU), Home Depot (NYSE:HD), 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.

Dividend Reinvestment

Reinvestment is off for all of my holdings except for Visa (NYSE:V), Mastercard (NYSE:MA), the Schwab U.S. Dividend Equity ETF (SCHD) and recently CVS (NYSE:CVS).

Other than that, I am of the mindset that I'll take the cash and figure out where to deploy it. This is especially useful if I go below my 5% cash target. The cash machine portion of my portfolio can throw off cash to restore my balances.

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.

At the end of 2018 when the market was rapidly unwinding, I did not have enough deployable cash. Rather than ignoring what happened, I learned the lesson that I was quite unhappy not being able to take advantage as much as I would have wanted. My only option at the time was to sell existing holdings at non-optimal prices with most of my portfolio near 52-week lows. 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

Dividend Cuts

  • Annaly Capital Management (NYSE:NLY) - more detail will follow in the "Buy" section

The Portfolio

Name Ticker Percent of Portfolio CCC Status S&P Credit Rating
Apple (AAPL) 4.25% Challenger AA+
AbbVie (ABBV) 1.23% Challenger A-
Abbott Laboratories (ABT) 1.34% Challenger A+
Ameriprise Financial (AMP) 2.70% Challenger A
Apple Hospitality (APLE) 0.51% None
Cummins (CMI) 1.83% Contender A+
Cisco Systems (CSCO) 0.53% Challenger AA-
CVS Health (CVS) 1.94% None BBB
Walt Disney (DIS) 3.25% Challenger A
Global X MSCI SuperDividend (EFAS) 1.00% Challenger A
Corning (GLW) 2.82% Contender BBB+
Home Depot (HD) 2.30% Challenger A
Iron Mountain (IRM) 0.99% Challenger BB-
Illinois Tool Works (ITW) 3.04% Champion A+
Johnson & Johnson (JNJ) 2.66% Champion AAA
JPMorgan Chase (JPM) 2.97% Challenger A-
Kraft Heinz Company (KHC) 1.01% Challenger BBB
Mastercard (MA) 2.71% Challenger A+
Medtronic (MDT) 1.90% Champion A
Global X MLP ETF (MLPA) 0.81%
3M (MMM) 1.17% Champion AA-
Altria (MO) 3.22% Champion BBB
Nike (NKE) 0.82% Contender AA-
Annaly Capital Management (NLY) 0.61%
Invesco CEF Income ETF (PCEF) 0.70%
Prudential Financial (PRU) 2.48% Challenger A
Starbucks (SBUX) 2.77% Challenger BBB+
Schwab US Dividend ETF (SCHD) 3.40%
Global X SuperDividend Emerging (SDEM) 0.86%
Global X SuperDividend ETF (SDIV) 1.66%
Tanger Factory Outlet (SKT) 1.78% Contender BBB
Simon Property Group (SPG) 1.67% Contender A
Global X SuperDividend REIT (SRET) 0.95%
STAG Industrial (STAG) 1.40% Challenger N/R
Stanley Black & Decker (SWK) 2.72% Champion A
AT&T (T) 3.16% Champion BBB
T. Rowe Price (TROW) 1.39% Champion A+
Travelers Companies (TRV) 2.58% Contender A
United Technologies Corporation (UTX) 2.00% Contender A-
Visa (V) 2.78% Contender AA-
Walgreens (WBA) 1.68% Champion BBB
W.P. Carey (WPC) 0.87% Contender BBB

