Since my last portfolio update, the market has continued to decline, exacerbated due
to the uncertainty and economic impacts of the War in Ukraine.
On top of this, the conflict has caused a continued increase in the price of Oil, which
benefits my energy stocks, but will increase costs for many of my other companies.
Despite this market chaos, my investing philosophy has remained steady.
I continue to collect and reinvest dividends while buying quality stocks for the long term.
In this video, I’m going to explain why I love the strategy of Dividend Growth Investing
and provide an update on the overall progress of my long-term dividend stock portfolio.
My name is Zach and you should leave a like and subscribe to the channel if you enjoy
the video.
These portfolio updates help me reflect on my investing strategy and hopefully inspire
others as well.
For research, I use DividendData.com, which is a website I’ve built over the past year.
It allows me to track my portfolio with insights many brokerages don’t provide.
I can analyze my dividend income, as I make progress towards financial independence.
Also, I can get news on my stocks, Calculate Valuations with various methods, and research
in-depth fundamentals of companies.
The research section is my favorite by far.
I basically built everything I wanted to see about a company.
There’s massive historical data, with a nice combination of graphs, tables, and growth
rate calculations.
I may be biased, but I love this tool.
It’s only going to keep getting better.
DividendData.com has been available as a free beta test, which I’ve been using to improve
quality and add new features.
However, the time has come to transition to a paid service.
It’s available for $4.99 monthly or $49.99 annually.
The annual plan is over a 15% discount.
This will help maintain and fund improvements to the site.
If you’re a returning user, you log in the same as normal, but sections of the site will
be locked until you pay.
Navigate to the new ‘Payment Settings’ page, select a plan, and follow the checkout
process.
If you’re a new user create an account and then follow the same process.
The link to DividendData.com is in the description and pinned comment.
Now, let’s dive into my portfolio.
My current dividend portfolio value is $105,382, which is a 24.85% return on dollars invested.
This is down from the beginning of February when I had a 30.96% total return.
My Energy stocks have climbed, while nearly all my other stocks have seen a decline.
Exxon Mobil led the charge and is now the highest valued stock in my portfolio at $12,964.
I have a total return of 129.64%.
Chevron has increased as well and my total return is now 98.24%.
My total return of Enterprise Product Partners is 44.63%.
With high oil prices, Exxon and Chevron are going to print money.
I’m not buying anymore of these energy stocks at current prices, but I am reinvesting dividends
still.
The only other stock that made moves upward was Kroger.
It increased over 20% to $55.89.
My total return is now 57%.
I love the company long-term and think they’re making great investments in automation, delivery,
and online shopping.
However, I would definitely wait for a sizeable dip before buying more.
Nearly all my other stocks are down.
Disney has fallen to my second largest position and I’m now negative 14% overall.
They just had a great quarter and their domestic parks hit all-time record earnings.
I made a video discussing this called ‘Why Disney Stock Crushed Earnings’.
However, that seemed to not matter as the stock has fallen to $130.
If you’re interested in Disney Stock this may be an attractive entry point.
I bought some and would buy more.
I’m down 9% on AT&T.
Same story as usual.
Business fundamentals have been performing positively, but it seems to be stuck until
the Warner Media Spinoff goes through.
I still think it’s a great value.
Microsoft has seen a nearly 20% decline from all-time highs.
I’ve been buying the dip.
Apple even fell recently to the lowest price in months.
Walgreens has fallen and is at an attractive price point.
Kimberly-Clark has fallen to $117, which is its lowest price in years.
You could argue this is deserving since their margins have been crushed by inflation, decreasing
their earnings.
However, the stock is now trading at a 4% dividend yield which is great for a reliable
dividend grower like KMB.
I’m in wait-and-see mode since I already have a sizeable position.
If you don’t own any, this could be an attractive entry point to pick some up.
3M is another stock at a great value right now.
Definitely worth considering if you’re looking for a great long-term buy with consistent
dividend growth.
Visa and Intel are some of my other recent buys.
There are so many stocks at a good value right now.
Frankly, I have way more ideas than money available to invest.
Here are the buys since my last update.
I bought 1 share of 3M at a cost of $149.80, 11 shares of Intel at a cost per share of
$45.39, 3 shares of Microsoft at a cost per share of $273.32, 2 shares of Walgreens Boots
Alliance at a cost per share of $44.24, 3 shares of Visa at a cost per share of $197.28,
and 2 shares of Disney at a cost per share of $138.03.
