08-21-2013, 02:05 PM
Thanks for the insights!
Well, it's pretty clear that the screening was... precise, yet imprecise. So I tried a different approach.
Since my time horizon is shorter, I decided that my primary screen will be equities that have sustained high dividend growth rates. I downloaded the Dividend Champions, Contenders and Challengers spreadsheet from the DRIP website and simply looked at dividend growth rates over 1/3/5/10 year periods for all CCC to identify my potential purchases.
Wow. This was an englightening exercise. My criteria of 20% DGR (ish) over 10 years quickly whittled the list down to a manageable size. I picked out five 'no brainers', verified the fundementals on schwab and initiated small positions. I will average in over time. The five? Well, no new news here:
CMI
UNP
TGT
WAG
LOW
I prefer to have a concentrated portfolio, but not THAT concentrated. I'm thinking that I can manage to keep up with 10-20 positions (I also have a broad spectrum of wisdom tree etfs to cover emerging and intl markets, plus I hold individual issue bonds).
I'm still doing research on a few more, mostly those who have been paying dividends for a shorter time period like ACN, V, COH, DV, MSFT, NATI, SWY and WSM.
There are also some companies that I have little knowledge of, such as TJX, TXN, SU, SEIC, EGLD, RTN, JW-A, GK, DCI CHD, and AEL.
And there are some well known companies whose dividend 10 year dividend growth meets my criteria, or at least comes close, but whose recent increases have tailed off, like AFL, MCD, CHRW, ITW and INTC.
In all those cases, I will need to simply do the research and figure out which ones appear to be able to sustain the requisite dividend growth.
It is definitely a different way to build a portfolio, which is why my original screen as too limiting - I was trying to apply a bottoms up approach and it was not valid for the portfolio construct.
Well, it's pretty clear that the screening was... precise, yet imprecise. So I tried a different approach.
Since my time horizon is shorter, I decided that my primary screen will be equities that have sustained high dividend growth rates. I downloaded the Dividend Champions, Contenders and Challengers spreadsheet from the DRIP website and simply looked at dividend growth rates over 1/3/5/10 year periods for all CCC to identify my potential purchases.
Wow. This was an englightening exercise. My criteria of 20% DGR (ish) over 10 years quickly whittled the list down to a manageable size. I picked out five 'no brainers', verified the fundementals on schwab and initiated small positions. I will average in over time. The five? Well, no new news here:
CMI
UNP
TGT
WAG
LOW
I prefer to have a concentrated portfolio, but not THAT concentrated. I'm thinking that I can manage to keep up with 10-20 positions (I also have a broad spectrum of wisdom tree etfs to cover emerging and intl markets, plus I hold individual issue bonds).
I'm still doing research on a few more, mostly those who have been paying dividends for a shorter time period like ACN, V, COH, DV, MSFT, NATI, SWY and WSM.
There are also some companies that I have little knowledge of, such as TJX, TXN, SU, SEIC, EGLD, RTN, JW-A, GK, DCI CHD, and AEL.
And there are some well known companies whose dividend 10 year dividend growth meets my criteria, or at least comes close, but whose recent increases have tailed off, like AFL, MCD, CHRW, ITW and INTC.
In all those cases, I will need to simply do the research and figure out which ones appear to be able to sustain the requisite dividend growth.
It is definitely a different way to build a portfolio, which is why my original screen as too limiting - I was trying to apply a bottoms up approach and it was not valid for the portfolio construct.