Introducing The Dividend Growth Index

Very recently, Mike over at The Dividend Guy Blog spearheaded a project to get fellow dividend investment bloggers together to form what is now called the Dividend Growth Index. You can find more information here, but basically the index is a group of stocks picked by a total of seven bloggers, who picked three stocks each for a total of 21 individual stocks.

The point behind this index is not a stock picking contest to see which equity gains the most. The real success with dividend investing lies behind the power of compounding over time. Each blogger will keep track of his three stocks, collect the virtual dividends in a “cash account” and reinvest them back into one of the companies annually. We’ll be posting quarterly reports so everyone can follow along in the fun.

I think this is going to be really interesting! The following bloggers are all participating; I’m including a brief synopsis of each blogger’s background along with their three picks:

The Dividend Guy 

The Dividend Guy has an extensive background in investing and has one of the more well-known dividend blogs. He has a pretty large dividend portfolio and focuses on dividend growers. His three picks:

Intel (INTC:US)
Coca-Cola (KO:US)
National Bank of Canada (NA:T)

The Passive Income Earner

The Passive Income Earner runs a great blog that has a lot of individual stock analysis, personal finance tips and he keeps track of his passive income as it builds over time. His three picks:

Canadian National Railway (CNR:T)
Canadian National Resources (CNQ:T)
Aflac (AFL:US)

Dividend Monk

Dividend Monk is not actually a monk. However, he does propose a minimalist approach to life which means living below your means and building your wealth through investing. His three picks:

Wal-Mart (WMT:US)
Novartis (NVS:US)
Energy Transfer Equity (ETE:US)

My Own Advisor

My Own Advisor is a DIY investor that has some great information on dividend investing as well as index investing. You can get the best of both worlds here. His three picks:

ScotiaBank (BNS:T)
Abbott Laboratories (ABT:US)
CML Healthcare (CLC:T)

Dividend Ninja

The Dividend Ninja is not a real ninja, if you see a theme. He does propose investing like one. He likes to be smarter than his opponent (the market) and strike quick. His three picks:

Husky Energy (HSE:T)
PepsiCo (PEP:US)
Staples (SPLS:US)

The Wealthy Canadian

The Wealthy Canadian is living my dream: he semi-retired at the ripe age of 33! He has attained financial independence and he tries to help others attain it too. His three picks:

Royal Bank of Canada (RY:T)
Daylight Energy (DAY:T)
Progressive Waste Solutions (BIN:T)

Dividend Mantra

Yours truly. I’m trying to become financially independent by 40 years old on a middle-class income by living frugally and investing monthly in dividend growth stocks. My three picks:

ConocoPhillips (COP:US)
Philip Morris International (PM:US)
Procter & Gamble (PG:US)

I think this is a solid grouping of dividend stocks. You’ll see a lot of picks from Canada here, as quite a few of the bloggers participating are actually from Canada. I’m pretty sure Dividend Monk is the only other American (besides me) participating in this project. This index has a pretty decent average dividend yield of 4.26%. That’s over twice the 10-year Treasury yield!

I’ll be posting an overview of my three stocks, as well as why I picked them, in one week.

Full Disclosure: I’m long PG, PM, COP, AFL, WMT, PEP, ABT, KO, INTC. You can see all my holdings here.

Thanks for reading.

Comments

  1. says

    Great job DM!

    Like you, I’m very excited about being involved in this project. I think we have a solid group of dividend investors involved and it will be great to see how we collectively perform.

    I’m looking forward to the various comments from readers and contributors in the months to come; hopefully, they enjoy the series and see the initiative as value-added.

    Cheers,
    TWC

  2. Anonymous says

    This sounds like a great project and I look forward to following the results. As I read about it and the participants, I couldn’t help thinking about some of the alliances of comic book superheroes (Marvel Avengers, D.C. Justice League, etc.) I followed as a kid. And, well OK, still occasionally enjoy as adult. Almost like a collection here of dividend investor superheroes. Hmmm, maybe this is a comic book concept in the making. In the meantime, don’t let the analogy go to your heads.

    But seriously, it sounds like collection of solid choices from a group of dedicated dividend investors. I try to follow three of the blogs (D. Mantra, Ninja and Monk) as often as possible and I’ll definitely have to check out the others. I also feel good that at least one pick out of each set of three is either a stock in my portfolio (ABT, PG, PEP), or a stock I came close to picking and still might at some point in the future (INTC, CNI, RY and NVS).

    I know some posters have been offering their three picks as food for thought. So, here’s my very modest two cents worth.

    Johnson & Johnson (JNJ)
    Exelon (EXC)
    TD Bank (TD)

    -Rock the Casbah

  3. says

    Rock,

    Well if we’re superheros I’m putting dibs on Batman. Just call me the Dividend Crusader!

    Thanks for your encouragement and I like your picks. JNJ is actually my largest holding as of today and I plan to add to it as funds allow. It’s trading a bit above my cost basis right now, but it’s still attractive of course.

    EXC is interesting with the large nuclear operations, but I’ve been concerned about the lack of (dividend) growth. The entry yield is pretty juicy though.

    I don’t know a lot about TD, but it seems to be one of the stronger banks available.

    Take care!

    -The Dividend Crusader :)

  4. says

    This looks like an interesting project.

    Although I wonder how useful it will be. I live in Chicago, Illinois, USA, and some of these stocks are for Canadian companies and only trade on Canadian exchanges. Canadians have just as much of a right to financial freedom as the rest of us, but if I can’t buy those stocks then posts about those stocks will not do me too much good.

    I think my broker allows me to buy on non-US exchanges, but there is an extra cost. Before I was a dividend investor I was an index investor. I like to keep things simple. Buying on multiple exchanges would complicate things. Plus I do not want to worry about exchange rates. I do own some Vodaphone ADRs. I will probably buy some Canadian stocks that trade on the NYSE in a few years.

    I have noticed there seem to be a lot of dividend bloggers who are Canadian. Why is that?

    And if any Canadians are reading: Do Canadian brokers allow you to buy shares on American exchanges? If so, are there extra fees?

  5. says

    Everyday Freethought,

    Thanks for stopping by!

    First off, I read some of your blog and I’m disappointed that you have such a negative opinion on Chicago. I personally think that is a wonderful city. I’ve never lived there, but would be open minded to it. I’ve spent a lot of time in and around Chicago due to training for my job. It’s a beautiful city. The things that keep me away are the taxes and climate. Otherwise, a superb city.

    On the DGI project, I understand your concerns. This project crosses borders and offers options for American investors as well as Canadian investors. Some of these securities will be difficult to invest in if they aren’t available on our exchanges, but it makes it fun to track.

    There does seem to be a disproportionate amount of dividend bloggers from the Great White North. I’m not sure why that is. At any rate, this project spans both sides of the border pretty equally…so it does open up the exploration of other opportunities.

    Best of luck in your own journey. And best wishes if you decide to move to Texas.

    Also, I like James Altucher’s blog as well.

    Best regards.

  6. says

    Everyday Freethought,

    I’m Canadian, no extra charges for us to buy shares on the NYSE. You do lose a little on the currency exchange though. I figure my discount broker (also the same as my bank) has to make money somehow. I’m not happy about the currency exchange rate, but I do own shares in the bank which pays a healthy dividend :)

    I too have wondered about the number of dividend bloggers from Canada. Maybe its the long winter that keeps us glued to the computer? ;)

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