One Raise At A Time | Back to Expectations

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Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Phillips Morris for 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.

Last Friday the Board of Directors at Phillip Morris (PM) announced an increase to their dividend.  The dividend was increased from $1.07 up to $1.14.  That's a solid 6.5% increase.  This increase also marked 11 consecutive years of dividend increases giving them the title of Dividend Contender.  Shares currently yield 5.83% based on the new annualized payout.

Since I own 62.610 shares of Phillip Morris in my FI Portfolio this raise increased my forward 12-month dividends by $17.53.  This is the 6th dividend increase I've received from Phillips Morris since initiating a position in late 2012.  Despite slower than expected dividend growth, Phillip Morris has still grown their payout over 3 times faster than the 9.6% rate of inflation according to US Inflation Calculator.

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

I mentioned earlier that Phillip Morris' dividend growth had been a bit underwhelming the last few years as I had expected 5-9% growth on an annual basis while 2016 and 2017 growth came in around 2%.  Luckily the increase in 2018 was right where I expect them to be more often than not.

*One other thing that could be a good sign for future dividend growth is that Phillip Morris moved up their dividend raise announcement by a quarter.  

The 1-, 3- and 5-year rolling dividend growth rates since 2008 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 $1.14 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $17.53 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 $601 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 27 dividend increases from 28 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $257.58.  

My FI Portfolio's forward-12 month dividends increased to $6,247.15.  Including my FolioFirst portfolio's forward dividends of $82.05 brings my total taxable accounts dividends to $6,329.20.  My Roth IRA's forward 12-month dividends are at $342.56.

Do you own Phillip Morris or any other "sin" stocks?

Please share your thoughts below.


  1. PM is still the machine. I'm happy with this recent raise and these days PM is selling at a much higher yield too because of its recent price drop. I know cigs are polarizing but from an investment perspective this old dog still has some legs.

    1. Keith,

      I was pretty surprised to see the 6.5% increase and the fact that it came a quarter earlier than normal. I figured we could expect another 2-4% raise this year, but I guess management is feeling pretty good about where they're at. I finally added some MO to my portfolio a couples months back and I'm glad to have it in there churning out dividends. I think there's still plenty more for both of them to run over the decades and whenever marijuana becomes legalized I see no reason for them to not get involved in some manner.

      All the best.


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