The GOAL of my dividend growth portfolio is to balance increasing share value (Growth) while simultaneously building and producing passive income (Dividends) that can be used during retirement. Currently my portfolio is concentrated more on growth with a dividend yield of 3.41%. As I near retirement I will look to produce more income and less growth. Typically, I deposit $2,000-$4,000 monthly into this portfolio, with $30,500 deposited this year! This portfolio is in addition to my tax deferred ROTH TSP. Currently, I reinvest all dividends utilizing DRIP. As I gain more dividends, I will hand select targeted reinvestment and withdraw the correct percentage to cover anticipated taxes.
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This post covers all of 2022 and compares the results to 2021. Let's take a look!
Table of Contents:
2022 Round-up
This year I retained all of my previous positions and added a few new positions to include Starbucks Stock (SBUX) and Exxon Mobile Stock (XOM). Below is table showing my current portfolio, how many shares I added this year for each, and how many shares were bought with DRIP.
Company | Current Shares | Shares Added in 2022 | DRIP'ed Shares in 2022 |
Apple (AAPL) | 42.387 | 14 | 0.205 |
Costco (COST) | 4.027 | 1 | 0.022 |
Cisco (CSCO) | 40.383 | 14 | 0.94 |
iShares Dividend Growth ETF (DGRO) | 244.41 | 63 | 4.49 |
Disney (DIS) | 19 | 10 | No Dividends |
Consolidated Edison (ED) | 22.177 | 2 | 0.699 |
General Dynamics (GD) | 9.302 | 2 | 0.175 |
Home Depot (HD) | 7.177 | 3 | 0.121 |
JP Morgan Premium Income ETF (JEPI) | 101.49 | 22 | 8.2 |
3M (MMM) | 21.096 | 12 | 0.925 |
Microsoft (MSFT) | 25.235 | 11 | 0.188 |
Realty Income (O) | 61.324 | 33 | 1.64 |
Orian Office REIT (ONL) | 2.055 | 0 | 0 |
Oracle (ORCL) | 23.457 | 8 | 0.305 |
Starbucks (SBUX) | 17.08 | 17 | 0.16 |
Charles Schwab Dividend 100 ETF (SCHD) | 222.54 | 104 | 4.668 |
Visa (V) | 8.087 | 3 | 0.074 |
Vanguard SP500 ETF (VOO) | 9.238 | 0 | 0.152 |
Exxon Mobile (XOM) | 16.113 | 16 | 0.113 |
Portfolio Allocation
I adjusted my portfolio allocation several times throughout the year. I rebalanced each month by targeting investments that were below their goal allocation. Overall, I made two major choices:
I lowered most of my individual stocks to 2% (Down from 3% each)
I increased my allocation for SCHD, O, and JEPI to concentrate more on ETFs.
I made minor adjustments to MSFT and AAPL (lowered) to add Starbucks and Exxon Mobile to my portfolio at the end of the third quarter. I had waited to purchase these a joined late after major returns for both in 2022. The both continued to produce returns after which was great! Below is a pie chart showing my current breakdown:
Portfolio Performance
I began the year with portfolio balance of $52,422 and ended the year just shy of $75,000 ($74,866 to be exact). The increase in my portfolio's balance was due to my additional deposits of $30,500 not from its' performance. The market this year was tough on most investors. My portfolio returned -11.77% compared to -19.44% returned by the SP500. Adjust for dividends, my portfolio returned -8.33% in 2023. This reversal was due and I expected it to happen but not to this degree since my portfolio had returned 28.05% in 2021.
Dividend Performance
As expected, my dividends continued to build this year and I reached a personal milestone of $200 a month, closing the year at $206 a month average. Additionally, my dividend CAGR was 8.47% which is GREAT. Had I been using these dividends as income the increase would have kept my income on pace with inflation.
Both monthly and quarterly dividend payouts nearly doubled throughout the entire year when compared to 2021. I received $407.58 in dividends from December alone.
Dividend Income
My portfolio's income has increased 8.47% organically, meaning my income would have grown 11.88% (including dividend reinvestment) this year even if had I added no additional funds. I invested an additional $30,500 this year and my dividends grew 138.47% compared to 2021. I received $757.19 in dividends in 2021 and $1,809.48 in total dividends this year. Both far cries from the measly $67.19 I got back in 2020.
Looking back twenty four months my income averages $108 a month. My expected future income will be around $206 a month moving forward. Crazy to think I only received $33 in dividends for December 2021 and just received $408 this month. That's a 1,236% increase for December over two years!
Projected Annual Dividend Income (PADI)
My portfolio PADI is $2,483 for 2023 or $206.97 a month on average. My top five dividend payers continue to be JEPI, SCHD, DGRO, O, and MMM. I plan to continue watching my DGRO position. My long term plan is to sell this position to consolidate it into SCHD since SCHD will produce an additional 1% dividend yield compared to DGRO. Additionally, I'll receive an additional boost in income if Disney returns their dividend, something I don't expect until 2024-2025
Closing Remarks
2022 was a hard year on my portfolio but a great year for my dividends. One main advantage to dividend investing that I love is the mindset. Even though the market was down, watching my dividends grow kept me motivated. Additionally, it kept me from getting emotional, one the common mistakes that new investors make! I look forward to seeing the market recover and in turn my portfolio as we move into 2023. I expect it to be a rough start in the first quarter but should improve by mid-2023.
How did your portfolio perform during 2022? Comment Below!
Happy New Year and Happy Investing! Cheers!
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