The Great 2017 Dogs of the Dow Experiment

The 2017 Great Dogs of the Dow Experiment

Introduction:

The Dogs of the Dow is a pretty popular investment strategy built around selecting the ten stocks whose dividend yield is the highest out of the thirty stocks that comprise the DJIA. You can read all about it on the wikipedia page if you feel so inclined. This strategy has been heavily debated in the past and I’m not here to talk about the pros and cons. I’m only here to talk about the THE NOOBS GREAT DOGS OF THE DOW EXPERIMENT.

What is the Great Dogs of the Dow Experiment? It’s where I put $500 dollars down on the dogs and see how it fairs at the end of the year— with one caveat.

  1. I already own KO and won’t be buying more. I’ll be picking the 11th place Dog of the Dow stock in its place!

You might be asking: Why only $500? It’s true that $500 doesn’t give you many shares of some of these companies but the idea will be the same. The challenge is to see if they will beat the index for the year. They’re all good quality stocks, so I’m not too worried about it on the long term. At the end of the year, I’ll see how they progressed and add  positions to the stocks that are in the new Dogs of the Dow list. I debated on swapping them out versus keeping them and decided that I’ll just keep them in the portfolio. Sounds Easy enough.

Historically, the Dogs have been doing pretty good when compared to the overall index.

dogsofthedow_returnalltime

Courtesy: http://www.dogsofthedow.com/doggish.htm

The highest return of the chart is what they deem the “Small Dogs” or the bottom five stocks in the top 10.  

Below is the current list of DOGS as of 12/31/16. 

Current Dogs of the Dow

Symbol Company Sector Yield
VZ Verizon Technology 4.30%
PFE Pfizer Healthcare 3.94%
CVX Chevron Basic Materials 3.65%
BA Boeing Industrial Goods 3.60%
CSCO Cisco Systems Technology 3.41%
KO Coca-Cola Consumer Goods 3.37%
IBM International Business Machines Technology 3.36%
XOM ExxonMobil Basic Materials 3.31%
CAT Caterpillar Industrial Goods 3.27%
MRK Merck Healthcare 3.16%

 

As I said before, I’ll be swapping out KO with another stock – in this case it’ll be PG. I made the following purchases:

 

3 shares of IBM @ 165.90 5 shares of CAT @ 92.80
9 shares of MRK @ 58.80 15 shares of PFE @ 32.50
6 shares of PG @ 84.05 3 shares of BA @ 155.78
17 shares of CSCO @ 30.20 10 shares of VZ @ 53.40
5 shares of XOM @ 90.40 4 shares of CVX @ 117.65

These 10 stocks add $149.18 to my annual income.

Let’s see how the next year folds out with a new president as well as the market hitting all time highs. It’s always exciting for a new investor to get into new stocks and this experiment will be fun. I’ll be giving progress reports for the stocks quarterly as well as doing some basic due diligence on the 2017 Dogs of the Dow in the coming weeks.

 

Dividend Noob Portfolio Update for November 2016

money_jar

The goal of my dividend growth stock portfolio is simple and I contribute to it every month in order for it to continue returning passive income straight to my account. It currently returns over $1,500 a year and I, in turn, use that money to purchase additional shares of good, strong companies. This creates a snowball effect that piles up bigger and bigger the longer it happens. You might have heard of Dave Ramsay’s Debt Snowball? Well this is even better!

The biggest news item for the month of November was the United States Presidential Election where Donald Trump won the majority of the Electoral College votes but failed to win the popular vote. This will be the fifth person to become president despite losing the popular vote in America. This has caused a pretty divisive split between Americans and we’re far from seeing the last of the fallout due to it. But this blog isn’t about politics, it’s about making passive income in the form of dividend growth stocks!

Let’s see what happened to the portfolio for the last month and I’ll try and give you my thought process for why I did things.

Deposits

In order to help increase the funds available to purchase high quality dividend stocks, I set up for my Robinhood account to pull $150 from my checking account twice a month(7th and 21st).  I set up the withdrawal dates to coincidence on the dates that my paycheck clears into my account. This sets me up with $300 a month without having to do a thing.

