Thursday, October 22, 2015

Dividend Growth Investing at Work - Piping In Higher Dividends

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 doesn't like getting a raise for doing nothing?

Yesterday, Kinder Morgan Inc. (KMI) announced yet another increase to their quarterly dividend.  The Board of Directors approved an increase in the dividend from $0.49 to $0.51.  That's a solid 4.08% increase from the previous quarterly payout.  They've increased the dividend every year since becoming a publicly traded company in 2011 but what's more impressive is that out of the 18 possible quarterly increases they could have delivered they've only failed to deliver on 2.  That's right 16 of the last 18 payments were higher than the previous quarters payments!  Year over year this increase works out to an excellent 15.91% raise which is truly remarkable considering the company has regularly traded for a 4.0%+ yield.  Since I own 218.453 shares of Kinder Morgan Inc., this raise will increase my forward 12-month dividends by $17.48.

And the dividend should continue to grow in 2016 as well.  Kinder Morgan is expecting a dividend increase of 6 to 10 percent for the 2016 payout.  Considering the turmoil that is going on in the O&G sector I'm not surprised to see a wider range of forecast dividend growth.  Kinder Morgan's operations are largely shielded from commodity pricing but not completely.

My forward dividends increased by $17.48 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 3.27% this raise is like I invested an extra $534 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 your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  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.

The divided increase party for October is just getting under way.  I've already received a raise from YUM Brands (YUM) and Omega Healthcare Investors (OHI) and based on increase announcements from last year Aflac (AFL), Visa (V), and Starbucks (SBUX) should all be joining in on the fun.

My FI Portfolio's forward-12 month dividends are up to $6,010.93 and including my Loyal3 portfolio's forward dividends of $58.92 brings my total taxable account forward dividends to $6,069.86.

The raise from KMI also brought my forward dividends up over the $6k mark again.  They had previously climbed above but due to some selling to raise cash for expenses they dipped back down.  That's an average of over $500 per month of passive dividend income which should continue to grow over time.

Do you own Kinder Morgan Inc. in your portfolio?  

Image courtesy of digitalart on


  1. Five hundred bones a month in additional investment is enough to start a nice snowball. Looking forward to the day you post you are joining me in FIRE!

    1. FV,

      I've got a long ways to go before I'll be joining you in FIRE but $500 per month is a good start on my way. Assuming I invest that $500 each month at a 3% yield that will increase my forward dividends by $15 annually with each $500 investment to keep that snowball rolling.

      Thanks for stopping by!