One Raise At A Time | Calling Up Another 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 Verizon for the 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 Thursday of last week the Board of Directors at Verizon Communications (VZ) approved an increase to their dividend payment.  The quarterly dividend was increased from $0.59 up to $0.6025 per share.  That's a decent 2.1% increase.  Verizon has now increased dividends for 13 consecutive years giving them the title of Dividend Contender.  Shares currently yield 4.39% based on the new annualized payout.

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

Since I own 46.108 shares of Verizon in my FI Portfolio this raise increased my forward 12-month dividends by $2.31.  This is the 5th dividend increase I've received from them since initiating a position in February 2014.  Over that time the dividend has grown by 13.7% organically.  According to US Inflation Calculator, the cumulative rate of inflation is just 6.5%.  

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

Verizon's dividend history isn't necessarily something you'd brag about as it's been quite a while since regular increases in the mid single digits.  However, for a company that should regularly trade at a yield above 4% and that makes up part of my higher yield positions I'm willing to accept dividend growth in the low single digits.  Obviously I'd prefer to see the dividend growth pick up to at least 4-6% more often than not; however, I think that's still a few years away as the 5G rollout and debt takes a higher priority currently.  

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1994 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 $2.31 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.85% this raise is like I invested an extra $81 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 44 dividend increases from 40 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $392.66.  

My FI Portfolio's forward-12 month dividends increased to $6,497.50.  Including my FolioFirst portfolio's forward dividends of $91.10 brings my total taxable accounts dividends to $6,588.60.  My Roth IRA's forward 12-month dividends are at $372.17.

Do you own Verizon in your portfolio?  How do you feel about their 2% dividend increase?  Too much, not enough or just right?

Please share your thoughts below.


  1. Not a bad increase at all for the telecom industry! Congrats and enjoy the few extra dollars my fried. Remember, every dollar counts!



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