Growth for My Dividends

By | September 21, 2015

I realized that the dividend growth is an important factor for a dividend growth portfolio. I have shifted my focus to growth on dividends now and will look at this figure more closely from now on. I did some research and analyzed the stocks in my DGI Portfolio to see their rate of growth. I based the growth on the most recent 5 years to see determine the growth factor. This model strictly focuses on the growth of the dividends over time and does not take into consideration the yield of the dividend.

Below are the results:

Symbol Dividend Growth (5 year)
CVX 8.25%
VZ 2.99%
T 2.28%
JNJ 6.79%
GSK 5.33%
O 5.76%
ED 1.78%

From the results, I can see that that some of the dividend companies that I own don’t have very strong dividend growth. For example, ED, is a great and stable company, but it’s not a good growth prospect. Of course, I think ED will be around for a long time, it’s not going to go bankrupt, but the dividend growth model shows that this company doesn’t have a history of fast dividend growth. It’s a safe company, it’ll help me sleep well at night, but it won’t make me rich.

I would have to reconsider how I buy stocks in my DGI Portfolio. I would like to focus more on their dividend growth rather than the current dividend yield. It makes sense to weigh more on the dividend growth, because, over time the growth would win over the temporary higher yield. I may have to sacrifice some yield in the short term, but I believe the dividend growth could make up for the difference and play a bigger role in my dividend income over time. In the future, I will take into consideration of the dividend growth rate when adding a stock to my DGI Portfolio.

Leave a Reply

Your email address will not be published. Required fields are marked *