DGI Portfolio Report for May 2016

By | June 6, 2016

This report provides an update on my holdings, performance, plans and thoughts for my Dividend Growth Investing (DGI) Portfolio. I started this portfolio with an initial funding of $100,000 and hope to use this portfolio to help me achieve financial freedom. I’m running this portfolio like a fund manager who runs a dividend growth fund. I look for stocks that are a great fit for this portfolio, review the portfolio on a regular basis and make adjustments as necessary. Of course, I reserve the right to make any exceptions to buy or sell a stock. The results will be published here on Growing Money every month. I seek companies that have a healthy balance sheet and a competitive business advantage in the market, thereby protecting my principal investment. The dividend growth will help build a stream of growing income for the long term. If the dividends are sustainable and increasing over time, then naturally, the stock prices should follow and the total returns should be wonderful. This is a long term investing plan, which is a marathon and not a sprint, so do not expect any flashy words or colorful signs in these posts. It’s going to be a slow and steady climb to the top of the mountain. The strategy is to buy strong and healthy companies with dividends that are sustainable and increasing over time. All the dividends are automatically re-invested in the same companies. This portfolio will be reviewed on a regularly basis to ensure that the holdings are aligned with the goal of this portfolio.

Investment Objective
The DGI Portfolio seeks to provide, primarily, a growing stream of income over time and, secondarily, long-term capital appreciation and current income.

Investment strategy
The DGI Portfolio invests primarily in stocks that offer current dividends. The portfolio focuses on high-quality companies that have prospects for long-term total returns as a result of their ability to grow earnings and their willingness to increase dividends over time. These stocks typically—but not always— have a low dividend payout and shows a history of increasing dividends. The DGI Portfolio will be diversified across industry sectors.

Account Balance
Beginning Balance: $106,390.57
Ending Balance: $108,631.77
Net Gain/Loss: +$2,241.20 (+2.11%)

Portfolio Holdings:

Symbol Current Price Quantity Current Value Dividends (per share) Dividend Yield (%) Annual Dividends Prorated Monthly Dividends
VZ 50.9 0 $0.00 0.565 4.44% $0.00 $0.00
T 39.15 0 $0.00 0.48 4.90% $0.00 $0.00
JNJ 112.69 102.271 $11,524.92 0.8 2.84% $327.27 $27.27
O 60.09 205.146 $12,327.22 0.199 3.97% $489.89 $40.82
OHI 31.92 823.83 $26,296.65 0.58 7.27% $1,911.29 $159.27
IBM 153.74 101.874 $15,662.11 1.4 3.64% $570.49 $47.54
MIC 71.61 308.409 $22,085.17 1.2 6.70% $1,480.36 $123.36
WFC 50.72 201.504 $10,220.28 0.38 3.00% $306.29 $25.52
Cash $8,437.07
Total $106,553.42 $5,085.59 $423.80

Note: Options balance is not shown in this table.

Dividend Payouts This Month:

5/2/2016 VZ $4.05
5/2/2016 T $4.00
5/16/2016 O $40.82
5/16/2016 OHI $419.82

Month Total: $468.69

Lifetime Cumulative Dividends Received: $3,481.43
*This is the total dividends received since the inception of this portfolio in June 2015.

Portfolio Update

In this month, the DGI portfolio is starting to gain traction and the investments are starting to show strength. Once again, my primary focus is on income-generation and I will continue to focus on building passive or dividend income for the long term. Right now, most of the dividend growth stocks look fairly or overvalued so I will hold off on making new purchases.

MIC – Macquarie Infrastructure Corp (NYSE:MIC) has rebounded since the last big drop. Last month, I had hope to see this stock close above $70 by the end of May and it did. Let’s see if we can get some momentum here. I hope to see MIC close above $75 by the end of June.

IBM – International Business Machines Corp. (NYSE:IBM) has doing well in focusing and executing its turnaround plans. It has been buying back shares and acquiring new businesses. The share buy backs reduce the float and help boost up their EPS. Shareholders will own more of the company and eventually when the company turns around, the earnings per share will be compounded with the reduced float. Recently, IBM has announced an increase to their dividend this year. This stock does require some patience, but I think IBM will pay off in the long run.

O – Realty Income Corp (NYSE:O) is known as The Monthly Dividend company and it is arguably the safest and most wanted company in the stock market this year. The stock has defied gravity and kept soaring higher, making new all-time highs recently. This stock is now seen as a safe haven. Any signs of a market downturn diverts funds into this stock and only sends its price higher. I want to build a bigger position in this stock, so I do hope this stock drops soon so I can buy the dips, but it doesn’t seem like it will happen anytime soon. Any time this stock dips, the market sees it as a opportunity and the stock rebounds quickly.

OHI – Omega Healthcare Investors Inc (NYSE:OHI) is a great long term hold for a dividend growth portfolio. They have consistently increase their dividends and has a great business model. The stock has suffered a little lately but I think it’s a great opportunity for new investors to jump in or current investors to add to their positions.

WFC – Wells Fargo & Co (NYSE:WFC) is a new addition to my portfolio. The dividend yield is low at around 3% but I think with their dividend growth rate, the Yield on Cost should be nothing should of spectacular over the long term. I like companies that can grow their dividends at a fast rate over the long term and I think WFC is one such company. Also, if the Fed will raise the interest rates in the near future, WFC will benefit from it.

Options Strategy

I have been trading covered calls when the common stock makes a big move. I have learned my lesson and I will only play with these options when there is a big spread.

Short Term Goal – Year 2020
My short term goal is to build a $500 monthly dividend income on a prorated basis from this portfolio by the year 2020. I will make adjustments that are necessary to steer towards this direction. Currently, my monthly passive income for this portfolio is at $423.80, so I still have some way to go. These monthly updates will be constant reminders for me to stay focused and work hard on my goal. By making this portfolio opened to the public, I will hold myself accountable and show my thoughts and decisions to everyone. Good luck to me!

Happy investing!! Let’s build passive income for life!


 

2 thoughts on “DGI Portfolio Report for May 2016

    1. Sean Post author

      Thank you Investment Hunting. I still have a long way to go.

      Reply

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