October 2016 Dividends Received

It is not November. I usually tally up the dividend checks I received in the previous month. I have received paychecks from the following companies listed in the table below across all my brokerage accounts. The dividends received this month was a record high. The dividend engine is churning!

In the coming months my dividends for particular months will be much less than other months, so the bar graphs will fluctuate more going forward. This is because I rebalanced my portfolio and have more concentration of dividend payers in certain months. However, I expect that the monthly moving average of dividends paid will continue to increase steadily over time.

The biggest payer was Altria and Philip Morris this month. Thank you MO and PM.

Ticker	Total	Taxable	Roth IRA	401k
ADP	$22.48	$22.48
KHC	$54.75	$54.75
KMB	$53.56	$33.32		$20.24
KO	$42.16	$42.16
MDT	$24.30	$12.26		$12.04
MKC	$17.63			$17.63
MO	$132.14	$88.22		$43.92
NKE	$11.19	$11.19
O	$31.95		$31.95
PM	$107.34	$77.18		$30.16
RAI	$53.85	$45.04	$8.81
SYK	$10.00	$6.58		$3.42
XEL	$30.32	$30.32
	$591.67	$423.50	$40.76	$127.41

Recent buy:

Today I sold my VSM shares which were spun off from the parent company APD (I got a free trade from my broker). At the moment VSM doesn't offer a dividend and it's a small 2 billion dollar company. I'm sure VSM can grow being such a small company in the coming years but I would rather deploy my capital into more solid positions with dividends, and I had no intention of adding more to VSM. Once the selling closes I will use my VSM proceeds to buy more APD which has pulled back more than 15% after the spin off and I do not think APD will ruin their dividend streak, which means the yield is becoming more attractive now at 2.6%. I'll purchase APD next week.

Tomorrow morning the orders for these companies will be placed:

BDX      BECTON DICKINSON & CO              $200.00
GIS      GENERAL MLS INC COM                 $200.00
PM       PHILIP MORRIS INTL INC COM        $200.00

Slow and steady wins the race

Visa dividend hike 18% !

Visa today announced a hike of their quarterly dividend payable in December from 14 cents to 16.5 cents. That is a 17.9% hike. Earlier this year I predicted a 15% hike so this increase is very welcomed.

Visa is my 4th largest position right now. Although it has a low yield I am betting on the super long term. Over time I think their yield % will grow and their dividend increase will be rapid until their business becomes a slow grower like a old blue chip. By then my position in V should have nicely grown to keep up with the huge dividend hikes.

Mastercard has also done incredibly well this year. They have boosted their dividend paid in February  of this year to 19 cents from the previous 16 cents. This is 18.8%, very similar to Visa.

This year the largest dividend hikes are from Reynoilds 28% (large increase due to their merger with Lorillard), TJX 24%, Mastercard 19%, and Visa 18% (comparing new quarter payout vs previous quarter payout ).

Recent buy: MO

Added 48 shares of MO to my Roth IRA. This is around $3000. I think that will do nicely by the time I grow old and withdraw from my IRA accounts. MO and its high dividend can grow tax free for many decades to come :)

MO has a yield of 3.9% right now with a steady increase rate of 8% year over year.
The forward P/E is 18.8 which I don't think is too bad in today's low interest rate environment.
MO at this level is 10% off its highs.
The BUD acquisition of SABMiller is now complete and MO now owns nearly 10% of BUD. MO has also increased their share buyback to 3 Billion after this announcement which is fantastic. I expect great things with their business with BUD.

Upcoming buy: V

The order has been placed for $1200 to be added to Visa on Tuesday morning.
Visa is my favorite high quality high growth company. The credit rating and financial safety is very high. They operate a very high margin business as the middleman of all cashless transactions in today's modern society. In the future I believe everybody will move to cashless transactions. Who likes to carry bills and coins anyways.

Visa has incredible earnings and dividend growth prospects and in my opinion Visa is rather recession resistant. Looking forward, I find Visa of good value right now even though it's hitting new highs. For those that don't need the yield right now and want a forward looking champion, Visa is best of breed.

September 2016 Portfolio Summary

The purpose of this portfolio is income replacement. I hope to use the passive income I receive every month from my investments to cover my rent, utilities, entertainment, transportation and food. The crossover point is when all of the expenses necessary for me to survive and enjoy life can be covered without having to work at all. I want my investments to grow consistently and be less cyclical. I want my dividends from my portfolio to grow by themselves every year without me having to contribute more. The strategy I am employing here is dividend growth investing. I am more concerned with the dividend and the protection of that dividend. Share price is a secondary thought to me after I have purchased shares of a company. As long as the payout ratio is healthy and the company's underlying fundamentals are intact, I will continue to hold and deposit those quarterly dividend checks.