In total, I invested $2,425.41.
On top of these buys, I have my dividend reinvestments, which really stack up over time.
Some of these are significant.
With Exxon, I was able to acquire 1.57 more shares.
In my history with the stock, I’ve gained 14.67 shares of Exxon from dividend reinvestment.
These are labeled DRIP Shares.
Reinvested dividends buy more shares, increasing my future dividend income, and creating a
compounding effect.
DRIP Shares are really a part of my total return, not a cost.
This is something most brokerages don’t show since for tax purposes it’s considered
to be part of your cost basis.
But Zach what if I collect my dividends as cash and selectively reinvest?
Well, that is still reflected in your overall total return.
If you measure it off of your initial dollars invested.
This is the money you contribute to your account.
If you think about it, all dividends generated and reinvested are really part of your return.
This is another issue with most brokerages since they consider reinvested dividends to
be part of your portfolio cost basis.
Let’s look at the diversification of my portfolio by current value.
Consumer Defensive is my largest sector, followed by Energy, technology, consumer cyclical,
and communication services.
Energy is the big mover up here.
Let’s see how this translated to my dividend income.
In total, I’ve earned $5,074 in dividends and $858.72 so far in 2022.
This graph shows my dividend income month by month.
You can see the growth over time.
The orange line is the 3-month rolling average, which was over $300 at the end of last month.
This month is incomplete but will be my highest month ever when finished.
I earned $328 in February and $293 so far in March.
Here you can see all my dividends earned in that period.
Notable ones include $260 from AT&T, $51.43 from EPD, $17.23 from Kroger, $19.95 from
the J.M.
Smucker Company, $27.90 from Chevron, $132.96 from ExxonMobil, $16.81 from Microsoft, and
$57.78 from Walgreens.
Here are my upcoming dividends.
Big ones for April are Kimberly-Clark, Federal Realty, and the Altria Group.
So why do I love dividend growth investing?
First, let’s define that.
It’s a strategy where you buy companies that consistently pay dividends and have a
track record of reliable dividend growth.
There are many factors to consider here.
The dividend growth rate, current yield, Payout Ratio, etc.
Ultimately, the ability to pay dividends will be downstream of business earnings.
So it’s important to put your primary focus on the company itself.
Look at their business fundamentals.
Companies can be in very different situations and that’s all part of the game of how to
value stocks.
That equation of how you balance current earnings and the future earnings power of a business,
discounted back to the present day.
But this is not a video about how to value a business or pick dividend stocks.
What is it that I love Dividend Growth Investing?
To start, I love that it builds a compounding source of passive income.
This is independent of stock market price volatility.
You’re building this stream of income, which grows from 2 methods: Dividend Raises and
Reinvested Dividends.
Not only do the companies grow their dividend payments year after year, but you can reinvest
those dividends to acquire more shares, increasing your future income, allowing you to buy even
more shares, creating a virtuous cycle.
Think about it.
A compounding source of passive income.
In my opinion, this is one of the best strategies to reach financial independence and the best
retirement strategy.
You allow the money to continue compounding when you’re working and live off the dividends
when you’re retired.
The best part is that you don’t have to sell off your ownership in companies to benefit
from your investment gains.
You continue owning valuable businesses and increasing your overall earning power.
This lets you build sustainable generational wealth.
The other major benefit is the psychological shift.
Dividend Investing puts you in the mindset of a business owner.
You don’t get caught up in the price volatility of the market and trading stocks.
Instead, You focus on the business itself and the cash flow it generates.
This is a key shift because that is what determines the value of a business over the long term.
There are plenty of great companies that don’t yet pay dividends, but dividend-paying stocks
are a subset of cash flow generating businesses.
A focus on this strategy shields you from speculation on unprofitable stocks.
When you think like a business owner, that will help you make better long-term decisions.
With the strong majority of my investments, I follow a dividend growth investing strategy.
At a minimum, this will help me reach financial independence by retirement, but it could have
far greater impacts.
Eventually, I want to get to the point where I can be reinvesting a high-paying salary
every year from dividends alone.
Think of the massive compounding at that point.
The dividend snowball is rolling.
Thank you for watching Dividend Data.
I’d greatly appreciate it if you leave a like and subscribe to the channel.
You can sign up for DividendData.com to use this software and join a discord community
of like-minded investors.
If you follow me on Twitter, link in the description, you can real-time updates of my buys and dividends
coming in.
Link in the description.
Please leave a comment below and thank you for watching!