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.
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:
- Jan 14: GIS 37 Shares at $40.90
- Feb 11: MA 3 Shares at $524.00
- Feb 11: AFL 30 Shares at $50.23
- Feb 19: WFC 43 Shares at $35.14
- Feb 25: WMT 21 Shares at $71.00
- Mar 7: WFC 41 Shares at $36.38
- Mar 28: MSFT 53 Shares at $28.24
- May 9: GE 66 Shares at $22.85
- Jun 24: DPS 33 Shares at $45.00
- Jul 25: KMI 39 Shares at $38.67
- Oct 9: DPS 35 Shares at $43.70
- Nov 12: TGT 23 Shares at $65.50
- 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.
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:
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.
I received $1,068.62 in dividends from my portfolio. This is an amazing 55.31% increase compared to 2012 income, $688.06.
Below a table of the amount my current holdings paid in 2012 and in 2013:
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.
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.
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.