How My 2017 Dividend Growth Projections Fared

My year is pretty much wrapped up for my holdings announcing dividend increases for the year.  Last October, I came out with my dividend increase projections for 2017.  Now it’s a little over a year later and time to review how my estimates actually turned out.

There are a few modifications to the original projections due to a few mergers.  DD and DOW finally completed their merger, so both positions have been eliminated on the new spreadsheet and are reflected in the position of DWDP.  It’s still early in the merger, so the dividend policy is not clear.  I did not expect any increase from DD or DOW for 2017 because of the merger, so I carried that expectation to DWDP for 2017.  Also, NRF and NSAM were involved in a crazy three way merger with Colony Square, and are reflected in the new company CLNS.  Same here, no expectation of an increase from NRF and NSAM, so I held that constant for CLNS.

This brings the dividend holdings down to 46 due to M&A and is reflected in the year end spreadsheet.

So with out further adieu, here is how the projections fared:

So, to summarize the spreadsheet.

My initial expectations for 2017 were for 75% or 36 of my holdings to announce increases to their dividends.  I projected 0% or no companies to announce decreases for the year.  And 12 companies or 25% of my dividend portfolio to have no change to their dividend.

The actual figures turn in real close to my expectations.  For 2017, 34 holdings or 74% of my dividend portfolio announced increases, 1 company or 2% decreased the dividend, and 11 companies or 24% announced no change to the dividend.  These figures are real close to 2016.  In 2016, 36 holdings or 75% of my holdings announced increases, 2 companies or 4.17% announced decreases, and 10 positions or 20.83% just maintained their dividend.  I believe this speaks volumes for companies that maintain a dividend growth policy and have a history of doing so.

If we dig a little deeper and look at the projected dividend versus the actual dividend, 71% of my holdings met or exceeded my expectations for the actual increase.  Broken down further, 19 holdings met expectation or 41%, and 14 companies or 30% beat my increase projections.  28% or 13 companies came in below expectations for the year.

The sole dividend cut for the year was ERIC, which slashed the dividend by 74%.

The reason I track and make projections of future dividends on a company are for purposes of estimating my future dividend income for upcoming quarters and years.  The goal is to maintain a portfolio of dividend paying stocks, who will increase their divided (which translates into income for me) at a rate that at least outpaces inflation and at the least grows by about 5% per year.  I also like tracking the dividends to see how long it takes for the income to double.

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Readers Comments (18)

  1. This is a great exercise. I do the same for my portfolio of dividend payers so I can set an expectation of how much my income will rise organically. Tom

  2. You were impressively accurate. Looking forward to reading your projections for next year.

    • It’s actually pretty simple. Most of these companies are highly predictable with the dividends. If they have a couple decades of increasing payments, chances are highly likely they will do what it takes to continue the streak. This helps protect me against inflation long term.

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