Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends. Just for owning a small portion of the companies. Not going and doing R&D for new products or technology. Not selling any products. Not managing any employees or inventory. All I had to do was have the foresight to invest some of my savings in excellent companies. That's dividend growth investing at work!
First up was IBM. IBM had another disappointing round of earnings with their 12th consecutive quarter of revenue declines. Although the cloud computing division saw solid improvement and on a currency neutral basis revenues were flat. Dividend growth investors are being rewarded with a dividend increase. And a big one at that! IBM increased the quarterly payment from $1.10 to $1.30. That's an excellent 18.2% increase. I expected a much smaller raise this year while IBM continues its transformation from a hardware to software and service company. I don't know about all of you but I've never once received an 18.2% increase from my employer. Since I own 30.220 shares of IBM this will increase my forward dividends by $24.18.
Later in the week it was ExxonMobil's turn. The decline in oil prices has been well documented but I think the oil majors will weather this storm just fine. ExxonMobil rewarded shareholders with another dividend increase. The quarterly dividend was raised from $0.69 to $0.73. That's a 5.8% increase. Unfortunately, raises this good are still hard to come by as well from an employer but they come quite regularly from excellent companies. Since I own 52.744 shares of XOM this will increase my forward dividends by $8.44.
The two increases combined to raise my forward 12-month dividends by $32.62. Based on my portfolio's current yield of 3.01% these increases are like I invested an extra $1,083.72 in capital. Except I didn't. Some of the companies that I own just decided to pay me more. That's how you can eventually reach the crossover point where you dividends received exceed your expenses.
My FI Portfolio's forward-12 month dividends are up to $5,647.45 and including my Loyal3 portfolio's forward dividends of $55.98 brings my total taxable account forward dividends to $5,703.43.