One Raise At A Time | Dividend Increase Part Deux

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Altria for the second dividend increase!
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?  Dividend growth investing is far from a get rich quick investment strategy, rather you need to remain focused on the long term goal to be successful.

On Thursday last week the Board of Directors at Altria (MO) announced another increase to their dividend payment.  The quarterly dividend was increased from $0.70 up to $0.80 per share.  That's a huge 14.3% increase!  Even better is that's their 2nd raise this year alone.  The year over year increase is a whopping 21.2%.  Altria has now increased dividends for 49 consecutive years giving them the title of Dividend Champion.  Shares currently yield 5.44% based on the new annualized payout.

The new dividend will be paid out on October 10, 2018 to shareholders of record as of September 14th.  

Since I own 18.415 shares of Altria in my FI Portfolio this raise increased my forward 12-month dividends by $7.37.  This is the 2nd dividend increase I've received from Altria since initiating a position earlier this year.  The dividend has grown by 21.2% organically over that time.  According to US Inflation Calculator, the yearly pace of inflation is just 2.8%.  

A full screen version of this chart can be found here.

It might look like there were cuts in 2007 and 2008, but it was due to the spinoff of Kraft (KFT), which later became Kraft Heinz (KHC), and Phillip Morris (PM).  Since then Altria has continued with its dividend growth routinely clocking in between 7-9% per year.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1989 can be found in the following chart.  



A full screen version of this chart can be found here.

Wrap Up

This raise increased my forward dividends by $7.37 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.90% this raise is like I invested an extra $250 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash 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!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

Thus far in 2018 I've received 41 dividend increases from 38 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $3360.10.  

My FI Portfolio's forward-12 month dividends increased to $6,422.44.  Including my FolioFirst portfolio's forward dividends of $91.06 brings my total taxable accounts dividends to $6,513.50.  My Roth IRA's forward 12-month dividends are at $371.75.

Do you own BP plc in your portfolio?  What about other commodity specific companies?

Please share your thoughts below.

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