One Raise at a Time | For The Love Of Health...And Real Estate

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Ventas for the 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 Monday of last week the Board of Directors at Ventas, Inc. (VTR) approved an increase to their quarterly dividend payment.  The dividend was increased from $0.775 per share per quarter to $0.79.  That works out to a 1.9% increase.  Ventas is a Dividend Challenger and is working on their 8th consecutive year of dividend increases.  Shares currently yield 5.28% based on the new annualized payout.

Since I own 23.374 shares of Ventas in my FI Portfolio this raise increased my forward 12-month dividends by $1.40.  This is the 3rd dividend increase I've received from Ventas since initiating a position back in 2015.  However, due to the spinoff of Care Capital Properties (that has since been acquired by Sabra Health Care (SBRA), the cumulative dividend growth is a whopping 0%.  After adjusting for the spinoff the dividend growth is more palatable at 8.2% cumulatively since the end of 2015.  According to US Inflation Calculator the cumulative rate of inflation over that same time is just 4.1%.  That's dividend growth investing in a nutshell.  

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

I like to examine the dividend growth rates that a company has doled out over time in order to see whether dividend growth is holding steady, increasing or decreasing.  Looking at this gives you an idea of the possible future direction of dividend growth.

Ventas' dividend growth clearly seems to have slowed over the last few years which is disappointing, although not really unsurprising given the environment they're dealing with.  Rising interest rates, cutting health care costs, spinning off portions of their business.  Overall though things seem just fine and if a company is paying me over 5% then I don't require big dividend growth in order to be happy.
dividend growth investing, dividend, passive income, financial independence
Ventas Inc. (VTR) Annual Dividend and Rolling Dividend Growth Rates
A full screen interactive version can be found here.

Wrap Up

My forward dividends increased by $1.40 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.70% this raise is like I invested an extra $52 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 2017 I've received 46 dividend increases from 39 companies held in my FI Portfolio increasing my forward 12-month dividends by a combined $267.00.

My FI Portfolio's forward-12 month dividends increased to $5,810.06.  Including my FolioFirst portfolio's forward dividends of $75.82 brings my total taxable accounts dividends to $5,885.88.  My Roth IRA's forward 12-month dividends are at $318.35.

Do you own shares of Ventas?  Any concerns with the slow dividend growth or just steady as she goes while they work things out?

Please share your thoughts below.

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  1. PiP -

    All about the dividend increases. Keep it going!


  2. Always nice to keep reading about dividend raises coming your way. VTR and many other health REITs continue to look attractive going into 2018. Names like HCN, HCP, OHI, LTC and others are much better priced today than just six months ago.

  3. Nice post. Just came across your site from the comments you left on my latest post (thanks :).

    All our real estate exposure (~25% of our net worth) is via a REIT Index in my Roth IRA, so no direct holding to VTR but it is part of the index. We're also dabbling a bit in Fundrise now (only ~$3500 initially).

    Thanks for the post.

  4. @PIP - nice raise, VTR and other REIT's have pulled back in the last few sessions. Some good value in that sector right now.


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