I also scheduled a $500 deposit at the beginning of November. One of my goals was to keep adding additional funds to the account every month, on top of the $300 that’s auto-deposited. The amount of money is different every month and depends on how much free cash I have after bills are paid. $500 is a great amount and I continue to strive to meet and or beat this every month!

The next deposit was a speculative decision based off the presidential election. If you followed any of the media concerning the election, many media outlets said the stock market would “crash” or dip hard on a Donald Trump victory. If the stock market did dip then I would be in a good position if I had extra funds in my account to purchase stocks. I transfered $8k from my savings account over into my Dividend Portfolio in case it did happen. After Donald Trump won the election, the stock market ended up rallying and going to new highs which trumped my plans on buying these dividend champions on sale. Oh well.

.Total: $150 + $150 + $500 + $8,000 = $8,8000

Dividends

It was a pretty weak month in terms of dividend payouts with the portfolio only returning $55.67 in income. The following table lists them out.

 

T 25 shares @ $0.48 = $12.00
AAPL 5 shares @ $0.57 = $2.85
SDIV 100 shares @ $0.12 = $12.05
MAIN 77 shares @ $0.18 = $14.25
CLDT 132 shares @ $0.11 $14.52
Total for November:  $55.67


One of my goals in the future is to start looking at good quality dividend stocks that pay their dividends on the weaker months.

Purchases

I purchased quite a bit in November.

  • 5 shares AAPL @110.75

At a dividend yield of 2.06% and a p/e ratio around 13, I thought it was a decent entry point to start my position in AAPL. There were plenty of opportunities to pick up AAPL at the lower price but I was always cautious on their ability to deliver innovation. It’s hard to bet against this giant though and I decided to start a small position for the long term. I’ll be buying a few more shares on the dips as it transitions into a dividend growth stock (hopefully). This position adds $11.40 to my annual income.

  • 84 shares CLDT @16.95

Chatham Lodging Trust is an equity real estate investment trust with the majority of their holdings in upscale extended-stay hotels. One of the highlights of this REIT is the high yield (~7%) and that they pay dividends on a monthly basis. It trades around a Price/FFO ratio of 8.5 times. Hotels tend to not do very well during recessions and with the market at an all time high, I’m going to have to keep an eye on it but I’m pretty confident in them for the time being. This position adds $110.88 to my annual income!

  • 10 shares OHI @28.35

Omega Healthcare Investors is another REIT that invests in long-term care facilities located in the U.S. and U.K. The prime factors in my decision to purchase shares were the solid 14 years of increasing dividends, the current yield of 8.28%, and the latest price drop due to earnings.  This position adds $24.40 to my annual income!

  • 6 shares SO @ 47.10

The Southern Company generates and distributes electricity through coal, nuclear, oil, gas and hydro resources in the AL, GA, FL and Miss. They currently sit at a p/e ratio of around 17 with a current dividend yield of 4.78%. They are new to the dividend payout game and had only just started paying out in 2013. Energy sector has been getting hit pretty hard lately so I felt it was a good time to add to my position on the dip. This position adds $13.44 to my annual income!

  • 10 shares NGG @ 57.10

National Grid plc is another energy stock that distributes electricity and natural gas to the U.K and the U.S. It currently sits at a dividend yield of 5% and just like SO, has been paying dividends since 2013. This position adds $29.60 to my annual income!

  • 3 shares DUK @ 73.84

DUK is another energy stock that’s been getting hit pretty heavily lately which drove it’s p/e ratio to 17.7 and yield to 4.6%. I used my auto-deposit cash to purchase these shares. This position adds $10.26 to my annual income!

Sells

  • 25 shares TGT @ 71.67

I sold out of my shares of TGT after a big bump after earnings to lock in profits. It’s since skyrocketed even higher and I’m a little jealous that I pulled the trigger too early. Oh well, at least i made a decent chunk of profit from it regardless. This reduces my annual income by $60.00.

You can always view my current portfolio.

That’s it for the month of November! Coming up next month is Christmas and the spendthrift nature of the entire month. Here’s hoping I have some amount of money left at the end in order to keep adding to my portfolio!

