2013 Reviewed

The end of the year is when many investors reevaluate how they did during the previous year. Dividend growth investing is an investing strategy where the investor buys stocks of companies that consistently pay and grow their dividends, then reinvesting those dividends to compound the income stream.

My primary goal as an investor is to build a well diversified stock portfolio that produces a sustainable and rising income stream. Below I will review the changes that happened to my portfolio in 2013.


Purchases
I started the year with 15 stocks, this reflects purchases I made in 2011, 2012 and one spin-off (ABT spun off ABBV). During the course of the year I made the following purchases:

1. Jan 14: GIS 37 Shares at $40.90
2. Feb 11: MA 3 Shares at $524.00
3. Feb 11: AFL 30 Shares at $50.23
4. Feb 19: WFC 43 Shares at $35.14
5. Feb 25: WMT 21 Shares at $71.00
6. Mar 7: WFC 41 Shares at $36.38
7. Mar 28: MSFT 53 Shares at $28.24
8. May 9: GE 66 Shares at $22.85 
9. Jun 24: DPS 33 Shares at $45.00
10. Jul 25: KMI 39 Shares at $38.67
11. Oct 9: DPS 35 Shares at $43.70
12. Nov 12: TGT 23 Shares at $65.50
13. Dec 31: KO 36 Shares at $41.35

For a grand total of $19,608.35. Most of this money came from deposits, but about $1000 came from dividends my stocks paid. The portfolio ended with 23 different positions.

Sales
I'm a buy and hold investor. I plan on holding my positions for decades, enjoying the dividends they pay me every three months. It's not a buy and forget strategy though, you have to monitor your positions, to make sure the fundamentals remain excellent and the dividends keep growing. This year I sold one company:

1. Sep 30: INTC 50 Shares at $23.00

The reason for the sale was the dividend freeze. I felt uneasy holding onto this Tech company and bought a beverage company with the proceeds.

Dividends
I received $1,068.62 in dividends from my portfolio. This is an amazing 55.31% increase compared to 2012 income, $688.06.

Dividend Growth
Below a table of the amount my current holdings paid in 2012 and in 2013:

Some observations. 
I took ABT and ABBV together, ABBV didn't pay a dividend in 2012 and ABT lowered its dividend. When you take both stocks together, you get a healty raise of almost 8% compared to 2012. ABBV paid out 5 quarters the same amount, I have to investigate this further.

MasterCard knocked it out of the park with a 90% increase. I'm expecting this to continue for the mid term. I expect MA to expand its payout ratio and pump the dividend in the foreseeable future. It's a shame the shares trade at a high valuation, I'd like to add more. For now I just hold the 3 shares.

PSX only paid out twice in 2012, that explains the 195% increase.
 Wells fargo is increasing its payout ratio after it got permission from the FED to do so. This dividend growth rate will not continue. I'm hoping for 10% increases the coming years, until the payout ratio is about 60%, management's target.

The average dividend growth rate is 23.65%. If we take out the 3 big ones (PSX, MA and WFC). The average is 9.94%. This is very nice. If I reinvest dividends, at a 3% yield, I'm looking at about 13% organic income growth. Meaning, if I wouldn't make deposits and just reinvest dividends, my income would grow at a 13% annual clip.


Portfolio
The paper value of my portfolio has grown considerably in 2013. Jan 1st, 2013 The value of my portfolio was $20,795.26. I ended the year with a portfolio worth $46,565.43. This represents an increase of 123.92%  As I said above, about $19,600 from the raise in value came from new purchases, the rest, about $6,000 came from stock price appreciation.


Conclusion
2013 was a great year for me. My dividend income grew considerably, the value of my portfolio grew more than a 100% and I deposited more than I could dream of.  Last but not least I overshot my goal for $1,000 in dividends!

How did your 2013 go?

Thanks for reading.

Latest Buy: KO

Right before the ending of the year I decided to buy some shares of this beverage behemoth.

Today's buy:

• 36 Shares KO @ $41.35

This purchase will add $40.32 to my yearly income. This is based on the $0.28 dividend KO pays every quarter, I'm expecting a dividend raise in February, so the real income amount is higher.

This company needs no introduction. It's the biggest beverage company on the planet. As far as I know, you can get a Coke in every country on the planet (except North-Korea). Coca-Cola is an invaluable brand name and the distribution network is irreplaceable. In the coming years, 700 million people will enter the middle class all around the world, this is where Coke's growth opportunities are.

The stock is a classic dividend growth stock, it has paid a dividend since 1919 and raised it dividend for more than 50 years. You can almost say, there are three things certain in this world, death, taxes and Coca-Cola's dividend every quarter.

The stock isn't cheap at 21x earnings, but in the last 15 years its price moved out of the stratosphere, in 1998 investors paid more than 40x earnings for a share of KO!

Thanks for reading

December 2013 Dividend Income Update

2013 is over. It was a great year for me. It was my 2nd full year of investing. My passive income was great. It's amazing how my passive income grows. Looking back to my first few months of investing, I was getting $25 a month. Now I pull in $100 regularly. Without further a do, here is the last income update for this year.

Dividends Received

• WFC: $25.20
• PSX: $10.53
• AFL: $21.83
• JNJ: $11.22
• NSC: $7.80
• IBM: $7.60
• CVX: $11.00
• TGT: $9.89
• MSFT: $14.84
• MCD: $22.68

Total dividend income for December: $142.59

My 2013 goal was $1000, I made it! This year total dividend income was $1068.62! I'm still not sure how high I'll set the bar for 2014. 

Thanks fo reading.

Recent Dividend Increases

The main focus of my portfolio is to purchase stocks that raise their dividends in the future. The stream of dividend will grow over time due to reinvested dividends, investing fresh capital and companies raising their dividend. This week three of my companies raised their distributions to their loyal shareholders.



AT&T (T) - Announced that its board of Directors voted to increase AT&T's s regular quarterly dividend by 2.2% to $0.46 per common share versus the previous rate of $0.45 per common share.

General Electric (GE) - Announced a 16% dividend hike. The Board of Directors agreed to raise the company's quarterly dividend to $0.22 per common share up from $0.19 a share.

Mastercard Inc (MA) - Announced on Tuesday that its Board of Directors declared a quarterly dividend of $1.10 per share, reflecting a $0.50 or whopping 83% raise over the previous quarter. On top of that, the Board of Directors also approved a new share repurchase program of $3.5 billion in share repurchases. This buyback program will kick in once the $514M remaining on an existing $2B authorization is used up.
With shares trading almost at $800 a share the company announced a 10:1 stock split. For every 1 share of MA I hold, I'll receive 9 extra. The dividend post split will be $0.11 dollar per quarter.

November 2013 Dividend Income Update

In the month November I opened a new position in TGT. I expected T to announce a dividend hike but it didn't came yet, any day now. After I bought TGT it pulled back some more, I'm contemplating buying more, it's one of the few stocks that seem fairly valued to me.

Here's the dividend update for November 2013:

Dividends Received

• GIS: $14.06
• T: $17.10
• MA: $1.80
• ABT: $2.80
• ABBV: $8.00
• KMI: $34.03
• PG: $10.83

Total dividend income forNovember: $88.62

My 2013 goal is $1000, so far I'm 92.60% of the way there, my progress is tracked here. I just need $73.79 in the next months to reach my goal.

Thanks for reading