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My Dividend Growth Portfolio - Q1 2021 Summary

Khen Elazar profile picture
Khen Elazar


  • In 2015, I started publishing quarterly updates regarding my dividend growth portfolio.
  • I believe that someone who writes about financial assets should share his main holdings with his readers.
  • In this article, I will share my portfolio, changes in the past 3 months and stocks that are currently on my wish list.

compund interest concept
Photo by marekuliasz/iStock via Getty Images


It's time to summarize another quarter. The first quarter of 2021 was somewhat volatile for tech companies, but the S&P 500 finished strong with a total return of almost 6%. Since January we have a

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Khen Elazar profile picture

Analyst’s Disclosure: I am/we are long ALL STOCKS IN MY PORTFOLIO. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (79)

Are you aware that dividend growth investing is not rational investor behavior?
@Vincent1966 Might not be rational in the opinion of those who are ill-informed, but sure does produce some great results. The production of goal-meeting results is certainly the purview of the rational.
@Lobeta All existing academic research available today indicates investing ONLY in the roughly 50% of companies that distribute dividends will produce an inferior total return, ignoring taxes. You will achieve a higher return if you invest in the total market. Sell a few shares now and then if dividends don't meet income needs. When taxes are considered, the dividend growth investor falls even further behind.
@Vincent1966 Pure nonsense...although your comment as it stands may be factually true. Problem is with your thesis; as a dividend growth approach is not investing in just dividend paying stocks. It is investing in a subset of dividend paying stocks that exhibit certain characteristics, such as a continuously increasing dividend over an extended period of time. One can look, for example, at the S&P Dividend Aristocrats Total Return Index and see that the index has had a cumulative total return over the past 20 years of 737% as compared to the broad S&P 500 Index cumulative total return of 423%. The relationship holds for 25 years and 15 years as well. Of course, not all investors will achieve a favorable result, obviously, but the data clearly supports a dividend growth philosophy despite the assertions of academics. Personally, the more that do not believe in this philosophy, the better my results are likely to be.
Millionaire_Traveler profile picture
Thank you for sharing your portfolio. I can see that you're already getting comments (and some criticism) for holding positions in 70 companies. So I'm going to share my perspective.
There is absolutely nothing wrong in designing your own index fund (and that is how I see your portfolio). Investing in ETFs is a proven way to build wealth. Whether you buy shares in a fund designed by others or you construct your own fund from stocks you personally like is up to your personal investment style, stock-picking abilities, risk-proneness and ambition.
Nonetheless, there are many advantages to designing your own, among which: You can time your entry and exit points from component stocks (buy the dip...etc). While ETFs, especially those cap weighted, would habitually sell the dip. Similarly, you can buy or add components that best fit your investment criteria, and you don't have to own components that don't, or no longer do, meet your criteria. Related to that is you can decide on the allocation within your fund and not settle for ready-made, often unconvincing, allocation. Finally, you don't have to outsource thinking or fun.
Many proclaim that owning that many stocks is a lot of work. As if when you hold ETFs you no longer need to follow individual stocks. In reality, owning many stocks would relieve you from following each components myopically, since small changes in their individual performance is not as consequential to your portfolio, and you can focus your attention on the long term performance.
Best of luck!
Khen Elazar profile picture
@Millionaire_Traveler Thank you for reading and commenting!
NeoContrarian profile picture
@Millionaire_Traveler - great thoughts and comments :->
Mostly Small Caps profile picture
@Millionaire_Traveler - I agree, which I'd better since I am currently invested in 96 companies although half of them combine for just 11% of the value. It's fine to own a large portfolio and I like your reasoning. I'll only add that avoiding ETF's allows me to specifically not own companies which I don't like because of personal reasons (e.g., I don't want to support cigarette manufacturers, generally avoid environmentally unfriendly companies, ones that I consider to have poor corporate governance, etc.)
Problem is higher int rates will cause cap losses on div stocks.

Higher rates likely, as inflation rises. Labor competition root cause. 2021 will be scary
Mostly Small Caps profile picture
@elfie - keep in mind that the impact of higher rates on the valuation of high growth companies is greater than on the average dividend stock.
Khen Elazar profile picture
@elfie Thank you for reading and commenting! I agree, ignore the noise. Focus on what you can control.
craftbrewinfo profile picture
Well done and well thought through ! You are certainly on your way!
Khen Elazar profile picture
@craftbrewinfo Thank you for reading and commenting!
Limited comments about forward s&p pe being soo high of late. Say 22 or higher.