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

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


Ticker Owned Since Versus S&P Benchmark Versus Benchmark
AAPL 4/13/2015 26.85% SPY 26.85%
ABBV 1/28/2019 -7.49% SPY -7.49%
ABT 12/6/2016 77.26% SPY 77.26%
AMP 9/29/2016 17.84% SPY 17.84%
APLE 1/28/2019 -3.70% VNQ -0.22%
CMI 10/30/2015 27.57% SPY 27.57%
CSCO 4/6/2016 68.78% SPY 68.78%
CVS 10/7/2016 -70.84% SPY -70.84%
DIS 12/28/2015 -18.39% SPY -18.39%
EFAS 2/20/2019 -4.92% SPY -4.92%
GLW 10/14/2015 49.56% SPY 49.56%
HD 5/3/2016 8.10% SPY 8.10%
IRM 4/25/2019 -2.03% VNQ -2.95%
ITW 8/24/2018 13.39% SPY 13.39%
JNJ 12/9/2015 -0.80% SPY -0.80%
JPM 7/15/2016 49.43% SPY 49.43%
KHC 4/10/2019 -1.19% SPY -1.19%
MA 7/26/2018 15.96% SPY 15.96%
MDT 11/22/2016 -11.95% SPY -11.95%
MLPA 2/6/2019 -6.73% SPY -6.73%
MMM 5/24/2018 -13.81% SPY -13.81%
MO 10/31/2013 -3.07% SPY -3.07%
NKE 5/3/2016 -0.41% SPY -0.41%
NLY 4/3/2019 -1.78% REM -0.70%
PCEF 2/15/2019 -1.34% SPY -1.34%
PRU 4/7/2016 13.47% SPY 13.47%
SBUX 12/3/2015 -13.74% SPY -13.74%
SCHD 9/24/2018 0.48% SPY 0.48%
SDEM 2/20/2019 -7.12% SPY -7.12%
SDIV 2/20/2019 -9.97% SPY -9.97%
SKT 7/26/2017 -46.50% VNQ -35.90%
SPG 4/30/2019 3.08% VNQ 1.22%
SRET 2/20/2019 -2.16% SPY -2.16%
STAG 5/20/2016 19.10% VNQ 49.03%
SWK 1/28/2016 7.20% SPY 7.20%
T 11/3/2015 -37.76% SPY -37.76%
TROW 9/29/2016 30.57% SPY 30.57%
TRV 4/28/2014 6.55% SPY 6.55%
UTX 1/28/2016 12.54% SPY 12.54%
V 7/26/2018 10.31% SPY 10.31%
WBA 4/9/2019 -3.07% SPY -3.07%
WPC 5/15/2017 19.46% VNQ 29.42%

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. 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 for use in spreadsheets) that I built.

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. I need to flesh out what high yield ETF I want to be the benchmark for my high yielding ETFs.

In past editions, I highlighted just how quick these results can change. My former holding of Ventas (NYSE:VTR) 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. ABT was one of the hottest stocks I owned and around the time I trimmed it, it was beating the S&P by 82% (down a little to 77% now).

Portfolio Yield

This is a newer section that I'm trying to calculate a few portfolio aggregate stats for. I had noticed through some of my previous analysis that my portfolio yield was not too much better than the S&P. I cooked up a few different metrics to compare.

Projected Income $ 9,083.72
Cash Ratio 4.32%
Total Value $319,755.86
YOC (Divi Companies) 4.63%
Yield (Divi Companies) 3.40%
Yield Ex-Cash 2.96%
Yield w/Cash Drag 2.84%

Projected Income - the sum of all known dividends for all holdings

Cash Ratio - percentage of cash in the portfolio

Total Value - self explanatory

For these next batch, the numerator in each calculation is my "forward looking income" of $9,083.

YOC (Divi Companies) = "forward looking income" / ("sum of invested capital" - (cash + cost of all non-dividend paying companies)). This is the my yield based on what I put in, this is separate from current market valuations.

Yield (Divi Companies) = "forward looking income" / ("Portfolio Value" - (cash + value of all non-dividend paying companies)). Said another way, this is the yield from all my dividend paying companies.

Yield Ex-Cash = "forward looking income" / ("Portfolio Value" - Cash). This is the yield based on all my invested money and their respective prices today.

Yield w/Cash Drag = "forward looking income" / ("Portfolio Value"). All in, this is the yield given my expected income divided by the full portfolio value.

My Sells

None directly (see options)

My Buys

Annaly Capital Management

I picked up 200 shares of Annaly when it crossed over 12% yield per my alerting system at Custom Stock Alerts. This was my first foray into an mREIT and I just started by dipping my toes in.

Does this mean it's a perfect buy signal? Of course not, but it was the predefined level that I was eyeing up to have this be materially different from something like REM and taking the basket approach.

You can see on the Fast Graph that both EPS and the dividend amount have been very close to one another for some time now. In fact, the math suggests they are paying out virtually 100% of earnings (P/E of 8.1 x 12.23% = 99% payout ratio).

Funnily enough, Annaly already cut their dividend going forward. This actually doesn't bother me for a few reasons.

  • It's less than 1% of my portfolio by design plus this was a "starter position" to reevaluate at a later time.
  • These pass-through companies have to pay 90% of their taxable income so I'm OK with them essentially paying whatever they make.
  • The yield (even post cut) is much higher than REM which is the closest ETF alternative.

So where does that leave me? Just letting it ride, I trust management to be prudent and they will pay what they can. If the stock slides to reapply a 12% yield, so be it. That may be a time to double down on a full position and wait for conditions to turn.


The retail pharmacy segment has been getting slaughtered for the past year, most notably with CVS. Walgreens recently joined the pain party after plummeting on earnings. Revenues were up 4.6% but guidance remained at zero growth expected this year. I think this is actually OK given where the stock trades. A P/E under 10, especially in this market, highlights the uncertainty surrounding the industry. There are the constant threats; whether regulatory or from of Amazon (NASDAQ:AMZN).