Markets were shaky in the early of September but overall nothing really happened. There were no changes to the Fed reserve's interest rate. The dollar is still strong. Oil prices have rebounded up to $50 from the low 40s.

September 2016 Dividends Received

September dividends received are listed below. I no longer hold PX, XOM, or UTX. The rest of the dividends were reinvested back into their stock.

Ticker	Total	Taxable	Roth IRA	401k
BDX	$19.65	$19.65
CHD	$20.09	$9.08		$11.01
D	$65.07	$5.57		$59.50
HD	$16.19	$16.19
JNJ	$99.75	$72.55		$27.20
MCD	$28.34	$28.34
MMM	$38.38	$38.38
NEE	$23.18	$23.18
O	$31.77		$31.77
PEP	$57.06	$32.98		$24.08
PX	$12.75			$12.75
RAI	$8.81		$8.81
ROST	$8.68	$8.68
SO	$60.72	$60.72
TJX	$8.05	$8.05
UTX	$19.96	$19.96
V	$11.20	$6.30		$4.90
XOM	$41.69	$32.36	$9.33
	$571.34	$381.99	$49.91	$139.44

Recent buy: MO, NKE, SBUX, V ...

The trades have been configured and the cash is ready. They will go live at around 11am Eastern Time on Tuesday (10/4) morning. This week a larger order will be placed as I finish re-balancing my portfolio and collecting tax loss harvesting for 2016.

In today's world, high yield names are very over valued due to the low interest rate environment. Many blue chip high yielders have ridiculously high P/Es when they have slow to non-existent growth. Just look at Kimberly-Clark, Procter & Gamble, 3M, ADP, Colgate Palmolive... I felt that if I have to "pay up" for such high P/E in slow growth why not just pickup the ridiculously high growing companies (growing earnings, growing revenues, growing dividends) with the same P/E. The downside is that the fast growers have a lower yield as their payout ratios are usually lower to sustain their expansion.

Summary:
The purchase this week was primarily funded by re-balanced funds from slow high yielding names. I wanted to pursue more growth in my portfolio since my portfolio was heavily defensive and I feel that for my age (26) this was too conservative. My purchases recently emphasize potentially higher share price growth, higher dividend growth, higher earnings growth, and lower yield. I still try to maintain a decent yield by purchasing some higher yielding names like Altria. Altria has done historically extremely well (last 60 years) and has been able to maintain a high dividend while doing so.

I also purchased a $9100 stake in Home Depot last week and HD yields decently around 2.2% and is also expected to have high growth in revenue, earnings and dividends. I really like companies that have high yields and still grow the bottom line which leads to share price growth. You get the best of both worlds (growth and periodic dividend payments for waiting) but they are hard to find. I still want to try and maintain a overall portfolio yield of around 2.5-2.6% going forward so my Altria and Home Depot purchases helped move the yield needle up while still ensuring I get good growth.

This week I purchased hyper growth companies such as Nike, Ross Stores, TJX, Starbucks, MasterCard, and Visa. Their yields are around 1-1.5% and the dividend growth is over 15-20%. Around $14,600 this week will go to these very low yielding companies. These companies have rapidly growing earnings and revenue. The downside is that many of these companies have P/Es over 20 so they may experience P/E compression which will drive shares down even if the business is still growing. This can be seen with Nike and Starbucks recently as their P/Es have shrunk despite still growing the top and bottom line nicely. I am taking this opportunity to add to Nike and Starbucks. If they decrease further it will be more incentive to add.

I added a large stake in Altria since it has been a stable performer for the last 50 years while maintaining a high dividend. Altria has pulled back and now it's close to a 4% yield. They grow the dividend at a huge 8% rate while keeping a very steady 80% payout ratio. Cigarettes is extremely anti-cyclical and the user base is very loyal. Even if the US crashes in to a recession, tobacco usage will remain steady.

Recent buy: Home Depot

Today 71 shares were purchased in Home Depot for around $9166.1

Home Depot yields 2.14% at the moment and has been able to grow the dividend by 17% year over year.

I plan to have my remaining purchases in other companies executed on Tuesday and then I'll update my portfolio page. Altria is continuing to correct and Nike has took a nice pullback. Starbucks remains at valuations that I still like considering they grow the dividend very fast.

Recent sells and future buy targets

Today I have shaved off profits off of SO, T, and VZ. My capital gains were nice on SO and T since I held them long before their long climb up and the flight to high yield. I still hold positions in all 3. These 3 positions I classify as very slow growth and they are great companies but I am overweight in slow positions and I want to take more growth risk as a very young investor.

