At the age of 44, I left a job where deductions were made from my paycheck toward a pension plan, but I was not vested in the plan when I left the job, so I decided to place my contributions into an IRA and invest the funds in dividend growth stocks to try to receive an average monthly dividend income of $560 per month starting in December 2035 when I turn 65.
Based on dividend payment rates at the time, my average monthly income going forward at the beginning of last month was $66.40. In order to grow that monthly rate to $560 in a little less than 19 years, the monthly rate needs to grow by a little less than 12% per year, or a little more than 0.9% per month. Therefore the goal is to hit monthly payments going forward of $73.63 by December of this year. If the same growth rate occurs steadily throughout the year, then I would need to it to grow to $65.03 at this time.
The dividends in this portfolio are being reinvested directly into the stock the dividends are paid from. Currently, the overall effect of dividend reinvestment and dividend increases is falling short of my 12% goal. If I just take into consideration the most recent dividend increases within the past year for each stock, I can expect monthly average payments to increase by less than 10% per year, which comes from an average of 3% dividend payments and 6% dividend growth.
How will my goal be reached in the end if I am already not on track to reach it so early in the process? Over time, my hope is that the stocks I have picked will as a group increase their payments at a higher rate than 6% in the long term. In addition, investments that grow their dividends slowly and/or increase in price will be sold strategically to trade them out for stocks with higher dividends and/or higher dividend growth rates.
Here are the stocks in my portfolio that have higher dividend payments going forward due to changes in January:
Omega Healthcare Investors, Inc. (OHI) raised its quarterly dividend from 61 cents to 62 cents..
Meanwhile, the following stocks are paying more going forward thanks to dividends paid in January that were reinvested: EMN, HOG, HPQ, JCI, LM, M, OHI, and VIAB.
Overall, the average monthly dividend income increased by 12 cents to $66.52, an increase of only 0.2%. February might be a month where the average monthly dividend income will increase considerably, since 7 of the stocks in the portfolio could announce dividend increases in February as they did last year.
| Ticker | Shares | Avg Monthly Dividends | One Year Ago | % Change |
| AAPL | 5.052 | $0.96 | $0.88 | 9.62% |
| ABBV | 9.341 | $1.99 | $1.77 | 12.28% |
| ADM | 12.443 | $1.24 | $1.16 | 7.14% |
| ADNT | 1.000 | $0.00 | $0.00 | |
| AMGN | 3.058 | $1.17 | $1.02 | 15.00% |
| AMP | 5.111 | $1.28 | $1.14 | 11.94% |
| BA | 4.134 | $1.96 | $1.50 | 30.28% |
| BBY | 16.368 | $1.53 | $1.25 | 21.74% |
| BG | 9.165 | $1.28 | $1.16 | 10.53% |
| CAH | 7.042 | $1.05 | $0.91 | 15.99% |
| CAT | 7.283 | $1.87 | $1.87 | 0.00% |
| CCL | 11.159 | $1.30 | $1.12 | 16.67% |
| CMI | 5.172 | $1.77 | $1.68 | 5.13% |
| EAT | 10.207 | $1.16 | $1.09 | 6.25% |
| EMN | 7.187 | $1.22 | $1.10 | 10.87% |
| ETN | 9.327 | $1.77 | $1.71 | 3.64% |
| GEO | 15.328 | $3.32 | $3.32 | 0.00% |
| GILD | 6.075 | $0.95 | $0.87 | 9.30% |
| GLW | 27.667 | $1.25 | $1.11 | 12.50% |
| HOG | 12.342 | $1.44 | $1.28 | 12.90% |
| HPQ | 37.626 | $1.66 | $1.56 | 7.02% |
| INTC | 14.166 | $1.23 | $1.23 | 0.00% |
| IP | 13.520 | $2.08 | $1.98 | 5.11% |
| JCI | 10.059 | $0.84 | $0.97 | -13.79% |
| JPM | 8.172 | $1.31 | $1.20 | 9.09% |
| KSS | 11.381 | $1.90 | $1.71 | 11.11% |
| LM | 16.349 | $1.20 | $1.09 | 10.00% |
| M | 12.389 | $1.56 | $1.49 | 4.86% |
| MPC | 16.395 | $1.97 | $1.75 | 12.50% |
| NGVT | 2.000 | $0.00 | $0.00 | |
| OHI | 15.555 | $3.21 | $3.16 | 1.64% |
| PFE | 15.271 | $1.63 | $1.53 | 6.67% |
| PRU | 6.213 | $1.45 | $1.45 | 0.00% |
| PSX | 6.093 | $1.28 | $1.14 | 12.50% |
| QCOM | 9.236 | $1.63 | $1.48 | 10.42% |
| R | 10.252 | $1.50 | $1.40 | 7.32% |
| T | 15.761 | $2.57 | $2.52 | 2.08% |
| TGT | 7.116 | $1.42 | $1.33 | 7.14% |
| UNP | 6.150 | $1.24 | $1.13 | 10.00% |
| VIAB | 12.248 | $0.82 | $1.63 | -50.00% |
| VZ | 10.223 | $1.97 | $1.93 | 2.21% |
| WFC | 10.146 | $1.29 | $1.27 | 1.33% |
| WHR | 3.035 | $1.01 | $0.91 | 11.11% |
| WRK | 15.391 | $2.05 | $1.92 | 6.67% |
| WYN | 7.096 | $1.18 | $0.99 | 19.05% |
| TOTAL | $66.52 | $62.70 | ||
| Overall annual growth rate on dividend payments | 6.10% | |||
| Overall dividend yield -- reinvested | 3.12% | |||
| Approximate annual growth rate including reinvestment and increases | 9.41% | |||
| Annual growth rate needed | 11.98% | |||
| Behind goal rate by | -2.57% |
No comments:
Post a Comment