One Raise At A Time | A 20% Increase From This Contender

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Harris for the pay raise!
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 Monday of this week the Board of Directors at Harris Corporation (HRS) approved an increase to their dividend payment.  The quarterly dividend was increased from $0.57 up to $0.685 per share.  That's a huge 20.2% increase!  Harris has increased dividends for 16 consecutive years giving them the title of Dividend Contender.  Shares currently yield 1.66% based on the new annualized payout.

The new dividend will be paid out on September 21, 2018 to shareholders of record as of September 7th.  

Since I own 60.506 shares of Harris in my FI Portfolio this raise increased my forward 12-month dividends by $27.83.  This is the 6th dividend increase I've received from Harris since initiating a position late 2012.  The dividend has grown by 851% organically over that time.  According to US Inflation Calculator, the total rate of inflation over that same time is 9.8%.  

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

Harris did have a pretty hefty dividend cut back in 1999 followed by 11 quarters without a raise.  However, since then the dividend growth has resumed in earnest.  My expectations for dividend growth from Harris are in the high single digits to low teens from year to year.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1999 can be found in the following chart.  

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

Wrap Up

This raise increased my forward dividends by $27.83 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.90% this raise is like I invested an extra $960 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 42 dividend increases from 39 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $387.93.  

My FI Portfolio's forward-12 month dividends increased to $6,451.35.  Including my FolioFirst portfolio's forward dividends of $91.08 brings my total taxable accounts dividends to $6,542.43.  My Roth IRA's forward 12-month dividends are at $371.75.

Have you ever looked into Harris Corporation for your own dividend growth portfolio?

Please share your thoughts below.