SO: Sold $3257
T: Sold $5165
VZ: Sold $3871

Last week I have done some work categorizing my portfolio into 5 categories. The growth numbers below are averages total returns with dividends reinvested using YTD returns for past years spanning 3, 5, 10, and 20+ years  (however far back the data can go) on each of the category's stocks that I have invested. I place more emphasis on more recent 3 5 and 10 year trends. For example, Very high growth represents the group containing (HD, MA, MO, ROST, SBUX, V, HRL, RAI) in my portfolio. Although past performance cannot predict future performance, they do give an idea of which categories certain companies fit under. Additionally companies for the most part continue from the past 3 to 5 years momentum barring an economic disaster. For example AT&T is slow and steady while Ross Stores is a high growth company.

- Very high growth   (average 20-22% growth)
- High growth           (average 15-19% growth)
- Medium growth     (average 12-15% growth)
- Slow growth           (average 8-12% growth)
- Very slow growth   (average 6-8% growth)

For this year I am re-balancing my portfolio to be around
- 50% Very high growth and high growth
- 25% Medium growth
- 25% Slow and very slow growth
50% will be responsible for growth and 50% will provide the foundation.

I took some time to sit down to look at growth trajectories and past performance for my various holdings. I analyzed the EPS growth, dividend growth, cash flow growth, ROIC, and P/E trends relative to past P/E. I grouped my portfolio picks into various names into those 5 categories which I color coded below.

Notice that the high growth names are usually those with lower yields and high dividend growth, such as ROST and Visa. Altria (MO) and Realty Income (O) are sort of exceptions since they have produced immense returns while maintaining a high yield. The medium growth are many of your staple dividend growth names but they do not have high yields, many have around 1.5-2.5% yield. The slow growth areas belong to high yielding names that are very stable blue chips. This category holds most of my highest quality blue chips.

I will be adding to the neon green and dark green categories which are growth in the coming days since I have a large cash position waiting to be re-balanced
.
Names that I am eyeing to add in the next few days include:
MO, HD, NKE, V, MA, SBUX, ROST, TJX
I find NKE and SBUX undervalued. HD and MA are fairly valued. The others are on the expensive side but appear worthwhile if one is paying up for future earnings.

Recent sells: Rebalancing

I have been performing reallocation of my portfolio to overweight in a fewer selection of my favorite companies with consistently higher growth.  My portfolio is at a stage where my core positions are very sizable and I want to have more allocation in growth since my base foundation is already set. Since I am young and many years away from retirement, I do not want to be too conservative in only core names.

I plan to eventually have heavier weightings in fewer stocks that I have done extensive research for and favor, instead of having all of my stocks in many tiny weightings. Diversification is important but I have found that is dilutes results if one has done extensive homework. For those that do not like to research stocks everyday and prefer a more passive approach, I recommend heavy diversification.

I have received $100 bonus by my broker so I used some of that to fund sells.

Taxable account:
XOM - $3623  (complete exit)
ABT - $4509  (only selling partially)
PG - $4567  (only selling partially)
UTX - $3116 (complete exit)

Tax-sheltered account:
PX - $1978 (complete exit)
D - $2689 (selling partial)
JNJ - $3322 (selling partial)

Recent buy: MO

Since MO is correcting I added to MO. It yields 3.9% and has a 8% dividend growth rate with a dividend that is basically covered with a payout ratio around 74%. With the SABMiller deal coming to close hopefully soon, I find MO attractive.

I only used $300 this week to add to my position.

I plan to move some of my stock holdings around next week to overweight in select dividend stocks that I find provide potentially higher returns. For example, MO is one of the companies I want to be overweight in. I am doing the re-balancing since I am moving the bulk of my funds from Capital One to Fidelity and Fidelity is offering me free trades for signing up. I will also take this time to do whatever tax loss harvesting I can for 2016.

I'll create a post on what I decide on swapping in the coming days.

Some ideas for my purchase next week

Next week will be a smaller buy. I'm targeting $1000 total spread around a few stocks. Below are some of my ideas for stocks that have corrected recently and are yielding high amounts.

There is definitely a sector shift going on right now away from Consumer Staples, Utilities, and REITs into less high dividend sectors like Industrials and Technology. Big dollar fund managers are most likely cashing out their profits in these sectors and sector rotating to more growth sectors. Dividends are also becoming less "sexy" as talks of interest rate hikes are floating around the press. That's perfect for me since many of my favorite companies on my watch list are in Consumer Staples, Utilities, and REITs. REITs are still expensive so I don't have any names yet, although definitely pulling back. I have identified some names in the Staples and Utilities space below.