The dividend is very well covered with shares sporting a payout ratio around 30%. Simply Safe Dividends pegs Walgreens with an 81 safety score. In fact, Walgreens is above average in all three categories, a rare feat.

The next dividend hike should be announced near the end of June. 2018 was a very nice 10% increase, but I'm preparing for a lower increase given some of the growth headaches. For a Dividend Champion to be given this valuation, it feels like a steal and in a few years may look like a very prudent purchase. Getting a 3%+ yield coupled with a low payout ratio is a sweet bonus.

Kraft Heinz

This is another new position for me this month. A few years ago, the Kraft-Heinz merger was touted as being a brilliant move for Berkshire (NYSE:BRK.A) (NYSE:BRK.B) and 3G Capital. Zero-based budgeting was all the craze and the stock saw some fantastic growth the first few years. This had been on my watchlist, but I wanted to let them get some time under their belt first. Earnings were rapidly changing as they completed the merger and I had always thought the stock was very expensive.

That all changed a little over two months ago during the quarterly report that featured the trifecta of pain; SEC investigation, dividend cut, major write-down (and a 30% haircut that day).

That's where investing is about your perspective - for existing shareholders this was a terrible day to be a holder. For a guy that was not a holder, it started looking interested. I put KHC back on my watchlist and wanted to see how the story progressed. With zero movement in the stock, I decided to buy 100 shares and let it ride.

Part of the rationale is the dirt cheap valuation coupled with a 5% yield after shares synchronized to the new dividend rate. Like Walgreens, this is a flat out hated stock and for good reason. Part of the narrative I painted for myself was that there is an implicit "Buffett put" on the company. Warren will bail this out and take it private if need be, especially with how much cash he has on hand. I think if they can continue to pay this new dividend and right the ship, this is another one that has the chance to rebound sharply with a higher multiple. With a P/E of 10 and 50% payout ratio, the bar seems pretty low for success.

Iron Mountain

I have to admit that Iron Mountain has been on my watchlist for some time also. I wasn't ready to buy the last time shares represented a great opportunity. I do defer much of my REIT research to Brad Thomas and his expertise. Not surprisingly, the day after I bought, Brad/Dividend Sensei came out with a bullish article on IRM.

The company is just cool, I mean they own their own mountain! Anyway, shares have at times traded for a decent premium in the 13-16 P/AFFO range.

I set an alert for myself previously to let me know when it hit a 7.25% yield. It managed to do so during my Disney trip and yes, I did hop on to buy shares on the bus ride over to the Magic Kingdom.

I started with 100 shares, I'm willing to double that, but I'll see if shares cross above 8% yield. At the time of writing, they are about 7.75%

Global X SuperDividend ETF

SDIV is a recent add to the portfolio along with a few other high dividend yield related ETFs from sponsor Global X. My use of them is for high income to generate money for more future purchases.

I was down a few percent from my initial purchase, the next monthly ex-dividend was coming up plus the listed yield hopped above 9% (I had an alert set for this too).

If they are able to consistently deliver 9% cash returns, then this will become a key component of my portfolio.

I'm aware some will be turned off by an expense ratio of 0.58%, but it does offer a basket of 119 high yielding companies across the globe.

Simon Property Group

The last new addition this month is the juggernaut in class A malls, Simon Property Group. This is another REIT that has been on my watchlist but always seems expensive. The YChart doesn't even capture the yield exactly right, the $2.05 quarterly dividend becomes $8.20 for the year. That gives a yield at $170/sh of about 4.8%. Compare that to the chart below and it becomes about the highest yield seen since the recession.

I bought this the morning of the earnings release which had some good features to it. FFO rose 7% Y/Y and full guidance was reiterated for $12.30-$12.40. Using the midpoint of $12.35, buying shares at $170 gives shares a P/FFO of 13.7 for the full year.

What is also easy to forget is the credit quality of this titan is an A from S&P. It's uncommon to have a strong credit rating of a REIT.


Last month I wrote about my foray into covered calls. My Cisco shares ended up being called away from me. Again, at the time I wrote the call, I did not see just how much this stock would rise. It's not the end of the world, the $5,000 received during the trade pushed my cost basis negative (much like my Abbott Laboratories' shares.

Said another way, I'm playing with house money at this point with Cisco. I do think shares are quite a bit overheated, though.

On my other trade, Starbucks, I ended up covering my call by buying a call to close mine out. I got some great info from Option Generator and he helped me out with some options. I wrote about it at length here, but I'll give the brief run down.

