Fourth quarter 2012 has come to a close, it's time for me to update my progress page. In Q4, I received a total of $1,100.15 worth of dividends. This includes a few accelerated dividends from December, but excludes all special dividends. I may add a separate line for special dividends to keep track of that too.
Q4 was the first quarter I have ever broken $1,000! All told it was about a $120 worth of progress which was mostly due to new purchases, although at this point some of the past purchases I made are entirely from reinvested dividends. My life time total for dividends has now surpassed $5,650. If this isn't proof that dividend growth and income investing works, then I don't know what is.
In 2012 I tried to focus less on high yield and instead concentrate on companies who are likely to increase distributions at a faster rate. Most of the high yielders I did buy was just shuffling money around to better position my portfolio. You can see that YOC of my portfolio actually went down last year, even with all the dividend increases I enjoyed. I expect the trend to continue in 2013. The sweet spot I'm looking for are companies that pay 3-3.5% and are expected to grow dividends in the 7-10% range. I am weary of companies with super high dividend growth, say 15+%, as maintaining the expected rate is next to impossible long term. Projecting high dividend growth more than a few years in the future is a slippery slope. Compounding can work against us too!
For 2013 I will again be looking to add companies growing distributions at a healthy pace. This is not to say I'll abandon utilities and telecoms as I believe these types of companies have a place in diversified income portfolios.
Fun 2012 Statistics:
Total Dividends Received: $3,805.23
Total Deposits: $21,865 (I will NOT be able to maintain this pace in 2013!)
New Companies Purchased: 11
Existing Companies Added To: 6
Total # of Purchases: 25
Total # Sales: 4
Sales I regret: 1 (PSX, the company either lied or misspoke about the 5% div increase, drat!)
% Companies that increased div: 100%
Best Dividend Increases: NSC 16.9% / SBSI 16.7% / RTN 16.3%
Worst Dividend Increases: BWP 1.0% / T 2.3% / UNS 2.4%
Tax Sheltered Dividends (ROTH + MLP in taxable): 48.8%
Best purchase of the year(?): EMR at $45.55
Worst purchase of the year(?): INTC at $23.86