Tuesday, December 31, 2013

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.

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.

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.

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.

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.


  1. 2013 was a great year for so many of us. Markets booming, although I'd have preferred a slower climb to current levels, and the dividends just kept rolling in and being increased. I had a whopping 291% increase in dividends received versus 2012 and I'm hoping to hit another 80-100% increase for 2014 over 2013. Best of luck in 2014!

    1. PIP,

      Wow, amazing year for you. Great job, keep it up! Good luck in 2014.

      Best wishes!

  2. Sounds like a great year. Good luck to you in 2014.

    1. FFDividend,

      Thanks, good luck to you in 2014!

      Take care

  3. Exponential,

    Great year! Congratulations on all of your success, especially exceeding your dividend goal.

    Do you plan to invest $18k or so per year every year? Or was this a standout year in that regard?

    Keep up the great work!

    Best wishes.

    1. DM,

      Thanks! This year I plan on investing about the same amount as last year. You had a stellar year too, beating al your 4 goals, good job!

      Take care.