From options terminology, I did a "roll out and up". I bought back my $72.50 April call and took a loss on that (since shares had risen so much). I then wrote another covered call for May (this is the roll out) knowing that Q1 earnings were going to be after the first call but before the May call expiration date.

The "...and up" means that I selected a higher strike price, this time $77.50 and received a premium for that.

Here's a summary of the math involved:

  • Bought a call to close at $3.65. This put me back at “neutral”, and closed my earlier covered call that I wrote.
  • I wrote another covered call, this time for May 17th (this also comes after Starbucks reports their Q1 earnings, so if the report doesn’t wow, I expect shares to fall after this run-up).
  • Jumped up two notches on the options chain, from $72.50 up to $77.50.
  • Collected $1.35 per share in premium which gives me a target price of $78.85.
  • If the option is exercised, that’s $7,885 versus my original target price of $7,377 (see above).
  • I received $2.62 per share in premium income and lost $3.65 to buying back my option for a net loss of $1.03. This excludes transaction costs for simplicity.
  • What I gained is the right to sell the shares for an additional $500 in total. That leaves my net at $398 ($500 - $103) upside in this scenario.

To toss this story on its head even more, at the end of April, I bought back my call once more. I decided for the time being that I'd rather just hang on to my shares than worrying about timing and when to get back in. This dovetails back to my commentary above that I'm trying to just let things ride. I certainly won't add here, but it's a solid hold and there's nothing wrong with the company. It is after all, one of my generational investments. I'd be more comfortable gambling with 100 shares if I already held maybe 10x that amount and was willing to part with a small stake to lower my cost basis.

Charts and Graphs


The purple bars represent 2019 and April was an improvement over 2018, though it wasn't as good as Q1. That's OK - don't get bent out of shape over one month, watch the longer trends either quarterly or yearly.


  • Right off the bat, I got $93 from my ETF suite (EFAS, SDEM, PCEF, SDIV and SRET) that I added in February and will repeat monthly forever. Sure, the amounts may bounce around but this is an automatic boost to every month from here on out.
  • KraneShares CSI China Internet ETF (NYSEARCA:KWEB) and Disney (NYSE:DIS) both paid me in January but not this quarter, KWEB is yearly, DIS is semiannually.
  • WPC and CSCO were also lower from trimming both

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

Dividends By Position Size

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

SDIV grew in size this month and now sits close to SKT in terms of income provided to position size.

There are two distinct clusters, the bottom left cluster features companies that make up less of my portfolio but contribute more to my income. That group contains names like APLE, WPC, KHC, STAG, IRM and MLPX.

The other circle is more of the traditional dividend growth companies, lower current yields but are larger positions to provide a similar level of income. These are the Home Depots, Travelers, Cornings, JPMorgans and Stanley Black & Deckers of the world.

Just below that features the binary planet system of Visa and Mastercard. Out in right field are T and MO from the sheer amount of income they provide.


On a monthly basis, the $501 received was 15.5% higher than 2018. To the right of that, the 13.52% is a rolling comparison to 2018 (sum of all dividends received this year versus last). This will help smooth out monthly variances and see just how much I'm growing my income.

Lastly is my forward looking 12-month dividend view. This is where I sum up what I would earn in the next 12 months based on the shares I own and the currently declared dividend rates.

January to February saw a huge jump from the high yield ETFs added and the moves made during April continued that trend. I crossed over $9,000 in projected income which also crossed a mark off my goals list. Hooray! The next stop is $10,000 and then $12,000 (average $1,000/month) after that. $10,000 is definitely achievable this year so that'll be where the benchmark is set next.

What that means for raw numbers is that I'm projecting 21% more income than this time last year. I also boosted my income close to 14% in just the past month by putting that spare cash to work. Finally, that last number is the current YTD growth which is 35%.

I have some dry powder, but it's a little under that 5% target (4.28% actual) that I had setup for myself.

Target Portfolio

The idea of a target portfolio means something different to everyone, but I went through the exercise of creating one for me. This is how I would like to allocate money across different equity (not asset) classes. I'm an equity guy and things like commodities, currencies or bonds don't really interest me.

I first allocated 20% to growth stocks. This scratches my itch for having shares in Berkshire 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) (NASDAQ:GOOGL)).

Next is 20% allocated to high yielding stocks. I use these 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 401K contributions.

The main portion of the portfolio at 55% is core dividend growth. This is where I am to pick names that I expect to surpass the high yielders decades down the road. I would consider names like Apple, Nike or Home Depot to be generational winners.

