Sunday, April 23, 2017

Monthly Review: March 2017

I'm a little late with my monthly review for March. Work continues to occupy most of my time, so I'm finding it quite challenging to update DivGro. I'm certainly not complaining about work... it is better to have too much work than not to have enough work. But it would be great to have just enough once in a while!

In March I finished the consolidation of my wife's traditional IRA's into a single account at FolioInvesting, where I'll be managing it using DivGro's strategy of dividend growth investing. I retained one of her stocks, UnitedHealth Group (UNH), which happens to be DivGro's 8th home run!

Saturday, April 22, 2017

Home Run Number 8

I use the term home run to describe any position in my portfolio that has crossed the 100% mark in total return. In my days as a trader, I sold half of my shares when a position became a home run position. I justified the action by saying that now I'm playing with "house" money. I no longer think that way. In fact, I'm more than happy to hang on to home run stocks and to continue collecting their growing dividends.

I announced DivGro's seventh home run on 27 October 2016, nearly two years after announcing the first. Today, I'm happy to announce that I've scored another home run with DivGro!

Wednesday, April 19, 2017

Two Recent Sells

Covered call trading is a two-edged sword. It provides a way to generate options income and so boost dividend income. You sell someone the right to buy shares you own at a predetermined price, called the strike price. For that right, the options buyer pays you an options premium.

I report my options trades monthly, usually after option expirations date. I'm yet to report on my options trading activity for March, but you can see February's report here.

When I sell covered calls, I'm well aware of the potential drawbacks. The stock price can move quickly above the strike price and you have to sell your shares. You leave money on the table and, assuming the strike price is above your cost basis, you have to pay capital gains tax. Finally, you give up future dividends.

Sunday, April 16, 2017

9 Dividend Increases: April 10-13, 2017


Companies that regularly increase dividends show confidence in future earnings growth potential.

One way to identify dividend growth stocks for further analysis is to monitor dividend increases.

This week, nine companies on my watch list decided to increase their dividends, including three of the stocks I own. Only one stock announced a double digit percentage increase.

Saturday, April 15, 2017

Closing Two Closed-End Funds

I invested in closed-end funds (CEFs) in my Scottrade account before consolidating my investments and bringing them into the DivGro fold.

Aside from the attractive yields on offer, I liked having a few target holdings for Scottrade's flexible reinvestment program, or FRIP. Much like DRIPs, Scottrade's FRIP allows investors to collect dividends in a special account and reinvest the money periodically.

Now that I've moved to Interactive Brokers, at least one of the reasons for holding onto these CEFs has disappeared. Of course, giving up those higher yields is difficult, so I decided to close only two of the three CEFs I owned.

Friday, April 14, 2017

10 Dividend Growth Stocks For April 2017


I love David Fish's CCC list of dividend growth stocks trading on U.S. exchanges. Updated every month, the CCC list contains more than 800 stocks with at least five consecutive years of higher dividend payments. The accompanying spreadsheet provides key statistics of the CCC stocks and is a wonderful source for dividend growth investors.

In my monthly 10 Dividend Growth Stock series, I identify 10 CCC stocks worthy of further analysis. To create the list, I trim the CCC list using various screens. I rank the trimmed list and assign a 7-star rating to each stock. Stocks rated 5-stars or better are worthy of further analysis.

Thursday, April 13, 2017

Recent Transfer: UnitedHealth Group


Founded in 1974 and based in Minnetonka, Minnesota, UnitedHealth Group Incorporated (UNH) is a diversified health and well-being company with core capabilities in clinical expertise, advanced technology and data and health information. The company provides medical benefits to customers in the United States and more than 125 other countries. UNH operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight, and OptumRx.

UNH is a Dividend Challenger with a streak of 7 years of dividend increases. It pays quarterly dividends in March, June, September, and December. The current dividend is 62.5¢ per share, so UNH yields 1.52% at the recent share price of $162.96. UNH has an impressive 5-year DGR (dividend growth rate) of 31%.

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