Dividend Aristocrats – A Path to Growing Your Income

  • Income Growth Over Time
  • Annualized Return Since Inception of 8.03%
  • Average Current Yield of 3.52%

A monthly performance review of the Dividend Aristocrats, a diversified blue chip stock portfolio built around some of the highest yielding dividend payers listed on the S&P 500. We also examine the various benefits the strategy can offer investors in volatile markets.

 

(performance is net of fee, 9-17-19)


Performance Highlights

 

  • Annualized Return Since Inception of 8.03%

  • Average Current Yield of 3.52%


Growth Over Time


The Dividend Aristocrats Portfolio was designed to grow both income and principal over time.  This is due to the stock of these blue chip companies being considered “aristocratic” with respect to the dividend paid to shareholders, or rather the dividend being consistently increased.  


If one of the stocks in the portfolio does not raise the dividend paid to shareholders over the course of the year it is replaced with the next highest yielding blue chip aristocrat.  


Through this process, the portfolio is constructed to target only the highest yielding dividend payers with long histories of increasing their dividends, over time equating to growing income. Additionally, the benefits of growth of income and growth of principal are especially pronounced when dividends are reinvested over time, adding significantly to total return. 


Income & Portfolio Diversification


Not having your eggs all in one basket is a smart idea, and so is not relying on just one stream of income.  Most investors seek investments that produce growth or income, but do not generate income growth. Durig believes that its Dividend Aristocrats Portfolio’s ability to grow income over time should award it a place in almost every portfolio.

 

Do you want to grow your income over time? 


For investors lacking exposure or seeking dividend paying stock investments, the large assortment of blue chip dividend stocks contained in the Dividend Aristocrats Portfolio  are a simple way to diversify income streams while also improving overall portfolio diversification


Dividend Resilience


A company’s stock dividends are generally less volatile than company earnings over time.  Increases to dividends are often a signal of confidence to investors, as they are usually representative of consistent growth and strong cash flow.  For many of these blue chip companies, the longer the history of increasing their stock dividends, the less volatile (and more resilient) these stocks (and their dividends) tend to be. 


For example, take a look below at the more recent historical dividend payouts of another notable blue chip contained in the portfolio, AT&T (NYSE:T). This aristocratic blue chip company that has increased their dividend paid to shareholders each and every year for the last 15 years.

 

(Source: Macrotrends)


In this time span, AT&T’s annual dividend, once 50 cents are now at $2, representing a change of about 400%
(or growth of about 5.5% each year when dividend increases are compounded). These dividend increases are what allow the Dividend Aristocrats Portfolio to grow income over time. 

The portfolio targets just these types of blue chips for their aristocratic nature, and hopes to see them held in the portfolio for another 15+ years.  As treasuries become less attractive, many investors seek out investments that produce income as an alternative.  We believe investors should be seeking investments that grow income over time instead.


Shareholders Come First

One of the key merits of the Dividend Aristocrats Portfolio is that the blue chip companies it contains have very long and established track records (often 10-15 years or more) of increasing their dividends, and in turn increasing shareholder value.  When a company chooses to increase a dividend paid to shareholders, it is validating and rewarding their shareholders’ confidence in the company through its actions rather than words.

 

In today’s uncertain world, it is nice to see that some businesses still place shareholders first.

 

AT&T is an excellent example of a blue chip company from Durig’s Dividend Aristocrats Portfolio that has done an excellent job of prioritizing shareholder interests, with its long history of dividend increases, paying out between 60-90% of retained earnings back to shareholders in the form of dividends.

 

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Summary

 

The Dividend Aristocrats Portfolio was constructed in a manner that allows investors to participate in the trends of equity markets while also growing income and principal over time.  The resilient and increasing dividends paid by the blue chip stocks in the portfolio are what allow it to produce income growth over time, and also help to lessen historical volatility and aids in diversifying income.  To date, the portfolio has continued to perform as designed, even outpacing the closest benchmark with its very competitive lifetime return of 8.03%.

 

For investors wishing to participate in equity market trends with less historical volatility, and seek growth of income and principal over time, Durig’s Dividend Aristocrats Portfolio appears to be an excellent solution.
To learn more, call us at (971) 732-5119, or email us at info@durig.com.

 

Durig has several high yield portfolios available, click below to learn more.

 

Fixed Income 2 – FX2

Dividend Aristocrats

Income Aristocrats

Dogs of The Dow

Dogs of The S&P 500


TD Ameritrade Advisors

 

Durig is now offering its highly successful Fixed Income 2 (FX2) Portfolio, the Dividend Aristocrats 40 Portfolio, and the Income Aristocrats Portfolio to clients of other Registered Investment Advisors through segregated accounts at TD Ameritrade Institutional. Please ask us to learn how this might work for you and your current advisor.

 

Disclaimer: Past performance is no indication of future success. Any market data or performance shown is this publication is as of 9-17-19. * The Primary Benchmark used is S&P 500 TR Idx. The high yield strategies presented in this review by Durig Capital may not be suitable for all investors.  This is not investment advice from Durig Capital, nor a specific recommendation to buy or sell securities. If you have any questions or concerns about its suitability for your personal investment, you should seek specific investment advice from a registered professional before making an investment decision.

Durig's FX2

Durig's FX2 Is A High Yielding, Short Term, Low-Cost, Managed Income Portfolio, designed for performance. The FX2 Portfolio specializes in converting raw wealth into much higher levels of income, and in turn, increased quality of life for clients. Durig’s FX2 Portfolio has, over time been known to have historic periods of significant outperformance. As a fiduciary first and foremost, we provide our Advisory clients with a personalized fiduciary service at a very low-cost. Ask about our many services today!
http://fixed-income2.com/

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