Monday, August 31, 2015

Dividend Growth Investing at Work - A Double Helping of Dividend Increases


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 said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  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!  I mean who really doesn't like getting a raise for doing nothing?

Friday was an excellent day for my dividend growth portfolio with two of my holdings announcing increases.  First up was Bank of Nova Scotia (BNS) which announced a 2.94% increase to the quarterly dividend increasing it from $0.68 to $0.70.  The increase wasn't that much compared to the previous payout but Bank of Nova Scotia has been doing two smaller increases each year for the last several years.  Year over year the 4Q dividend has increased 6.06%.  Since I own 25 shares of BNS, the new dividend payout will increase my annual dividends by $1.51.  *This is technically a decrease in the quarterly dividend paid in U.S. dollars due to the currency fluctuation, but that's the nature of the beast with investing in foreign companies that pay in their local currency.  Eventually the strength of the USD will soften and the currency swing will help me out.

Later in the day news of another dividend increase came up.  This time it was Harris Corporation's (HRS) turn.  The Board of Directors announced a 6.38% increase in the quarterly dividend raising it from $0.47 to $0.50.  This marks the 14th consecutive annual dividend increase from Harris.  Since I own 82.506 shares of HRS, the new dividend payout will increase my annual dividends by $9.90.

Neither of the increases were spectacular but I wasn't expecting double digit increases from either one of them.  It's just great to receive increases that continue to outpace inflation which is what we're all after.  At the end of the day my annual dividends increased by $11.41 while I slept (I'm working the night shift right now).  Based on my portfolio's current yield of 3.29% these raises are like I invested an extra $347 in capital.  Except that I didn't!  One of the companies I own just decided to send more of the profits my way.  That's how you can eventually reach the crossover point where you dividends received exceed your expenses.  That's the beauty of the dividend growth investing strategy because you build up your dividends by fresh capital investment as well dividend increases from the companies you own.

My FI Portfolio's forward-12 month dividends are up to $5,953.89 and including my Loyal3 portfolio's forward dividends of $57.62 brings my total taxable account forward dividends to $6,011.51.

Image courtesy of digitalart on FreeDigitalPhotos.net.

5 comments:

  1. Congrats on the raises, JC. Too bad the currency conversion makes it a div cut in BNS...but over the long run, things should smooth out.

    best
    R2R

    ReplyDelete
  2. Good Day JC
    Congrats on the dividend raises in your portfolio.

    Cheers

    ReplyDelete
  3. Good Day JC
    Congrats on the dividend raises in your portfolio.

    Cheers

    ReplyDelete