As each month goes by, I am getting more and more excited about my dividend growth portfolio with Loyal3. There are plenty of solid options for a dividend growth investor and the ability to invest with as little as $10 per transaction with NO transaction costs is pretty awesome. Given such a low minimum for a transaction, it enables those looking for instant diversification the ability to take $100 and spread it across ten different companies! Of course the kicker to all of this is the ability to utilize your credit card to make the purchases and pick up the credit card rewards as you arbitrage the system.
So what is my goal for this portfolio? My current plan is to put $300 per month to work every month in whichever equity or equities that provides the best value, in my opinion, at the time of purchase throughout 2014. This goal serves two purposes: 1) It allows me to regularly put cash into the market in smaller batches without worrying about the expense of transaction costs, and 2) