Saturday, August 23, 2014

Evaluation of first year DGI

I have started DGI last year around July/August. Already a year has passed and it's time for me to evaluate my first year as a dividend growth investor. The aim of the portfolio is to provide replacement income when I would like to work less in the future, to help put my kids through college or whatever is necessary in the future. This update summarizes the portfolio progress from August 2013 till August 2014.

Annual goals for 2013 are met!

Like I mentioned earlier, my ultimate goal is to live off the dividends which my investment are generating. However this goal is not achievable overnight. To monitor my yearly progress I've done some calculations and rounded the yearly dividends upwards. This way I've set realistic goals while it still takes a lot of effort to reach these goals. This hopefully will keep me motivated! You can find details about these goals here.

  1. For my first year I've set a goal of €380 in annual dividend income. I beat this goal by a small margin, since I received just over €400  after tax in dividend payments.
  2. In my annual dividend calculations I assumed a lump-sum starting amount of €11.000 with monthly contributions of €250. This would provide me with a total of around €14.000 at the end of my first year. However, I was able to deposit €16.330 during the last year, 17% more than I originally anticipated. It remains to be seen if I can keep up these contributions but I am definitely going to do contribute as much as I can!


You can find real-time information about my portfolio here.

Monthly dividends are increasing!

The figure below represents the monthly dividend income I have received during the last year. From now on I can compare the monthly dividend income to last year's monthly income. The month of August is almost done so I can already see the effects on a monthly basis. In August 2013 I received slightly over €15, in 2014 I can expect to receive almost €55 in August! Yeah, that's not a doubling, not a tripling, but almost a quadrupling! I don't think I can expect regular quadrupling's in the next years, but I'll take 'em for now!

Dividend growth?

I started a dividend growth portfolio last year. So what's the dividend growth been like for the companies that are in the portfolio for at least one year? The table below provides the annual dividend a year ago and the current dividend. I have had two hold outs, Intel and Textainer. Intel showed great results recently so I kind of expect a dividend raise by the end of the year. The stock of INTC has gained a lot of ground this year, so I am not complaining by any means. Textainer is a different story. Recently I wrote an article on Seeking Alpha about my position in TGH. The fundamentals of this company are still intact, however I monitor my position closely.

CompanySharesDividendCurrent dividendIncreaseNote
DE18$2,04 $2,40 18%
PM17$3,40 $3,76 11%
XOM17$2,52 $2,76 10%
KO37$1,12 $1,22 9%
UNA37€ 1,08€ 1,146%
BBL28$2,36 $2,48 5%
WMT20$1,88 $1,92 2%
INTC63$0,90 $0,90 0%No dividend raise during this period
TGH43$1,88 $1,88 0%No dividend raise during this period

As you can see below in the table, the average weighted dividend growth rate is +3.7%. If I exclude the effect of the EUR.USD-rate this number becomes almost 6% which is what I am aiming for long-term. These are not mind blowing numbers but that's exactly what dividend growth investing is about, slow but steady!

Annual dividend@August 2013@August 2014Change
Total€ 361€ 375+3,7%
Constant FX€ 361€ 383+5,9%

Total portfolio return and benchmark against the Dow Jones

Using the Internal Rate of Return-function Google Doc (or Excel) provides, the annualized return for my portfolio since its inception is 14%. Considering the bull market we've been in the last year, it's not difficult by any means to achieve this kind of investment return. Instead, would I have invested the money in the Dow Jones Industrial Average Total Return (DJITR) using the same dates as my individual purchases, that would have provided me with a 13% annual rate of return. It's good to see that I slightly outperformed the index, however it says hardly anything considering it's such a small time period. Should I outperform the index consistently during a 10 year time-stretch, that would say something!

Outlook for my 2n year

A year ago I calculated that I would like to receive €540 in my 2nd year as a dividend growth investor. However, my current annual dividend rate for the next 12 months is almost €700. So with almost certainty I will smash this goal. For now I'll just keep my annual goals because there will be times I am not contributing as much. The most important goal is income replacement in 25 years so I am not too focused on short-term deviations.

Goals for next year:

  • For the coming year I hope to deposit about €4.000 to my dividend growth portfolio and invest this money (including the received dividends) in quality DGI companies!

  • Write more articles on my blog and for Seeking Alpha
Last year has been fun AND produced great results. I feel great about this development because I can start to see the effects of my decision last year. Let's keep it up this year and many more years to come.


  1. Great Portfolio. I like DE and PM for the moment which are also your biggest positons. After the latest MO dividend hike of around 8 percent, PM should follow. Good if PM could grow their dividend from 3.76 to USD 4 per share. Best Tom.

    1. Hi Tom, thanks for taking the time to read my piece. For now most of my positions are equally weighted (at least on costs basis). I am definitely looking forward to another dividend raise by PM but I suspect it might be a bit smaller because of sales and debt issues.

  2. Hi Robin
    You couldn't say it better!
    "I feel great about this development because I can start to see the effects of my decision last year. Let's keep it up this year and many more years to come."

    Best regards!

    1. Yeah that's probably the important. I am looking forward to seeing the results 10-20 or 30 years down the road.

  3. Great overview and congrats on the progress. You have picked some great stocks in your portfolio and Im sure they will continue growing their dividends over the years. Best wishes for the future.


    1. Hi R2R, thanks for the kind words. Let's hope my 2nd year will be like my 1st except with higher dividends :)

  4. Stay motivated and keep up the good work. You can see real results after one year of being a dividend growth investor. Do you plan to buy more stock in your portfolio and diversify a bit more?

    1. Hi Keith, thanks for taking the time to comment. I definitely plan on buying more stocks subject to availability of funds of course. I'll post it here once I've done another purchase.

  5. Hi Robin,
    Thanks for all the insights! I've been reading up on investing and strategies since a couple of months. I find your strategy very interesting. I expect to start very soon, but with a little smaller budget than yourselves. I will keep following your blog and posts.

    1. Hi Daan, I hope I inspired you a little bit. If you ever want to talk face-to-face about anything related to investing (or anything else for that matter!), give me a call! Cheers, Robin

  6. Hi Robin -- congratulations on your first year of blogging! Great-looking results and you're right, you smashed your dividend income goal! Recently, I expanded my blogroll to a separate page at -- feel free to check it out.


    1. Hi FerdiS, thanks for dropping by! I read your blogpost the other day on mobile. I'll definitely check it out later on my laptop. Cheers!

  7. Congratulations on both your milestone and your portfolio growth. Best wishes for your second year.