My strategy for financial independence is called dividend growth investing. I constantly monitor the group of dividend champions and dividend achievers for companies which are attractively priced. I then analyze them in detail, in order to determine if the business can continue earning more, in order to pay me rising dividend checks in the future. I have managed to build my dividend freedom portfolio one stock at a time over the past six years. I am incredibly patient, which is why I hold on to any quality company I bought, as long as the dividend is not cut or eliminated.
One part of my monitoring process is regularly checking the list of companies that have recently announced increases in their dividend rates. Company management only approves increasing dividends if they expect earnings to improve over the next several years. That is why dividend increases are typically a bullish sign for investors who hold dividend growth investments. Over the past month, there were a couple dividend kings, which extended their streak of regular dividend increases.
The Procter & Gamble Company (PG), together with its subsidiaries, manufactures and sells branded consumer packaged goods. The company’s board of Directors approved a 7% hike in quarterly dividends to 64.36 cents/share. This marked the 58th consecutive dividend increase for this dividend king. Over the past decade, Procter & Gamble has managed to increase dividends by 10.60%/year. This was fueled by a 7.60% increase in annual earnings per share over the same period. Analysts expect the company to earn $4.21/share in 2014 and $4.54/share in 2015. In comparison, Procter & Gamble earned $3.86/share in 2013. Currently, the stock is fairly valued at 19.30 times forward earnings and yields a very sustainable 3.10%. I would plan on adding to my position in the company, unless of course there are other more attractive investments available. Check my analysis of Procter & Gamble.
Johnson & Johnson (JNJ), together with its subsidiaries, is engaged in the research and development, manufacture, and sale of various products in the health care field worldwide. The company’s board of Directors approved a 6.10% hike in quarterly dividends to 70 cents/share. This marked the 52nd consecutive dividend increase for this dividend king. Over the past decade, Johnson & Johnson has managed to increase dividends by 10.80%/year. This was fueled by a 7.20% increase in annual earnings per share over the same period. Analysts expect the company to earn $5.88/share in 2014 and $6.33/share in 2015. In comparison, Johnson & Johnson earned $4.81/share in 2013. Currently, the stock is attractively valued at 17 times forward earnings and yields a very sustainable 2.80%. I plan on adding to the company this year, subject to availability of funds. Check my analysis of Johnson & Johnson.
Those companies have managed to accomplish their dividend streaks, because they had strong business models, and diversified streams of earnings that kept growing through good and bad years. This is the type of quality income security that every dividend investor worth their salt should study.
Full Disclosure: Long JNJ and PG
Relevant Articles:
- How to read my weekly dividend increase reports
- Procter & Gamble (PG) - A dividend stock to hold forever
- Johnson & Johnson (JNJ) - A must own dividend stock
- The Dividend Kings List Keeps Expanding
- My dividend crossover point
Popular Posts
-
My retirement strategy is focused on living off dividends. Dividends are more stable, predictable and reliable than capital gains. Dividends...
-
A pattern of steady dividend payments and dividend increases is only possible if a business can generate enough cashflows to support operati...
-
As a shareholder, there are two ways to make profits from a stock. The first way is when you sell your stock for a gain, after it has incre...
-
I review the list of dividend increases as part of my monitoring process every week. This exercise helps me review the performance of existi...
-
The Dow Jones U.S. Dividend 100 Index is designed to measure the performance of high-dividend-yielding stocks in the U.S. with a record of c...
-
Planning your retirement is one of the most challenging exercises in the world. There are plenty of ways, methods and advisors, who try to i...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing holdings but a...
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing holdings, but ...
-
A famous saying goes that there are two things certain in this world: death and taxes. While I am pretty sure I can’t escape death, I know t...
-
I review the list of dividend increases as part of my monitoring process. This exercise helps me monitor existing holdings. It also helps me...