One Raise At A Time | Taking Aim

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Target 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.

On Tuesday of last week the Board of Directors at Target Corporation (TGT) announced an increase to their dividend.  The dividend was increased from $0.62 up to $0.64.  That's a rather pedestrian 3.2% increase, but an increase nonetheless.  Target has increased dividends for 50 consectuve years giving them the title of Dividend Champion.  Shares currently yield 3.40% based on the new annualized payout.

Since I own 128.331 shares of Target Corporation in my FI Portfolio this raise increased my forward 12-month dividends by $10.27.  This is the 6th dividend increase I've received from Target since initiating a position in 2012.  Cumulatively, Target has increased my dividends by 77.8% through organic dividend growth alone.  According to US Inflation Calculatorthe total inflation over that same period has come in at just 9.6%

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

Target's dividend growth history is fantastic at a half century long; however, lately it's been anything but consistent.  Since I first purchased shares of Target the annual dividend growth has ranged from just over 3% to over 20%.  Despite the wild fluctuations in dividend growth rate the dividend has still climbed higher every year.  Looking back in Target's history it appears that the mid 1990's weren't especially kind to the company yet things turned around and worked out for the best.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1967 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 $0.64 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $10.27 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.94% this raise is like I invested an extra $350 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 29 dividend increases from 30 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $281.93.  

My FI Portfolio's forward-12 month dividends increased to $6,298.51.  Including my FolioFirst portfolio's forward dividends of $82.57 brings my total taxable accounts dividends to $6,381.08.  My Roth IRA's forward 12-month dividends are at $343.29.

Do you own Target Corporation?  How do you think they will fare in the face of "Amazon-ification"?

Please share your thoughts below.