One Raise At A Time | 62 And Going Strong

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Procter & Gamble for yet another 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 April 10th the Board of Directors at Procter & Gamble (PG) announced another dividend increase for shareholders.  The dividend was increased from $0.6896 up to $0.7172 which is a solid 4.00% increase.  Procter & Gamble is a Dividend Champion with 62 consecutive years of dividend increases.  Shares currently yield 3.65% based on the new annualized payout.

Since I own 68.412 shares of Procter & Gamble in my FI Portfolio this raise increased my forward 12-month dividends by $7.55.  This is the 7th dividend increase I've received from Procter & Gamble since initiating a position in 2011.  Cumulatively, the organic dividend growth has totaled a whopping 36.6% over that time.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 10.9%.  Despite Procter & Gamble's slower dividend growth it's still more than tripled the rate of inflation and increasing purchasing power.

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

Realistically Procter & Gamble's glory days of 10%+ annual dividend growth are probably behind them.  However, thanks to their product mix that generally consists of consumables and repeat purchases dividend growth should keep marching forward year after year.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1993 can be found in the following chart.  

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

*2018's dividend assumes the new quarterly payout of $0.7172 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $7.55 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.89% this raise is like I invested an extra $261 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.

So far in 2018 I've received 20 dividend increases from 19 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $169.24.  

My FI Portfolio's forward-12 month dividends increased to $6,119.42.  Including my FolioFirst portfolio's forward dividends of $78.53 brings my total taxable accounts dividends to $6,197.95.  My Roth IRA's forward 12-month dividends remain at $337.40.

The back half of April should be busy in terms of dividend growth announcements with 5 more likely to be announced and potentially a 6th.  Needless to say I'm pretty excited to see what April has in store.

Do you own shares of Procter & Gamble?  Do you think they will return to annual dividend growth in the 5-7% range or will they be stuck in the 3-4% area?

Please share your thoughts below.


  1. Always love the increases JC, but was hoping for a little more from P&G. Maybe I am being unrealistic, but am hoping their brand rationalization will yield more fruit in future years. Tom


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