One Raise At A Time | The Summer Heats Up With Another Dividend Increase

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks CBOE 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 August 1st the Board of Directors at CBOE Holdings (CBOE) announced an increase to their dividend payment.  The quarterly dividend was raised from $0.27 up to $0.31 per share.  That's a solid 14.8% increase.  CBOE Holdings has increased their dividend payment for 7 consecutive years giving them the title of Dividend Challenger.  Shares currently yield 1.31% based on the new annualized payout.

The new dividend will be paid out on September 14, 2018 to shareholders of record as of August 31st.  

Since I own 21.101 shares of CBOE in my FI Portfolio this raise increased my forward 12-month dividends by $3.38.  This is the 1st dividend increase I've received from CBOE since initiating a position in February.  

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

CBOE is in the infancy of its dividend growth story and I think there's still plenty more room for continued dividend growth in the future.  The business model is very capital light and CBOE assumes no market risk as they act as an exchange to facilitate the matching of buyers and sellers for stocks, ETFs and options.  Lending more support to the potential dividend growth is that TTM EPS were $4.43 and the estimate for FY 2019 is for $4.89.  That puts the payout ratio using the newly increased dividend at 28% and 25%, respectively.

The 1-, 3- and 5-year rolling dividend growth rates since 2011 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 $0.31 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $3.38 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 $115 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 39 dividend increases from 37 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $346.94.  

My FI Portfolio's forward-12 month dividends increased to $6,401.99.  Including my FolioFirst portfolio's forward dividends of $86.93 brings my total taxable accounts dividends to $6,488.92.  My Roth IRA's forward 12-month dividends are at $371.75.

Do you own CBOE Holdings in your portfolio?  What about other exchange companies?

Please share your thoughts below.


  1. I love it - Let the dividend increases continue to flow my friend. Enjoy the extra dividend income!



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