One of my favorites. Altria (MO) provides a very high yield and a high growth as well. It has corrected around 9% and any dip in Altria to me is a time to add. Altria yields a high 3.9% and has been consistently increasing the dividend at a 8% clip. Altria sells tobacco, an addictive product that is recession resistant and has a loyal userbase. I don't condone smoking but as an investment I recommend Altria. Altria is one of the well known dividend aristocrats with a 47 year dividend raise history (keep in mind they have spun off a lot of companies over the last several years so some may not consider Altria a dividend aristocrat).

Recent buy: ABT, GIS, KMB ...

Tuesday morning at around 11am Eastern time, I sent in orders for the following companies below. I pay $1 per company buy so this week I will spend $7 total.

Your Plan Investments

Symbol	Description	Total
ABT	ABBOTT LABORATORIES	$400.00
CLX	CLOROX CO	$403.00
GIS	GENERAL MLS INC COM	$400.00
KMB	KIMBERLY CLARK CORP	$450.00
SJM	SMUCKER (JM) CO THE	$450.00
WEC	WEC ENERGY GROUP INC	$450.00
WTR	AQUA AMERICA INC	$450.00

What I'm doing on this recent pull back

The Fed is tripping people up again. Fear of a rate hike sent stocks spiraling downwards today. I opened my monitor in the morning and couldn't help but grin. Before any down turn, each investor should have a shopping list already of top companies they want to some day own or add to.

Market dips are opportunities. While most are scrambling in fear and the news is spouting SELL SELL SELL, this is a great time to be rational and buy high quality assets at a discount. I look forward to sales since it helps boost how much actual dividend income I can add every week.

I had my shopping list in my head already and I'll share some of my favorite companies that I hope to add in the coming days. Stocks are likely going to continue falling. Those that play with margin will be getting margin calls and will be forced to sell, continuing the downward spiral. Since I am terrible at timing bottoms, I just add bit by bit when stocks pull back from their all time highs.

I currently have a bit over $12,000 in US Dollars and am looking forward to adding as stocks continue to fall.

Upcoming buys: WTR, NEE, WEC ...

Since Monday is a national US holiday, my weekly reoccurring trades on my brokerage account (1$ per transaction to buy) was set on Friday and will be executed Tuesday morning. The orders I will be placing are the following. They are all utilities.

Your Plan Investments

Symbol	Description	Total
NEE	NEXTERA ENERGY INC	$400.00
SO	SOUTHERN CO	$200.00
WEC	WEC ENERGY GROUP INC	$500.00
WTR	AQUA AMERICA INC	$500.00
XEL	XCEL ENERGY INC	$500.00

August 2016 Portfolio Summary

Another month has passed. Another update. The portfolio in August has stayed relatively flat. The S&P500 similarly has stayed relatively flat. My dividends have been growing and my portfolio doesn't increase constantly but overall it is at a very high level compared to previous months. Most of the growth can be attributed to my weekly contributions; however, the large run up since March until now certainly has helped my portfolio's total value.

I am not as concerned about my portfolio's value as much as the dividend safety. As a dividend growth investor, I am more concerned about how much money I can rake in each month from dividend checks. And how much this dividend payout grows year after year by itself. It's all about dividend payout, dividend growth, and dividend safety. Price is just gravy since I plan to never sell my assets unless the business fundamentals have blown up. Price will take care of itself as dividends continue to increase and the payout is healthily covered. This is similar to owning a business or owning a rental property. There is no need to know how much my factory's current market value is worth or how much my rental apartment is worth on Zillow as long as my ultimate goal is to collect fat checks every month after producing my goods and services.

My goal is to ultimately be able to live off of my dividend. I want my dividends to grow by themselves without me having to contribute. Each company needs to continue increasing its dividend year after year. This is why I invest primarily in dividend aristocrat companies or companies with over 25+ years of continuous dividend increases. These businesses have survived more recessions than one can count off the top of their head. The strong often get stronger. Those that have survived through the tough times come out tougher. I want to own businesses with experience and resilience, not the hot fashionable new guy on the block.

I hold a diversified basket of high growth low yielding dividend paying stocks and also a group of lower growth but higher yielding dividend paying stocks. Overall, the two types average out and I get around a 2.7% yield at a 9% dividend growth per year. This is a total income growth hitting close to 12% a year.

Since I am in the accumulation phase and am no where near retirement, I contribute heavily into my portfolio. Nearly all of my income growth right now is due to my weekly contributions. As the portfolio gets very large such as in the 7 figure range, my weekly contributions will be begin to be dwarfed by the portfolio's daily gyrations and monthly dividend checks.