One Raise At A Time | Riding This Stagecoach To Higher Dividends

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Wells Fargo for another dividend 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 July 24th the Board of Directors at Wells Fargo (WFC) officially approved of the increased dividend from the latest round of CCAR.  The dividend was increased from $0.39 up to $0.43 per share per quarter.  That's a solid 10.3% increase. Wells Fargo a has grown their dividend payment for 7 consecutive years giving them the title of Dividend Challenger.  Shares currently yield 2.97% based on the new annualized payout.

The new dividend will be paid out on September 1, 2018 to shareholders of record as of August 10th.  

Since I own 55.024 shares of Wells Fargo in my FI Portfolio this raise increased my forward 12-month dividends by $8.80.  This is the 7th dividend increase I've received from Wells Fargo since initiating a position in 2011.  Over that time the dividend payment has grown by 258% cumulatively.  According to US Inflation Calculator the total rate of inflation over that same time is just 12%.

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

Much like Bank of America it should come as no surprise that Wells Fargo owners also suffered a dividend cut during the housing bubble/financial crisis.  However, after a brief 8 quarter freeze to their dividend while the company conserved captial the raises have been coming in earnest.  In fact in 2014 Wells Fargo's dividend payment had surpassed pre-financial crisis levels.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1995 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 $0.43 per share is maintained for the rest of the year.

I also own 29.953 shares of Wells Fargo in my Roth IRA which saw the forward 12-month dividends increase by $4.79 due to the dividend raise.

Wrap Up

This raise increased my forward dividends by $8.80 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 $300 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 38 dividend increases from 36 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $343.56.  

My FI Portfolio's forward-12 month dividends increased to $6,398.98.  Including my FolioFirst portfolio's forward dividends of $87.01 brings my total taxable accounts dividends to $6,485.99.  My Roth IRA's forward 12-month dividends are at $371.75.

Do you own Wells Fargo in your portfolio?

Please share your thoughts below.


  1. बाजार की बड़ी खबरI don't care if the market is p or down. whati'm looking for is a bargain
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    - एल्युमिनियम में उछाल, #MCX पर एक महीने के ऊपरी स्तर पर भाव capitalstars


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