June 2015 Update

All Is Quiet in Gravyville

I wish I had some exciting new purchases to write about, but I’ve got nothing.  I haven’t made a purchase since mid-May.  I may be experiencing a crisis of confidence in myself, or it may be that I’ve become uncomfortable with valuations.  Perhaps a little of both.  The overriding concern for me is the fact that I’m dealing with our retirement funds.  In that my wife and I are already retired, there is no going back for a do-over.

Keeping It Simple, But Not Too Simple

My stock studies (lately an exercise in frustration) have been given a lower priority while I contemplate what I can do to better my decision making process.  In reviewing many different approaches to evaluating a stock, some thoughts are starting to gel.  The hope is to develop a process that is straightforward and easy to execute, while being reasonably diligent.

Don’t get me wrong.  I’m doing okay, but I feel like I can do better.  Prior to retirement, I concocted a retirement income projection spreadsheet to review with my financial guru.  As to our dividend income projection, I missed the target last year by about $100.  Not bad at all.  Through June of this year, we are just slightly above the halfway mark for the 2015 income projection.  Basically, right on target.

I do think though that my approach has been a little haphazard at times and I need to develop a more consistent way of doing things.  One method that has caught my eye is used by David Van Knapp.  He is among those on the Seeking Alpha website that I hold in high esteem.  He has his own website, Sensible Stocks, and he writes DGI articles for Daily Trade Alert.  His evaluations, in part, tend to involve color coded spreadsheets that make sense to me.  I’m evaluating which of his criteria I want to use (probably all).

I also want to determine what other criteria is important to me.  I have been following Part-time Investor, another author on Seeking Alpha.  He/She (not really sure) is developing and reporting on a Keep It Simple, Stupid (“KISS”) portfolio.  I suspect I will incorporate at least some of these strategies in my game plan.  Keeping it simple is important to me.

This will be a work in progress for some time to come, and I don’t plan to stop buying stocks until it is “finished”.  After all, it will probably never be finished.  My hope is to establish an initial method that I am comfortable with and then use it consistently in evaluations and on this blog.  Hopefully, it will generate a lot of feedback and can be refined over time.

What about you?  What are your favorite methods of evaluating dividend growth stocks?

Year over year dividend comparison for June 2015

  • Dividend income for June was 58.2% above last year’s monthly total (and a record month)
  • On a YTD basis through June, dividend income was 46% above last year.

Stock Sales For May

  • None

Dividend Increases for June  ( I love pay raises)

  • PepsiCo (PEP) bumped up their dividend by 7.25%, ex-div June 3.

2015 YTD forward dividend income (through June)

  • Stock purchases have added 9.92% to our dividend income
  • Dividend increases have added 3.75% to our dividend income
  • Stock sales have decreased forward income by 5.71%
  • Overall, our YTD forward dividend income increase is 7.96%.

Best wishes and happy investing!

Steve

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4 responses

  1. Hi DG, sounds like you’re putting a lot of thought into your investments. I’m not an expert but my indicators I look at seem to change from time to time. Lately, I tend to lean towards stocks with consistent dividend payouts/increases that are near 52-week lows. I’ll also compare the current dividend yield to the five-year average. In addition, I’ll consider P/E, beta, etc but it just depends. In the end, I think I go with my gut. I know I’m not perfect but it adds to the fun of investing for me when I come to my own decisions.

    Best of luck!
    Dear Dividend

    1. Hello DD,
      I don’t know if I’m putting a “lot” of thought into this, or just a more appropriate amount of thought. In putting my money down on div stocks, I have caught myself using slightly varied criteria and standards. The number of criteria that one might possibly use boggles the mind (at least it does for me). At the very least, I want to have something of a standard set of criteria to check out before proceeding further with investigating a purchase.

      I suppose there has to be some variation in criteria between industries. I haven’t figured that one out yet completely, but I’m getting there. P/E and beta are on my list as criteria. As to P/E, I like to consider historical P/E versus current P/E…. and then compare that to earnings forecasts to see if it makes sense. Using beta is a mixed bag for me. I’m not a fan of volatility, but it does at times allow for purchases at a good value. Yield versus five-year average yield is definitely something I like to consider. Often times I even give a glance to the ten and twenty year yield charts.

      I like your comment about going with your gut. No matter how well we evaluate or what criteria we use, we still need to deal with our gut hunches. It’s rather difficult to buy something when your gut tells you to stay away. At times I’ve listened to my instincts, and at other times I’ve plugged my nose and went against my instincts. The results are mixed there as well, but you still have make an educated guess in most situations.

      Thanks for your comments.
      Steve

  2. roadmap2retire | Reply

    Nice progress all around DG. Great to see that your forward dividend income is increasing nicely and really great progress on an annual basis too. Thanks for sharing.

    cheers
    R2R

    1. Thanks, R2R. I appreciate you stopping by.

      Steve

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