Monday, November 20, 2017

2017's Dividend Increases

Dividend Gremlin here to discuss this 2017's dividend increases that have been received.  At this point in the year no new increases are expected to hit my account, though some may still be announced before the end of the year for 2018.  At this point these increases are not the driver of investment income growth, and they can be easily forgotten about.  However, though their present impact is minimal, longer term their impact will be both easier to quantify and undeniable.  The real power of compounding is not comprehended until much later in the game, which means that those who do not foresee this in the present will miss out on it in the future.

So far this year I have received a record fifty (50) dividend increases from a total of forty (40) companies.  The increases range from 0.2% at the low end given quarterly by Realty Income (O) to 16% and over given by Discover (DFS).  Of note, four of my companies had multiple increases including Bank of Nova Scotia (BNS), CIBC (CM), O, and Omega Healthcare (OHI).  These increases reflect growth coming from a wide variety of industries, products, and businesses.  All told they have added approximately $175 to all my accounts in terms of forward projected income.  It would take an additional ~$5800 invested at a 3% yield to nominally achieve that.

In addition, I experienced spin off one company, YUM China (YUMC), establishing its first ever dividend; chronicled earlier here.  That was exciting news, but there was one sore spot with a singular dividend cut coming from problem child General Electric (GE).  GE started the year off with a dividend increase, only to cut the yield by 50%.  Even with that dividend cut, my projected income is still significantly higher than last year (my above $175 total reflects this change). 

My stock holding diversity shows, in a positive light, that when one company gets out of line and cuts its dividend the impact is minimal.  There are so many others working out there to boost my income regardless of GE's failure to even maintain its dividend.  This is the second most important part of investing, that the rest of your portfolio keeps moving even if some parts fall behind.

I have discussed these issues with friends, who usually just scoff at these increases as being mere chump change.  That is their prerogative, but it will not alter my methods or progress.  Sure it is chump change now, but get back to me in a few years, see how you feel then.  It is my sincere hope that those of you crazy enough to read anything I post see this logic, and put on your running shoes because this game is a marathon not a sprint.

- Gremlin
Long O, DFS, BNS, CM, OHI, YUMC, and GE (😒)

2 comments:

  1. Nice list of increases Gremlin. I also share your pain on GE. Tom

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    1. Tom,

      Thanks for the comment. GE is indeed a pain, a problem child. However, the rest of the increases more than made up for its failure!

      - Gremlin

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