~Noob

October Dividend Payouts and Portfolio Update

It was another good month for the dividend portfolio as I made $85.55 without doing a single thing. I love passive income, I really do.  It was a big month for purchasing stocks as I had nine buying transactions and only a single selling transaction.

October Portfolio Update

  1. Bought 4 shares of DUK @ $77.35.
  2. Bought 7 shares of KO @ $41.70.
  3. Bought 15 shares of CLDT @ $18.96.
  4. Bought 25 shares of SDIV @ $20.85.
  5. Bought 4 shares of DUK @ $76.07.
  6. Bought 25 shares of CLDT @ $18.15.
  7. Bought 15 shares of SO @ $49.30.
  8. Sold 30 shares of RAI @ 54.88.
  9. Bought 16 shares of TROW @ 63.28.
  10. Bought 10 shares of CAH @ 66.00.

In total, this adds an annual income of $211.96. The portfolio is now generating $1,505.78 a year in income!

October Monthly Dividend

KO 55 shares @ $0.35 = $19.25
RAI 20 shares @ $0.46 = $9.20
SDIV 75 shares @ $0.12 = $9.04
MAIN 77 shares @ $0.18 = $14.25
CAH 10 shares @ $0.45 = $4.49
STWD 40 shares @ $0.48 = $19.20
CLDT 92 shares @ $0.11 $10.12
Total for October:  $85.55

Next month, I expect to make a big deposit into my dividend portfolio account in order to prepare for the election month. I’m not sure exactly what to expect but if there’s a chance to purchase some quality stocks at a discounted price, I will do what I can to take advantage of it!

Until next time!

You can check out my portfolio to see my latest holdings.

September Dividend Payouts and Portfolio Update

 

September Portfolio Update

  1. Bought 25 shares of CLDT @ $19.38.
  2. Bought 5 shares of TROW @ $67.15.
  3. Bought 10 shares of CAH @ $76.30.
  4. Bought 25 shares of TROW @ $68.70.
  5. Bought 35 shares of CLDT @ $19.48.

 

September Monthly Dividend

  • PSX–         15 shares @ $0.63 = $9.45
  • F–       50 shares @ $0.15 = $7.50
  • JNJ–   10 shares @ $0.80 = $8.00
  • TGT – 25 shares @ $0.60 = $15.00
  • SDIV – 75 shares @ $0.12 = $9.04
  • MAIN – 77 shares @ $0.18 = $13.86
  • FLO – 150 shares @ $0.16 = $24.00
  • TROW – 25 shares @ $0.54 = $13.50
  • ARCC – 100 shares @ $0.38 = $38.00
  • CLDT – 32 shares @ $0.11 = $3.52

Total for September: $141.87

What a refreshing month in comparison to the previous. I hope everybody else had a good investment month! Let me know in the comments!

You can check out my portfolio to see my latest holdings.

August Dividend Payouts and Portfolio Update

 

August has come and gone in a flash and the portfolio as it stands is below. Like in previous months, I auto-transfered $300.00 into my Robinhood account but I failed to hit my goal of adding one additional deposit for the month. The reason for the failure was due to having to purchase a new lawnmower for the yard duties.

August Portfolio Update

  1. Sold 30 shares of CSCO @ $30.50.
  2. Bought 30 shares of FLO @ $17.67.
  3. Bought 25 shares of FLO @ $14.90.
  4. Sold 282 shares of CSIQ @ $12.76.
  5. Bought 5 shares of KO @ $43.85.
  6. Bought 25 shares of TROW @ $68.70.
  7. Bought 12 shares of DUK @ $80.00.

The biggest news item is that I sold all my old shares of CSIQ (the last non-dividend) stock in the portfolio. I did lose quite a bit of money on that and have learned some valuable lessons from it. Hopefully next time they lessons won’t come at such a high price.

 

August Monthly Dividend

  • T–          25 shares @ $0.48 = $12.00
  • RAI–       75 shares @ $0.12 = $9.04
  • MAIN–   77 shares @ $0.18 = $13.86

Total for June: $34.90

Not a great month for dividends to be honest. Next month is shaping to be better though and all that I can do is to keep moving forward on investing in great quality stocks.

I hope everybody else had a good investment month! Let me know in the comments!

You can check out my portfolio to see my latest holdings.