One Raise At A Time | 55 Years In The Making

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Johnson & Johnson 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 26th the Board of Directors at Johnson & Johnson (JNJ) announced another dividend increase for shareholders in their storied history.  The dividend was increased from $0.84 up to $0.90.  That's a nice 7.14% increase.  Johnson & Johnson is a Dividend Champion with 55 consecutive years of dividend increases.  Shares currently yield 2.85% based on the new annualized payout.

Since I own 77.23 shares of Johnson & Johnson in my FI Portfolio this raise increased my forward 12-month dividends by $18.54.  This is the 5th dividend increase I've received from Exxon Mobil since initiating a position in 2013.  Cumulatively, the organic dividend growth has totaled a whopping 36.4% over that time.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 7.1%.

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

Johnson & Johnson's dividend history is a thing of beauty and only bested by a handful of companies.  Dividend growth has clearly slowed down over time as the company has grown and the dividend was increased faster than profits; however, annual dividend growth in the 5-9% range should still be expected more often than not.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1973 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 $0.82 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $18.54 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.95% this raise is like I invested an extra $628 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 24 dividend increases from 23 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $214.68.  

My FI Portfolio's forward-12 month dividends increased to $6,190.06.  Including my FolioFirst portfolio's forward dividends of $79.05 brings my total taxable accounts dividends to $6,269.11.  My Roth IRA's forward 12-month dividends are at $338.52.

Do you own Johnson & Johnson in your own portfolio?  

Please share your thoughts below.