Wednesday, April 4, 2012

Dividend Growth Index, Q1 2012 Update

Back in September 2011, several dividend bloggers selected three of their most promising long-term picks in order to create a sample dividend growth portfolio. Unlike other stock competitions, the goal of this initiative was to identify the best picks from a long-term perspective, which are expected to be held for years.

Each blogger selected three stocks that they viewed as attractively priced. I selected McDonald’s (MCD), Chevron (CVX) and Enterprise Product Partners (EPD). You could read more about the reasoning behind these selections in this article.

McDonald’s Corporation (MCD) franchises and operates McDonald’s restaurants primarily in the United States, Europe, the Asia Pacific, the Middle East, and Africa. This dividend aristocrat has raised dividends for 35 years in a row. The ten year dividend growth rate is 27.40%/year. Analysts are expecting strong sales momentum from 2011 to continue, as consumers are attracted to the company’s menu. Yield: 2.90% (analysis)

Chevron Corporation (CVX), through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. This dividend achiever has raised distributions for 24 years in a row. The ten year dividend growth rate is 8.80%/year. High oil prices should benefit the Chevron, which has embarked on a multitude of new projects to uncover more reserves of the black gold. Yield: 3%(analysis)

Enterprise Products Partners L.P. (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals in the United States, Canada, and Gulf of Mexico. The largest master limited partnership has raised distributions for 15 years in a row. Steep run-up in high-yielding stocks have pushed the yield to 5%. The ten year distribution growth rate is 7.60%/year. Enterprise Products Partners has raised distributions every quarter for the past 30 quarters, and made K-1 packages available to unitholders on its website. (analysis)

The complete dividend portfolio could be viewed below:



Full disclosure Long CVX, EPD, MCD, ABT, KO, WMT, PEP, AFL, PM, PG

Relevant Articles:

- Dividend Growth Portfolio Project
- How to choose between dividend stocks?
- Seven wide-moat dividends stocks to consider
- Best Dividend Stocks for 2012

1 comment:

  1. Thank you for your blog, I came across it mainly by chance and like it a lot.

    What do you think about the payout ratio of Enterprise product partners? I checked the stock on morningstar.ca and found that the company had 2.38$ of earnings per share but payed a dividend of 2.41$. Also ,the ratio of earnings/dividend war consistenly greater than 100% over the last years, consequently total sharholders's equity plummeted.

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