A problem??
Khen Elazar profile picture
@elfie It might, but I am not buying SPY. I buy reasonably priced assets.
A nice selection of stocks. You clearly spend a lot of your spare time studying stocks. I wish you the best going forward. Having already invested through the pandemic, you understand that good companies will rebound, and bad financial times can create a buying opportunity. Thanks for sharing.
Khen Elazar profile picture
@Sam_12 Thank you for reading and commenting!
Listing of stocks owned would benefit from a yield column.
Khen Elazar profile picture
@elfie Thank you for reading and commenting! I will take it into account, as the width is limited.
No offense intended, but why not just use SCHD or DGRO (or both)? I would consider them both "Type 2" - yield 2-3% and dividend growth about 10%. Also they will give you some built-in portfolio turnover without needing to sell positions.
Khen Elazar profile picture
@yorick3 Look at my article on SCHD. I explain it there.
I’m waiting for pullbacks to add to apt reits (eqr, ess, avb, cpt, maa). Believe demand for rentals will increase and not priced in yet. IMHO $ctre and $mpw, both have attractive yields and ctre in particular has very low leverage that I believe will result in future growth in FFO and payouts. $BNL and $NTST also have attractive debt profiles, yields and room for growth. As do $PINE and $BRMK. IMHO.
Khen Elazar profile picture
@Humble_Modesty Thank you for reading and commenting!
Wba, c, aig, met, khc, lnc, vly, ipg, are some of the stocks I own in my personal dividend portfolio. All are up anywhere from 35% to 80% since I bought them last year. Rule one to remember when it comes to managing a dividend portfolio; TIMING IS EVERYTHING! ( I bought wba and khc when nobody wanted them). Rule two; don’t be afraid to take profits in your dividend stocks. I have taken significant profits in jpm, avgo, fitb, mpc, mtb and viac ( which I bought when the dividend was over 4% and sold when the dividend went under 2% and turned out to be a multi bagger). Anyone who tells you that dividend investing is boring or unprofitable just doesn’t get it at all.
Khen Elazar profile picture
@Pisang Thank you for reading and commenting!
Don't you think that your over diversified. I counted 10 companies just in healthcare and a number more in financials. Do you really need that many companies in the same industry?
Khen Elazar profile picture
@dadjag69 I don't think I am too diversified. Healthcare is a huge sector. Medical devices? Drug distribution? Pharmacies? Pharma?
70 stocks sound difficult to monitor. I also believe in the power of dividends but only have ten or so in my portfolio (T, VZ, ABBV, O, PRU, DOW and several others). Thanks for your insights and best of success. Dividends Rule!
Khen Elazar profile picture
@carpenterdg I want the lower volatility so I need more companies. No too hard to monitor as most companies don't require me to monitor them.
Chancer profile picture
@Khen Elazar

Dividend Growth Portfolio? BAC and KMI may be good for cap gains, but not for dividend growth. The management of both is cheap on dividends and they have lower yields than their peers..

With KMI dividend increases will be no more than .03-.05 annually. BAC may increase .10-.12 in 2021, but likely not annually. If only an increase every 2 years, the average is only .05-.06.

It helps if you know the attitude of management for increasing dividends.
Khen Elazar profile picture
@Chancer Please look at the 5-year dividend growth of both companies:
BAC- 29% annually
KMI- after the cut, major increases including a 5% increase during the pandemic.
Dixie Hummer profile picture
Hearts in the right place, but there’s way too much overlap here and this is going to be a record keeping nitemare . If I were your age, I’d put 50% in either DIA or SPY with the rest w Berkshire Hathaway and 5-6 individual picks just for kicks. You get up to 70 stocks and you’re replicating the market. I also like what Richard Rainwater said: want to get rich? Concentrate. Stay rich? Diversify. I’m somewhere in the middle. Your portfolio is basically similar to Fidelity Contrafund..but there is some utility in trying to beat the mkt- however unlikely that endeavour may be.
@JoeyW : Good comment. I have read several studies that show that 20 to 30 stocks can replicate the market (same as saying being divesified). And even with 30 or so stocks you have to manage them as best you can. However, if you are into a 70 + portfolio and can "invest" the time, go for it. I just believe, as your comment states, can be a record nightmare etc.
Dixie Hummer profile picture
@JP295 I just think that there are very low cost ETF’s out there that have already sussed this DG angle out. I’m 60, so I get a buzz when HMC, LMT, MDT or BXP wire a dividend. However, were I 30 again, I’d be more down with a company that retains those earnings and ploughs them back into the company, which is a proven way to build wealth over time. Where am I going w this? AMZN. Full stop
Khen Elazar profile picture
@JoeyW Thank you for reading and commenting! These companies don't require upkeep so it's not as hard as it may seem.
rhodir profile picture
I commend your discipline and the way you have a strategy that can be articulated. Good luck young man you will be very wealthy one day.

