Dividend Increase | Digital Realty Trust (DLR)

Dividend | Dividend Growth | Financial Independence | Freedom | Passive Income
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks DLR for the dividend increase!
There's an old Chinese proverb that says "the best time to plant a tree was 20 years ago, the next best time is now".  The reason for this is that it takes time for a tree to grow and prosper and for you to start reaping its benefits.  Dividend growth investing is much the same way.  It takes consistent saving and investing as well as time and patience to let the power of dividend growth take hold.

That's why one of my favorite things is when one of the companies I own decides to pay out more in dividends.  You mean I get a pay raise just for owning a small piece of a company?  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.  

On February 22nd the Board of Directors at Digital Realty Trust (DLR) approved an increase to their dividend payment.  The dividend payout was increased from $1.01 to $1.08.  That's a solid 6.9% increase from the prior payout.  Digital Realty is a Dividend Contender with 15 consecutive years of dividend increases.  Shares currently yield 3.69% based on the new annualized payout.  

The new $1.08 dividend will be payable on March 29th to shareholders of record as of March 15th.

Since I own 18.254 shares of Digital Realty in my FI Portfolio this raise increased my forward 12-month dividends by $5.11.  This is the 1st dividend increase I've received from Digital Realty since initiating a position in September 2018.  The total organic dividend growth since I initiated a position has been 6.9%.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 0.2%.  

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

As you can see in the chart below Digital Realty's dividend growth has been fantastic over it's 15 year history.  That being said starting in 2013 annual dividend growth has been less than 10% per year every year.  Although I'm not too concerned about that as business prospects wax and wane over time and of course Digital Realty is now paying out much more in dividends so the growth rate should slow down as a business matures.  

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 2005 can be found in the following chart.  

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

*2019's payment assumes the new $1.08 dividend is maintained for the rest of 2019

Wrap Up

This raise increased my forward dividends by $5.11 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.97% this raise is like I invested an extra $172 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 2019 I've received 12 total increases from 12 of the 53 companies held in my FI Portfolio.  In total my forward 12-month dividends have increased by $76.73.

My FI Portfolio's forward-12 month dividends increased to $6,796.52.  Including my FolioFirst portfolio's forward dividends of $92.55 brings my total taxable accounts dividends to $6,889.07.  My Roth IRA's forward 12-month dividends remain at $414.23.

Do you own shares of Digital Realty or any other data center REITs?  

Please share your thoughts below.


  1. Oh very nice JC. I missed this dividend increase. I don't own DLR, but I like the company and what they do!


    1. Bert,

      Yeah after getting a handful of so-so raises it was nice to see a good 6.9% raise out of DLR. I'm hoping to get a chance to add more DLR to my portfolio but I want to get at least a 4% yield to start off so hoping for a pullback to $108 or lower.

      All the best.


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