Dividend Growth Index

Dividend growth investors, you don’t have to wait any longer to find great dividend growth stocks; The Dividend Guy Blog along with my fellow bloggers are launching the Dividend Growth Index next week!

 

What’s the Dividend Growth Index?

I was looking create a group project with other dividend bloggers but didn’t want to post a stock picking contest. The purpose of dividend investing is to hold your stock long enough to benefit from the power of dividend growth. Therefore, hosting an annual stock contest didn’t make much sense to me.

This is why I came up with the idea of gathering a bunch of dividend bloggers together and ask them about their favorite stocks. Each blogger picked 3 stocks that they like or presently hold. With all the stocks, we have created a portfolio; The Dividend Growth Index.

We will follow the dividend growth index on a quarterly basis by presenting the overall portfolio and each blogger will comment on their 3 stocks. They will follow the companies’ financial performance along with stock value and dividend yield, payout, etc. Therefore, by following any of the participants, you will get the big picture of the index and by reading each of our posts, you will be able to follow each stocks more closely.

Dividend Growth Index Rules

We start the Dividend Growth Index with stock prices on September 23rd, 2011 and will update our performance on a quarterly basis (September 30th, December 31st, March 31st and June 30th).  We will have a “virtual cash account” where our dividends will be reinvested. Once a year, each blogger will make the decision to reinvest those dividends into one of their 3 stocks.  We do not take into consideration transaction costs, inflation or taxes. It makes it easier to follow and leaves less open to interpretation.

Who’s part of this project?

I’m very proud of the crowd I was able to gather around this project. Each blogger is an experienced investor and has some great dividend posts under their belt. So here we go!

Dividend Monk

An experienced investor since 2006 and blogger since 2010, The Dividend Monk sees himself as “a minimalist with a sharp focus to build wealth with a responsible, long-term view. He views money as a valuable resource, and resources can help you achieve your goals and increase your options in life, whatever they may be.”

Dividend Mantra

A frugal and well disciplined investor (he saves up to 50% of his income!). Dividend Mantra started his blog this year. He is relatively new to dividend investing but surely puts a lot of effort into it!

Dividend Ninja

Before I even started to read his first post, Dividend Ninja caught my attention by his cool name. He “converted” to dividend investing after the crash of 2008 and then left the world of mutual funds to the much better world of dividend growth.

The Wealthy Canadian

Jason, aka The Wealthy Canadian authors this new blog since July 2011 but he is no rookie blogger. And he is not new to investing either. The Wealthy Canadian certainly deserves a read and I’m sure you’ll head to his blog if I tell you that this guy is semi-retired at the age of… 33!

Passive Income Earner

The Passive Income Earner is another very solid dividend investing blog. This blog has grown significantly in 2011 and I wouldn’t be surprised to see his name in the newspapers shortly ;-).

My Own Advisor

The last but not the least, Mark was once called “financial cents”. My Own Advisor has been running since 2009 and covers dividend and index investing. Another great resource for dividend investors!

And myself; The Dividend Guy Blog!

I guess you know me already so I don’t have to introduce myself ;-). If you are new to this blog, I strongly suggest that you take a look at my Free Dividend Investing eBook and sign-up for my free newsletter ;-).

The Dividend Growth Index:

So here’s the Dividend Growth Index! As you can see, the portfolio is well diversified between US and Canadian markets. We also tried to pick stocks in different sectors.

 

NameCompany NameTickerStarting PriceDividend Yield
My Own AdvisorAbbott LabsABT-US$50.763.80%
ScotiaBankBNS-T$50.734.20%
CML HealthcareCLC-T$9.208.40%
The Dividend Guy BlogIntelINTC-US$22.163.80%
Coca-ColaKO-US$67.422.80%
National BankNA-T$66.984.20%
The Dividend MonkEnergy Transfer EquityETE-US$36.096.30%
NovartisNVS-US$53.734.00%
Wal-MartWMT-US$50.802.90%
Dividend NinjaHusky EnergyHSE-T$22.265.50%
PepsiCoPEP-US$60.343.40%
StaplesSPLS-Q$13.223.00%
Passive Income EarnerCanadian National RailwayCNR-T$67.342.00%
Canadian National ResourcesCNQ-T$30.231.20%
AflacAFL-US$31.463.80%
Wealthy CanadianRoyal BankRY-T$46.094.80%
Daylight EnergyDAY-T$5.7610.60%
Progressive Waste SolutionsBIN-T$21.682.40%
Dividend MantraConocoPhillipsCOP-US$62.514.20%
Philip Moris InternationalPM-US$63.814.80%
Procter & GamblePG-US$61.253.40%
Avg Dividend Yield4.26%

What’s next?

Next Monday, I’ll comment on my 3 stock picks, tell you why I picked them and I’ll provide additional information on their most recent financial results. It should be pretty interesting to follow the index over time!