After reading about your 70 stocks I got lazy and bought an EFT MSCI Emerging Market Index tracker on the belief that the US markets face some headwinds and emerging markets are beaten up at the moment. May take some time to bear fruit but like you I am patient
Khen Elazar profile picture
@rhodir Thank you for reading and commenting!
Paper_stax profile picture
I owned 15 of your companies until I cut ties with Exxon. I found myself owning as many as 25 companies until I dialed it back to 18 and this is likely where I'll stay. A couple of my companies make up 20% of my portfolio but thankfully they're in the black.
Khen Elazar profile picture
@Paper_stax Thank you for reading and commenting!
Mostly Small Caps profile picture
@Khen Elazar - You wrote that "In Q1 my portfolio performed better than the market due to the lower exposure to small-cap and tech companies." which would certainly suggest that you believe that small-cap stocks performed poorly in Q1. Had you looked at the Russell 2000 (i.e., the main small cap index) you would have realized that this was not the case. According to my broker, the Russell 2000 was up 12.7% ytd vs. 6.17% return for the heavily large cap weighted S&P 500 index.
@Mostly Small Caps And several small cap value funds have nearly doubled since October. My ASVIX is not an exception in the space.
Khen Elazar profile picture
@Mostly Small Caps You are correct of course. I meant the volatility among small caps.
Bulldog67 profile picture
As someone who has been an investment manager for almost 49 years, I commend you for your efforts. You seem very wise for a young investor.

My only argument with your approach is that with 70 names, you are overly diversified. There is no way one individual, or even one management firm that does not have an army of analysts on staff, can adequately follow that many companies. Do you listen to every CC by all 70 companies? Do you read research on every name? Do you follow all news released by all 70? If you do, you are one hellva allocator of one’s time!

Studies have shown that about 95% of non-market risk can be eliminated by using 25 stocks properly diversified across industries and sectors. After that, it takes more and more stocks to remove a smaller amount of risk.

Good luck, and remember that any successful investor has two major traits: discipline and patience!
@Bulldog67 i was thinking the same thing as i looked at the list. i have most investments in 10-15 names/funds or etfs.
GDPPP profile picture
@Bulldog67 If it helps the author SWAN and at the same time, be a part business owner of several wonderful companies, then why not? It's a myth that just having 20-25 companies is good enough for diversification.

I personally hold about close to 60 companies in my portfolio as well and my portfolio has outperformed SPY over the past 3 years, since I have applied the DGI philosophy to my investment approach. GLTU!
@Bulldog67 Let me respectfully disagree with you. Depending on the monetary quantity involved and the quality of the stocks, it is often not necessary to follow in detail, that is to the smallest detail. As an example I bought 10 shares of Lockheed last month and at the time I spent maybe two or three hours analysing the company and all the current information. I am satisfied, it went up and now I follow the news superficially without any major concerns. But if I buy Palantir with the same money I will be much more nervous and afraid, don't you think? Very different stocks no? Khen has excellent stocks but of course you are right there is some work involved, but that is also good.
colorado buff profile picture
How did you determine your sector size allocations? Why consumer discretionary target 20%?
Khen Elazar profile picture
@colorado buff I started with the S&P 500 allocation and did adjustments over the last decade. Staples are 20% as I want a big portion to be stable and reliable.
kos47 profile picture
Great stocks. I see you have arranged your stocks alphabetically; it would be much easier to follow if you group them by the Sector they belong to. JMO
@kos47 that's why I love M1 for my passive account. Arrange them by sectors and the % you want to allocate to each
Khen Elazar profile picture
@kos47 Thank you for reading and commenting. I will consider it.
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