Summary
- Building a portfolio that pays equal monthly payments is not too hard.
- You can simplify your monthly account withdrawals.
- You can know exactly what you make each month.Well, I have developed a dividend growth portfolio that essentially pays out the same cash flow in each month. The portfolio contains 13 dividend growers that all, but one, can be found in David Fish’s currently available Champions, Contenders and Challengers or CCC spreadsheet. The stock not in the spreadsheet is GlaxoSmithKline PLC (NYSE:GSK). Glaxo doesn’t show up on the CCC list because of uneven dividend payments that seem to be typical of many foreign stocks. But GSK is no slacker when it comes to dividend growth. Its five-year dividend growth rate is 7.45% and it sports a current dividend yield of 6.18%.In order to get the payout equal each month, I found 4 stocks each that begin dividend payments in January, 4 that started payments in February and 4 that started payments in March. Then to sweeten the deal I added one stock that pays a dividend each and every month of the year. This was also done to make sure I had some good diversification in the portfolio. I tried to cover all the bases. There is one utility, one REIT, one telecom, one big pharma, one insurance, one oil and gas, one consumer discretionary, two banks, and three industrials. To make the dividends equal for each month I chose $1000 as the amount I wanted each investment to pay annually. Then I simply divided the annual dividend payment of each stock into $1000 in order to find how many shares I needed to buy for each stock.
- One other stock in the portfolio needs a special mention. Aircastle Ltd. (NYSE:AYR) is a Near Challenger at the present time. Which means it only has streak of four years of dividend increases. However, I believe it is on track to become a Challenger this year.
- There’s nothing like being regularly rewarded for your hard work. At our day jobs we normally receive a pay check at least monthly. However, when we start investing we notice that our investments usually pay us on a quarterly basis. And not all of our investments start their payments in the same month. Some start dividend payments in January, others, in February and many others in March. This can cause gaps in payments for our portfolio throughout the year. Some months you may receive little or no dividend payments. Wouldn’t it be nice to receive the same or close to the same amount of cash dividends each month? It certainly would make budgeting cash withdrawals from your portfolio accounts much easier!
Contact us for more information. Jim 404-290-9982 or email jm@oaktreecapitalllc.com
