DGI For The DIY

[fenders53]

(07-30-2021, 09:20 AM)EricL Wrote:

(07-30-2021, 08:53 AM)fenders53 Wrote:

(07-30-2021, 08:22 AM)EricL Wrote:

(07-30-2021, 07:45 AM)fenders53 Wrote: I was just about to ask where your update was but I see the website is updated. Looks like you are chugging along towards the 10% income growth goal this year.  It's going to remain challenging but now that you are pooling dividends I like your chances better.  In any event it's a good goal because it is difficult.

For those interested, here is the link to my latest update.

Dividend Growth Digest

The portfolio is doing well, but I'm not sure yet if I'll make the double-digit income growth. I'm finding that while I really enjoy the flexibility that pooling dividends gives me and the freedom to buy what I want, it is actually having a negative impact on my income growth.

I'm pooling dividends from the likes of 5%+ yielders CVX, KMI, XOM, T, OHI, and MO and reinvesting those dividends into other ideas yielding 2-3%, so the reinvestment effect on income is roughly halved. I still have 5 months left so there's time to make it up, but I'm trending more towards 9% growth right now.

The upside is those reinvestment dollars are generally going into higher growth names. So while I may end up missing my income mark, I'll probably end up better in total portfolio growth, which can be converted to income down the road.

So why not just put it all into FANG now and buy some MO in 20 years?  Did you even hear what you just typed?  

It's nothing provocative, it's simply math.

A 7% yielding stock growing at 2% is nearly assured to have smaller capital gains over the next 20 years than a stock yielding 2% and growing at 12%. Reinvesting dividends from this higher yielding stock into lower yielding stocks drops my income growth in the near-term, but should result in bigger capital gains down the road.

I'm not planning to sell those higher yielders now as they are providing nice funds to build out my portfolio, but in hindsight, I probably should have focused more on the 1-2% yielding stocks rather than the 4-6% yielders when I built the portfolio.

I own Facebook, Amazon, and Google as well in my trading account. Still no Netflix though...

I got in just before you on that last post.  Yes you are correct focusing on the true DGI stocks at the outset would have made it easier. You did however collect some big yield and dripped quite a few new shares.  I do hope you keep your goals segregated between your ports.  I don't have the skills to present it but that is exactly what I am trying to do now.  XX% dollars are dedicated to income now, XX% towards pure growth, XX% in stocks I think will grow their Divs above market average for a decade.  It's just another form of diversifying my port.  You and I have no clue what style will reward only a few years from now.  It's so easy to get locked in on what has worked the past few years. XOM and MO might be the only place to make money the next few years. I don't expect that but we never know.

[ken-do-nim]

One of my first posts on this forum was whether to pursue growth during the accumulation phase, then switch to income later, or DGI all along.

http://dividendgrowthforum.com/showthread.php?tid=1934

FAANGM (Facebook - Apple - Amazon - Netflix - Google - Microsoft) is pretty hard to overlook given the returns its given for the last 10 years.

[fenders53]

Depends on your personality and true appetite for risk. Hard to watch your port drop 35% or much more and just stay there for years. Sketchy income stocks will drop just as hard or go insolvent. Most start "trimming losers" after the damage is done and lock in losses. I'm not willing to endure that again. It's not fun. IMO there should be a lot of growth in your port during accumulation phase if you have to guts to endure it. It's not easy when everyone is saying the market is going to zero and it looks like they may be right.

[EricL]

Did some updating on my watch list and thought I'd share names for those looking for potential ideas.

Here are stocks I own that look reasonably priced or are projected to provide 15%+ annualized returns over the next 5 years:
ABBV, AMGN, AMP, BDX, BMY, CMCSA, CMI, CVX, D, EOG, FLO, KMI, LMT, LOW, MA, MED, MMM, MO, OHI, PM, SRE, T, WBA, XOM.

These are from my watch list:
ANTM, BAX, LHX, NOC, PRI, SNA, TROW, TSCO

The spreadsheet can be found here, just click on the "Valuations" tab at the bottom of the table.

[fenders53]

I misread that at first Eric. I thought you were saying all of those stocks are projected to grow at 15% average for five years. That seemed a little optimistic for some of them.

[EricL]

I haven't written any portfolio updates yet, but I have updated my spreadsheet for portfolio valuations with 2022 earnings estimates.

If anyone is interested in the information, you can find it roughly 2/3 of the way down my portfolio page. You should be able to click on the "Valuations" tab which will show the spreadsheet with the info. I have info on all 52 stocks in the portfolio, as well as another 24 stocks on my watch list.

I also track all dividend increase announcements in the portfolio and have them recorded on the "DivInc" tab.

[fenders53]

Always enjoy the updates Eric. We may debate on the forum constantly but I think that is constructive. I've made decent money on a half dozen of your suggestions and own several for the very long term.

[EricL]

Just hit a new all-time high for the portfolio, passing $120k for the first time!

[ken-do-nim]

(12-15-2021, 03:29 PM)EricL Wrote: Just hit a new all-time high for the portfolio, passing $120k for the first time!

Awesome!!!

[EricL]

With yesterday's payments from Broadcom and Becton, Dickinson now in, here is the 2021 dividend income progress for my portfolio.

   

A 12.14% increase for the year, keeping my double-digit income growth streak alive!

I also updated my portfolio page on the website with current numbers if anyone is interested.

Happy New Year!

[fenders53]

Congrats. I just read a few of your earliest articles. Glad you didn't just buy an ETF as many advised. That would have been boring. Happy New Year to you and your family.

[EricL]

Had my first ever $400 month in March with a total of $404.59.

First-quarter dividend income was up by 15.2% over last year's total and portfolio value is down just 0.56% from the beginning of the year.