Monday, October 26, 2015

Dividend Growth Investing at Work - Higher Payments from the Leading Payment Processor


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?

Last Wednesday one of my favorite high dividend growth low yield companies announced another solid increase to their dividend.  On October 21 the Board of Directors for Visa (V) approved an increase in the quarterly dividend from $0.12 to $0.14.  That's a 16.7% increase from the previous quarterly payout.  Visa currently has a 7 year streak of growing their dividend with a five year dividend growth rate of 30.7%.  I don't think they'll be able to continue a 30% growth rate but 12-20% annual increases should continue.  Since I own 68.136 shares of Visa, this raise will increase my forward 12-month dividends by $5.45.

My forward dividends increased by $5.45 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 3.21% this raise is like I invested an extra $169 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 raises from YUM Brands (YUM)Omega Healthcare Investors (OHI) and Kinder Morgan, Inc. (KMI) and adding in Visa's increase my forward dividends have increased by $34.19 just for owning excellent companies.  Based on increase announcements from last year Aflac (AFL) and Starbucks (SBUX) should be joining in on the fun as well.

My FI Portfolio's forward-12 month dividends are up to $6,016.38 and including my Loyal3 portfolio's forward dividends of $58.75 brings my total taxable account forward dividends to $6,075.13.

Do you own Visa Inc. in your portfolio?  Do you sprinkle in low yield high growth companies to your portfolio?

Image courtesy of digitalart on FreeDigitalPhotos.net.

7 comments:

  1. Yep, own it and love it. I hope to buy more Visa when the recession finally arrives. My biggest mistake of October 2014 was that I didn't buy 5 times as much Visa stock
    -Bryan

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    1. Bryan,

      You and me both. I should have bought a lot more Visa whenever I've made purchases before. The late August flash crash was another great opportunity. Whenever we do roll over into a recession Visa should get dragged down with the market even though they're still likely to grow through it. That's perfectly fine by me because I'll be sitting there ready to scoop up shares.

      Thanks for stopping by!

      Delete
  2. Wow, that's a nice raise. Visa is quickly establishing themselves as a significant dividend grower. Congratulations!

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    1. Ferdi,

      Visa is a great dividend grower I just wish the yield was a bit higher but that's the only complaint I have about this excellent company. They should still be able to provide 10-15% EPS growth which will fuel high dividend growth without even raising the payout ratio. Lots to like about Visa.

      Thanks for stopping by!

      Delete
  3. Nice! Those ~$34 are like ~$1000 less you have to invest and work for it. Pretty amazing!

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    1. Trader,

      Yeah that's the beauty of dividend growth investing. That $34 dollar raise might not seem like much but when you do the math it's the equivalent of an extra $1k that I invested. And that's just in one month and I expect to get two more raises as well. Add that up over a full year and you see the true power of DGI.

      Thanks for stopping by!

      Delete