Lastly, the remaining 5% is allocated to cash. I think for any "active" investor there must be some cash on the sidelines at all times for opportunities that present themselves. Frequently these opportunities may only last a day and with no cash available either leads to a missed opportunity or a need to scramble to sell something else. This will help prevent FOMO.

Another way to view the core portfolio would be through a Venn diagram across the three equity categories.

For illustrative purposes, I specifically have the circles overlapping most of the area to highlight the main focus on dividend growth stocks.

Actual Portfolio

This month I moved much closer to my target allocation by putting that cash to work. I'll be honest I'm pretty happy with this, it feels approximately right.

The classifications are subjective, but I try to be logically consistent here is how I grouped them. One example of the subjective nature is Altria is pegged as a dividend growth stock but AT&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 Dividend Growth
DIS Dividend Growth
EFAS High Yield
FB Growth
GLW Dividend Growth
GOOG Growth
HD Dividend Growth
IQ Growth
IRM High Yield
ITW Dividend Growth
JNJ Dividend Growth
JPM Dividend Growth
KHC High Yield
KWEB Growth
MA Dividend Growth
MDT Dividend Growth
MLPA High Yield
MMM Dividend Growth
MO Dividend Growth
NKE Dividend Growth
NLY High Yield
PCEF High Yield
PRU Dividend Growth
SBUX Dividend Growth
SCHD Dividend Growth
SDEM High Yield
SDIV High Yield
SKT High Yield
SPG High Yield
SQ Growth
SRET High Yield
STAG High Yield
SWK Dividend Growth
T High Yield
TROW Dividend Growth
TRV Dividend Growth
UTX Dividend Growth
V Dividend Growth
WBA Dividend Growth
WPC High Yield


Income By Sector

This past month I definitely feasted at the REIT table. Last month I had about 11% income directly from REITs, now it's close to 18%.

ETFs still have their own "slice", though they are comprised of real sectors.

Sector Allocations

In a similar fashion to the previous pie chart, this one has now gained an "ETF" allocation slice. About 12% of my overall money is invested into an ETF. The rest is split appropriately across the rest of the sectors. Nothing stands out to me that needs to be adjusted because of over-allocation. REITs jumped up to close to 10% of my actual allocation versus the 18% of income they provide.

Technology and communications are heavily spoken for, but these also contain most of my growth stock holdings too.

Champion, Contender, Challenger View

I picked up one Champion (Walgreens), Contender (Simon Property Group) and Challenger (Iron Mountain) this month. Kraft Heinz and Annaly have no status joining Apple Hospitality and CVS. I do have to mention that CVS looks like they may have turned the corner in investors' eyes after being up big on earnings. We'll see how that story progresses and if Walgreens catches some of the same momentum.

Things Coming Up

For all the holdings I have, I don't have any that I'm expecting to increase during the lovely month of May.

I like to run this screener to get some idea generation going and I've included it 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

Amgen (NASDAQ:AMGN) and 3M look interesting at a quick glance for some more research.


I wrapped up April with $501 dividends which brings the yearly total to $2,528. I collected 15% more dividends than April of 2018. Year to date, I've collected 13.5% more than 2018.

I made 6 purchases:

  • 5 new holdings (NLY, WBA, KHC, IRM, SPG)
  • 1 existing holding (SDIV)

Those purchases added over $1,000 of projected income over the next year. Year to date, my projected income has grown 35%.

I also trimmed one holding (CSCO) via a covered call being exercised. I first quarter of 2019 with $663 in dividends in March. For the quarter, I cleared $2,000 dividends for the first time which represented 13% year-over-year quarterly growth.

4 of my holdings announced their dividend increases during the month with an average increase of 6.35% which is below my target of 7%.

There's never anything bad about locking in a great profit. That profit enables me to continue the cycle of buying undervalued stocks, collecting great dividends and using market folly to my gain. I'm resistant, although not immune, to the call of the siren to sell shares when I can realize fantastic gains.

My portfolio sits at all-time highs, though I have about 4% available in cash should some market opportunities present themselves.

Thanks for reading, I hope you've enjoyed reading it as much as I've enjoyed writing it. I encourage you to "follow me" if you don't already!

Disclosure: I am/we are long AAPL, ABBV, ABT, AMP, AMZN, APLE, BRK.B, CMI, CSCO, CVS, DIS, EFAS, FB, GLW, GOOG, HD, IQ, IRM, ITW, JNJ, JPM, KHC, KWEB, MA, MDT, MLPA, MMM, MO, NKE, NLY, PCEF, PRU, SBUX, SCHD, SDEM, SDIV, SKT, SPG, SQ, SRET, STAG, SWK, T, TROW, TRV, UTX, V, WBA, 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.