One Raise at a Time | United Technologies

Concept of how dividend growth investing works, health care, real estate
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks United Technologies 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 Wednesday of last week the Board of Directors at United Technologies (UTX) announced an increase to their quarterly dividend payment.  The dividend was increased from $0.70 per share up to $0.735 per share.  That works out to a 5.00% raise.  United Technologies is a Dividend Contender with 24 consecutive years of dividend increases.  Shares currently yield 2.27% based on the new annualized payout.

Since I own 14 shares of United Technologies in my FI Portfolio this raise increased my forward 12-month dividends by $1.96.  This is the 4th dividend increase I've received from United Technologies since initiating a position in October 2014.  Cumulatively, the organic dividend growth from UTX has totaled a whopping 24.6% over that time.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 6.6%.  

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

Historically United Technologies had solid dividend growth with year over year increases ranging from 7.5% to well into double digits.  However, since I purchased shares in 2014 dividend growth has markedly slowed down.  Part of that is due to UTX's weird 5 quarter increase schedule as well as the company selling off parts of the business.  Dividend growth has still been acceptable at 5.7% annualized since my purchase although I'm disappointed since I was expecting growth to be at least in the 7-8% range more often than not.

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 $1.96 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.98% this raise is like I invested an extra $66 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.

So far in 2018 I've received 48 dividend increases from 43 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $452.73.  

My FI Portfolio's forward-12 month dividends increased to $6,776.53.  Including my FolioFirst portfolio's forward dividends of $91.00 brings my total taxable accounts dividends to $6,867.53.  My Roth IRA's forward 12-month dividends remain at $396.62.

Do you own shares of Untied Technologies?  What do you do when dividend growth disappoints?  Do you take a wait and see approach?

Please share your thoughts below.


  1. Hi, own UTX and like not only the continous dividends but also latest action around the company with Bill Ackman & Dan Loebs pushing for break-up and the ongoing deal with Rockwell. It spices things up a bit!
    If I believe in dividend cuts or profit decreases the stock goes out. Latest for me was GE where I sold half of my holdings last year.
    Regards, Toscananext (from Sweden with small blog, large portfolio)


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