Dividend Growth Investing at Work - Throttling Up Higher Dividends
|Getting a pay raise while sitting on the couch? Sign me up! Thanks Cummins for the pay raise!|
It's always great to see one of the companies you own announcing a dividend increase. Yesterday the Board of Directors of Cummins, Inc. (CMI) gave investors another pay raise increasing the dividend from $0.975 to $1.025 per quarter. That's a solid 5.1% increase compared to the previous quarters' payment. Cummins, Inc. is a Dividend Contender with 11 consecutive years of dividend growth. Shares currently yield 3.45%.
Since I own 23.318 shares of Cummin in my FI Portfolio this raise increased my forward 12-month dividends by $4.66. This is the 4th dividend increase I've received from Cummins since initiating a position in 2012. Cumulatively my income from Cummins has increased by 105%!!! A doubling of dividend income in just 4 years is might impressive. According to USInflationCalculator the total rate of inflation over the same time period is just 4.6% so Cummins has increased my income 25 times faster than inflation.
|Cummins, Inc. Quarterly Dividend Payment History Since 2001|
|Cummins, Inc. Dividend Growth and Annualized Growth Rates Since 2001|
|Cummins, Inc. Dividend Payout Ratios Since 2006|
My forward dividends increased by $4.66 with me doing nothing. That's right, absolutely nothing to contribute to their operations. Based on my portfolio's current yield of 2.92% this raise is like I invested an extra $160 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.
For a dividend growth investor there's not much that's better than hearing news of a dividend increase. So far this year I've received 28 increases from 24 companies increasing my forward 12-month dividends by $161.32.
My FI Portfolio's forward-12 month dividends increased to $5,602.25 and including my Loyal3 portfolio's forward dividends of $63.67 brings my total taxable account forward dividends to $5,665.92.
Do you own shares of Cummins, Inc.? Do you think they can keep their dividend growth streak going?
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