Dividend Growth Index Q1

Hey! It’s good to be back!!!

 

First things first, if it’s your first time on this blog in 2012, you want to check my Best Dividend Stocks for 2012 article (I give a 29 analysis eBook for free 😉 ).

 

Back in September, a group of dividend bloggers launched The Dividend Growth Index. This is a dividend portfolio of 24 stocks (US and CDN). Each quarter, we follow our picks and the overall portfolio results. By following our blogs, it allows you to track closely 24 great dividend stocks and how they perform over time.

 

Intel – NASDAQ:INTC

 

Intel had surprised everyone by beating analyst’s expectations this summer with great financial results. Unfortunately, the company has lowered its Q4 revenue outlook due to a hard disk supply shortage. No hard disks, no computers. No computers… no computer chips needed from Intel! However, future outlooks remain unchanged as Intel believes the shortage will end during the first months of 2012. Being part of the Dogs of the Dow, INTC is still a good pick in my opinion.

 

Coca-Cola – NYSE:KO

Over the past few months, KO has made some interesting moves by using its liquidity for something better than earning 1% in a money market fund! In October, Coca-Cola announced they established a plan to spend $3bln in Russia followed by another announcement to spend $2bln in India in November. Most recently, they bought stakes in the Saudi Drink Company for $980 million. The 3 examples mentioned above make a clear statement: Coca-Cola is after emerging markets in order to keep growing. Since they have plenty of cash and the economy is not doing so well at the moment, this sounds like the perfect timing to use its liquidity for future growth.

 

National Bank of Canada – TSE:NA

 

National Bank posted strong financial results back in early December and increased its dividend from $0.71 to $0.75 per share at the same time. During their last quarter, NA was able to beat financial analysts’ estimates and show great results from wealth management and commercial banking. Since most revenues had previously come from trading operations, it is good news to see other segment contributing to the overall results. Finally, National Bank is looking to fully integrate their recent acquisitions (Wellington West and the brokerage segment of HSBC) in the upcoming months.

 

How the overall portfolio performed?

 

Here are the Dividend Growth Index performance compared to a mix of the Canadian and US index:

 

Blogger	Stock	New Shares #	New Price	Live-CAD$	Live-USD$
My Own Advisor	ABT US Equity	19.72932352	56.72	$1,131.02	$1,119.05
	BNS CN Equity	19.16579992	51.59	$988.76	$978.30
	CLC CN Equity	108.4407012	9.71	$1,052.96	$1,041.81
The Dividend Guy Blog	INTC US Equity	47.27672314	24.54	$1,172.58	$1,160.17
	KO US Equity	14.9050914	70.14	$1,056.63	$1,045.44
	NA CN Equity	14.4590418	73.12	$1,057.25	$1,046.05
The Dividend Monk	ETE US Equity	29.24446203	40.54	$1,198.26	$1,185.57
	NVS US Equity	17.93	58.18	$1,054.33	$1,043.17
	WMT US Equity	19.39021108	60.33	$1,182.33	$1,169.81
Dividend Ninja	HSE CN Equity	44.62997459	24.87	$1,109.95	$1,098.20
	PEP US Equity	16.2900375	66.4	$1,093.23	$1,081.66
	SPLS US Equity	75.72477952	14.215	$1,087.95	$1,076.43
Passive Income Earner	CNR CN Equity	14.3387766	79.71	$1,142.94	$1,130.84
	CNQ CN Equity	32.58354756	39.86	$1,298.78	$1,285.03
	AFL US Equity	28.8230738	44.88	$1,307.42	$1,293.58
Wealthy Canadian	RY CN Equity	21.04372296	52.82	$1,111.53	$1,099.76
	FTS CN Equity	55.72287528	33.18	$1,848.89	$1,829.31
	BIN CN Equity	46.65521141	19.8	$923.77	$913.99
Dividend Mantra	COP US Equity	15.94545048	74.17	$1,195.33	$1,182.67
	PM US Equity	16.19092699	78.59	$1,286.06	$1,272.44
	PG US Equity	15.95795612	66.83	$1,077.88	$1,066.47
DividendGrowth Investor	CVX US Equity	10.886571	110.37	$1,214.41	$1,201.55
	MCD US Equity	11.47530922	98.84	$1,146.36	$1,134.22
	EPD US Equity	25.24942992	46.67	$1,191.00	$1,178.39
				$28,719.39	$28,415.34

Dividend Growth Index Performance So Far

 

When I looked at the portfolio at first, I thought it was great. But you don’t know how great it is if you don’t compare it, right? So here are a few more thoughts on the Dividend Growth Index:

 

All stocks have paid dividends at least once except Novartis (pays annually), CLC pays monthly.

 

All dividends are reinvested on ex-date.

 

We had our first trade made in October when Wealthy Canadian sold DAY after a healthy profit. He then decided to buy FTS.

 

I wanted to look at the portfolio from 2 points of view (Canadian and US) since there is a difference in the currency rate:

 

In CAD:

 

Portfolio 09/30 $CAD 25,513

Portfolio Now: CAD$28,720 (would be about $800 more if FX had not moved)

 

Using last dividends paid, index pays $899 CAD per year (very conservative since NVS has not paid and many have already announced dividend increases)

 

In USD:

 

Portfolio 09/30 $USD 24,290

Portfolio Now: USD$28,415 (would be about $400 less if FX had not moved)

 

Using last dividends paid, index pays $890 USD per year (very conservative since NVS has not paid and many have already announced dividend increases)

 

Comparison:

 

If someone had bought DVY (big US dividend ETF) with the same amount, he would now have $27,355, that position would give $900 in dividends per year.. To be fair though, a large part of the outperformance is the DAY pick, but still good:)

 

You can read about the other participant picks by clicking on their name below:

My Own Advisor

The Dividend Monk

Dividend Ninja

Passive Income Earner

Wealthy Canadian

Dividend Mantra

Dividend Growth Investor

 

Disclaimer: I own shares of NA, INTC & KO

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