Sunday, March 3, 2013

Dividend Growth Portfolio, February 2013

Wow what a year 2013 has been so far. January and February have delivered solid returns for investors. To some degree, it actually scares me how well the stock market has performed. I fear that the exuberance may be too much too soon, perhaps even... irrational?

Nonetheless, it is very difficult, if not impossible, to determine where the market is headed in the short to medium term. What is clear, however, is that we are at or nearing levels unseen since 2007. Levels that also marked a market top in 2000. That should worry you, at least a little bit. Below is a 40 year chart of the S&P 500, and the triple top forming from 1999 to 2013 is quite obvious in the graph.

Thus, I want to protect myself somewhat against a correction that is overdue. Instead of selling and moving to cash, I'm attempting a strategy where I simply rotate into a mix of more defensive oriented investments. As you can see below, my dividends received is similar, but I've sold out of riskier investments, locked in profits, and moved to what I believe are fair or undervalued defensive businesses.

As you'll also see below, there were 3 companies that raised their dividend in February 2013. All 3 were increased around 10% (Canadian banks like TD typically raise their dividend every 6 months).

New Purchases
Southern Company - $137.20
Toronto Dominion Bank - $97.20
UnitedHealth Group - $87.55

Becton Dickinson - $108.90
Pason Systems - $96.00
CSX - $70.00
Cummins - $66.00

Intrinsic Dividend Changes
Rogers Communications - $29.12 (quarterly div +10.1% from 39.5 to 43.5 cents)
Coca Cola - $31.50 (quarterly div +9.8% from 25.5 to 28 cents)
Toronto Dominion Bank - $4.00 (quarterly div +5.2% from 77 to 81 cents)

January 2013 Annualized Dividend: $4567.44

+ $321.95 (from new purchases)
-  $340.90 (from sales)
+   $64.62 (from intrinsic changes)

February 2013 Annualized Dividend: $4613.11

End of 2013 Goal: $4700 to $5000
Whisper Goal: $5500

YTD Dividends Received: $449

2013 Dividends Received Goal: $4200
Whisper Goal: $4600

After 2 months, my portfolio has received intrinsic dividend growth of just over 2.5% vs Dec 31 2012, keeping me on target for an annual intrinsic dividend growth rate of 10-12% ex Citigroup. The return of Citigroup's normalized dividend is expected to add anywhere between 2% to 3.5% to the 10-12% target.


  1. You prices you put down for your purchases/sales are dividends for the year. I was confused by some of the numbers comparing to the current stock prices :) I shouldn't have let go of my Rogers shares... I am too impatient. Maybe, I should follow in your foot steps in some stock buys! Good job, that's a pretty good for dividend for the year. I hope to replicate just as well. Keep up the good work.

    1. yes that's right, since i use those numbers in the annualized dividend calculation from month to month. i've had my share of /doh moments. i feel investing is almost a process where you learn more about yourself hahaha. good luck with your trades! some seem very profitable!

  2. Second Agent Fang's sentiments, the dividend increases are giving you great value in your portfolio. The 3 tops are interesting. On the surface it would seem as if we've hit a major resistance again and will probably see a pull back in the short/med term. But the chart doesn't show P/E and I've heard that the S&P500 companies have more sales, and earnings today than in 2007. Hard to say what will happen now. But we'll find out soon enough :D

    1. you're right, the valuations now are much different than in 2000 and 2007. given that simple but critical difference, i think its possible we can push to meaningful new highs. i just feel its prudent to be cautious at this critical juncture, esp after the run since late 2012