Focus on income streams, not market swings

March toward $1,000,000: Weeks 17 and 18 (Nov. 19-30)

One of my favorite things about dividend-growth investing is this: it forces you to focus more on incremental gains over time and less on big daily swings.

Less about swings and more about streams … specifically income streams.

I know, I know … duh, right? It’s not the most profound way to open a post – I know I’m not breaking any new ground with the statement – but it’s true.

That said, I plan on focusing on my portfolio’s recent incremental gains over the course of the next several paragraphs.

Let’s start with the purchases …

This Period’s Purchases

Since my last post, when I talked about Apple being about more than just the iPhone, I initiated a few more positions in my Dividend Farm and added to another.

First, let’s talk about the new ones. I picked up one share of Royal Caribbean Cruises (RCL) for $111.65. I also added two shares of Target (TGT) for $136.91 ($68.45 apiece).

RCL has increased its dividend, which currently sits at an annualized rate of $2.80 (2.45% yield) for each of the last six years. Most importantly, it’s increased that dividend at an annualized rate of 24.8% over the last three. It also has a payout ratio of just 33.37%, meaning the growth could very well continue.

TGT, meanwhile, has been a shining example of what a great DGI stock should be for a long, long time. It’s boosted its divi for 50 years in a row. The current $2.56 annualized payment equates to a solid 3.54% yield and, well, I’m happy to add it to my portfolio for under $70 a share. Keep in mind this is a stock that was trading around $90 a share late in the summer.

Finally, I added seven shares of AT&T for $209.14 ($29.88 each). I turned a 12.09679-share position (producing $24.19 in annual income) to a 19.09679-share position (producing $38.19 in annual income).

All told, I invested a combined $457.70 and increased my forward annual income by $21.92 over the last two weeks.

This Period’s Dividends

I also earned a handful of dividends recently and, now that I invest with Chase, have those dividends immediately reinvested back into the company they came from.

My eight shares of Starbucks (SBUX) earned me $2.88, which in turn purchased another 0.04307 shares; I got $0.57 from the one share of Costco (COST) I own, adding another 0.00261 shares once reinvested; and my single share of Constellation Brands (STZ) earned me $0.74, which added another 0.00387 shares to my position.

Overall, reinvesting the combined $4.19 added $0.08 in forward annual dividend income ($0.06 from SBUX, $0.01 from COST and $0.01 from STZ).

March on!

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