The advantages of a dividend investor and especially of a dividend growth investor should be that the companies increase their dividends every year. This year I want to start tracking my dividend increases more carefully.
As you can see my portfolio consists of:
- some slow growers like all the utilities or ORI, which on the other side already offer a very good yield
- steady growers like Johnson & Johnson or Pepsi etc.
- fast growing stocks like CVS
My goal is to have an average annual dividend growth of 7.5% per year. Giving the mixture of my portfolio this is a very challenging goal, as I do not have that many fast growing companies in my portfolio. But as you can see in my recent stock valuation articles in the future I will definitely concentrate my investment decision more on the potential dividend growth.
So let’s have a look at the recent dividend increases in 2017
- KO: Yearly dividend from 1.40 to 1.48 USD 5.71% Increase
- CSCO: Yearly dividend from 1.04 to 1.16 USD 11.54% Increase
- WMT: Yearly dividend from 2.00 to 2.04 USD 2.00% Increase
- ORI: Yearly dividend from 0.75 to 0.76 USD 1.33% Increase
Based on the numbers of shares I have of each company and the already published dividend increases it makes an average dividend increase 4.79%, which is behind my goal of 7.5%. As I just have started to track this development I am already looking forward to seeing the other increases which will come up in the next 2 months. To avoid any misunderstandings, I only included the declared dividend increases in 2017 and only of those stocks I have bought before the increase was declared. That’s why CVS and VFC are missing in that list.
How much more income do I generate
In total I am generating now 20.42 EUR more dividend income before tax and based on constant FX-Rate. If you look at this number, this does not look a lot but considering my current dividend yield before taxes of 3.98% it would mean an additional investment of 512.67 EUR. If I am looking at my current interest rate of my saving account of 0.30% I would need 6 805 EUR to generate an income of 20.42 EUR. So, after all the 20.42 EUR do not look that bad anymore.
