One Raise At A Time | The First Raise Of Many

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Smucker for the first raise of many!
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 Friday last week the Board of Directors at J.M. Smucker (SJM) raised up their dividend payment to shareholders.  The dividend was increased from $0.78 up to $0.85 per share per quarter.  That's a strong 9.0% increase.  Smucker has grown their dividend payment for 20 consecutive years giving them the title of Dividend Contender.  Shares currently yield 3.14% based on the new annualized payout.

The new dividend will be paid out on September 4, 2018 to shareholders of record as of August 17th.  

Since I own 10 shares of J.M. Smucker in my FI Portfolio this raise increased my forward 12-month dividends by $2.80.  This is the 1st dividend increase I've received from Smucker since initiating a position earlier this year.  

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

Smuckers' dividend growth from year to year is a bit choppier than I'd like to see for a consumer staple; however, when you look at longer time frames the choppiness smooths out considerably.  In the chart below the green line is the rolling 10-year dividend growth rate which has routinely hovered right around the 10% mark which is just what I like to see.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1997 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 $0.85 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $2.80 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 $100 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 35 dividend increases from 33 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $312.44.  

My FI Portfolio's forward-12 month dividends increased to $6,365.50.  Including my FolioFirst portfolio's forward dividends of $87.02 brings my total taxable accounts dividends to $6,452.52.  My Roth IRA's forward 12-month dividends are at $344.42.

Do you own Cummins in your own portfolio?  How do you deal with companies that show a marked slowdown in their dividend growth?

Please share your thoughts below.


  1. I'm mad that I didn't purchase this stock when it dipped below $100. It is a great company and that was an awesome increase.


  2. That 9% is a solid increase, but the better thing is that you didn't have to lift a finger to get it. DGI sounds like an awesome strategy to me.

  3. Great to see a fellow shareholder of SJM! That 9% raise alleviates what little concern I had of my 7% paper loss for my investment in SJM.


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