 

What do you think of the Dividend Growth Index? Do you own any shares of these stocks already? Do you have any questions regarding our stocks?

disclaimer; I own shares in NA, BNS, KO, INTC, HSE,

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Comments

  1. says

    This is an intriguing idea. I’ll definitely be following along to watch the progress of the portfolio and methodologies of the investors. The Canadian yields are particularly interesting to me as a way to diversify outside of the American stock market.

  2. Ted says

    It is timely ( be defensive ) considering the current market turmoil. Personally of interest to me since I invest only in dividend paying stocks.

  3. Clifford Wiebe says

    This is something I’ve never understood. CML Healthcare is paying out at 5.4X its earnings. It makes $0.14 a share and pays out $0.75 a share. How can anyone, let alone a professional advisor include a company like this in their picks for an investment?

    What exactly am I missing here?

  4. says

    Great job compiling all the necessary data for the Dividend Growth Index!

    I’m looking forward to being a part of it and to see how we collectively perform.

    @Moneycone: nice idea! It will be interesting to see how this basket of dividend stocks performs against the S&P 500.

    Good stuff!
    TWC

  5. Adam Okhai says

    Extremely useful list. Names selected mostly make sense. Comment below is based on non-expert knowledge and I hope it will be a useful addition: Pepsi is a very well run company and should return good yield. I find it rather expensive today (but then so is KO and Kraft, both companies I’d buy). DAY-T yield is sky high ; makes me wonder if they will be forced to cut back. Staples? I’d never buy. Retail is scary . High overheads; fierce competition; and vulnerable to consumers’ discretionary income which continues to remain flat (falling in many Regions). Nothing unique about Staples. Royal Bank: looks like a bargain, even after you allow for problems RBC faces. Very glad to get such a useful list on a day when so many companies are on sale.

  6. says

    I can’t wait to get this index going!

    Thanks for the kind words above, I appreciate your support of my blog and my site. Again, great did TDG!

    @Clifford,

    CML Healthcare is somewhat risky, I agree, it isn’t a big cap stock and it’s my only small(ish) cap stock actually. This is actually part of the reason why I own it – a bit of a flyer. Is CLC ready for a dividend cut? Maybe over the next year but I’ve been informed from their management, they have no intention to cut it. Even if they cut their dividend by 20%, which might happen over the next year, it’s still great yield at close to 6%. Cuts by U.S. Medicare REALLY hurt these guys and might need to restructure because of it. Long-term, this business is essential for health care.

  7. says

    @Mike,
    Glad to be a part of the DGI and looking forward to seeing where it is going! It’s going to be one fun ride – let’s try and pummel the index :)

    @Clifford Wiebe
    You are looking at CML from Dividend / EPS. You need to look at the FCF (Free Cash Flow) instead of EPS. Most REITs and many income trusts (something I learned recently) measure their cash flow instead of earnings, when calculating their payout ratios. I’m no expert on this, and still trying to unravel my head around it, but that’s the basic of it.

    @Adam Okhai
    Agree with you on RY and Pepsi :) Staples is quite unique actually, even though the profit margin is thin. I think there is tremendous value potential in this company – covered it on my blog.

    Cheers
    The Dividend Ninja

  8. Mike says

    @Ken,
    if one blogger wants to sell a stock, he will have to right to do it once a year. This is also at this money that he will have the right to reinvest its dividend in one of this 3 stocks.

  9. Clifford Wiebe says

    @My Advisor
    Thanks for the feedback. I will defer to those who understand this better than I. I can’t understand how a company can pay out so much more than it earns.

    For a flyer, I go with AGNC in the US. The payout ratio is high at 80%, but the dividend is huge and has been consistent.

  10. Ladybug says

    Doesn’t anyone what to change their pick to Enbridge? ENB just reached a 52 week high today and earlier this year they had a 2:1 stock split? Should be on everybody’s list.

  11. says

    I’ve been following your blog. Your dividend index is a great idea.

    I worked all my life in the newspaper industry and had planned on working until I was 65. I didn’t. I was given a buyout four years shy of my 65th. My pension took about a 24 percent hit! I have become a dividend-driven investor not by design but by need.
    Some of my faves in my portfolio are:
    Crescent Point – presently returning about 7 percent
    Inter Pipeline – giving a yield of about 6 percent
    REM (and American ETF) is delivering about 11.1 percent
    and AUSE (another ETF) has a yield of about 7.2 percent
    and my “do you feel lucky, punk” investment, DRW (an ETF) paying 14.7 percent. I don’t have much DRW but it has, so far, been a wonderful spice for my portfolio.

    I am presently seeing a yield of 6 percent based on the portfolio value with which I retired in January 2009. I need every cent.

    Thank you for sharing your thoughts on the Internet.
    Cheers!

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