The Boring Invstr - Your Simple & Digestible Weekly Investing & Finance Newsletter

Hello Boring Invstrs,

Welcome Back to The Eleventh Edition of The Boring Invstr!

P.S. Read all the way down for the easiest way to become a dividend growth investor with minimal work.

What We Are Covering This Week:

Dividend Growth Investing - What it is, how you can use it, and examples of real dividend growth companies.

What Is Dividend Growth Investing?

Dividend growth investing is an investment strategy that involves buying stocks of companies that have a history of increasing their dividends over time. Like the past two strategies, dividend growth investing will be the most successful with strong fundamental companies over a long-term approach.

Dividend growth investing can also be a good strategy for investors who are looking for a steady stream of income from their investments. Although dividend income will be small at first, reinvesting dividend payments back into dividend-paying companies will be your best bet in growing your dividend income over time.

How You Can Use Dividend Growth Investing

A Few Things to Look For:

• Dividend Yield - This is the amount of the dividend paid out as a percentage of the stock price.

  Most financial data sites like Yahoo Finance will have this with other financial metrics, but if you want to calculate it on your own the formula is below:

  Dividend Yield = Annual Dividend per Share / Share Price

• Dividend Growth Rate - This is the annual growth rate the dividend has increased over time. A growth rate is a positive sign as it illustrates that the company is increasing its net profits year-over-year.

  Like with dividend yield, Yahoo Finance or any other similar site will have the dividend growth rate with the company’s other metrics, but below is the formula if you want to calculate it on your own.

  Dividend Growth Rate = Dividend of Year X / (Dividend of Year X - 1) - 1

  Year 1 - $1.00

  Year 2 - $1.10 (Year 2) / $1.00 - 1 = 10%

• Financial Strength/Leadership/Sector Analysis - I won’t waste much time here as I talked about these things in the previous two editions of this series. Strong financial companies in strong future-proof sectors led by proven leaders over the long term have a good chance to succeed.

  Access annual reports, and sites like Yahoo Finance, as well as LinkedIn to get a grasp on the metrics, future direction, and leadership of the company you are analyzing.

Popular Dividend Growth Stocks Include:

• Coca-Cola (KO): Coca-Cola has been paying dividends for over 125 years with a yield of 3%. It has increased its dividend for 58 consecutive years and showcases a dividend growth rate of 9%.

• Walgreens Boots Alliance (WBA): Walgreens has increased its dividend for 45 consecutive years with a dividend yield of 3.4% and a dividend growth rate of 7.0%.

• Mastercard (MA): Mastercard has a dividend yield of 0.7% and has increased its dividend for 17 consecutive years. It also has a dividend growth rate of 15%.

The Easiest Way to Become a Dividend Growth Investor:

The easiest way to become a dividend growth investor is to invest in dividend-yielding ETFs. Charles Schwab, Vanguard, and Fidelity all have ETFs designed specifically for dividends. These are perfect for those who don’t have the motivation or time to research dividend growth companies as Charles Schwab, Vanguard, and others have already done the research for you.

Popular Dividend ETFs:

REITs are also great dividend-paying options. They are a great way to diversify your portfolio and minimize risk.

Popular REITS:

Dividend growth investing is a long-term investment strategy. Being patient and disciplined will help you build your investment portfolio as well as give you thousands of dollars in income per year. This is a strategy that takes time, but the likes of Warren Buffett and John Bogle have used dividend growth companies to steadily grow their portfolios.

That’s all for this week. Have a great week and see you next week!

Trey