Sempra: the newest cog in the dividend-growth machine

I get restless on dividend-less days.

It’s not that I’m disappointed I didn’t receive anything … I’m not greedy. I mean, dividends are better than no dividends, but it’s unrealistic to think you can build a dividend-growth portfolio that will literally spit out dividends every single day. I’m not even sure it’s possible.

I’m thrilled with the fact I’ve built up an account that produces 532 dividend payments per year … and I’ve done it in just a little over a year. I may not get paid every day, but, on average, I get paid more than once a day.

That’s not really the point I’m trying to make, though. I get restless on dry dividend days because, as you probably know if you’ve been following my march for an extended period of time, I like to take positive steps toward building a $1,000,000 portfolio each and every single day. On days I earn at least one dividend, that’s taken care of for me. The dividend adds cash to my portfolio, obviously getting me closer to my goal.

When I don’t earn any dividends, though, I have to create some positive momentum myself. I usually do that by buying dividend-paying stocks, either adding to positions I already have or starting new ones.

That’s exactly what I did Tuesday.

Today’s Purchase

I opened up a position in Sempra Energy (SRE) by scooping up a share for $117.99. Sempra is the 46th company in my portfolio that pays quarterly dividends in January, April, July and October, meaning I should get a solid 46 dividend payments between Oct. 1 and Halloween.

I also bought shares of Omnicom, Cisco and Cardinal Health so far this month.

Sempra is pricey right now, at least in terms of where it is in relation to its 52-week high ($118.78), but I’m not all too concerned. I’m all about buying low and selling high, but when you’re purchasing one share at a time commission free with Robinhood, you can always work on the cost-basis by buying on future dips. I’ve also learned you should buy a company when you like it. I bought a share of Apple when it was in the $90 range, thinking that was expensive. It was, after all, near its 52-week high. Now, a year or so later, it’s up to $159 a share. If I kept waiting to buy Apple, I still might not own a share.

Anyway, Sempra has a great-looking dividend. With a yield of 2.78%, it has an annualized payout of $3.29. The share I purchased Tuesday brought my forward annual dividend income to $409.83. Despite the solid dividend, the company still has a payout ratio of just 64%, so the hikes, which have been steady for each of the last six years, should continue. Sempra boosted its dividend by 7.4% in 2016.

Sempra’s dividend is certainly sustainable. The company itself has been doing pretty well, too. It had earnings of $1.10 a share last quarter, beating expectations by $0.24 a share. It’s actually beat its estimates each of the last four quarters. Last year, it missed its second-quarter earnings estimate by $0.18 a share. Since then, though, it’s been on fire.

Any of you guys own Sempra, or a similar utility? Think it was a good purchase? Let me know … I wanna know!

March on!

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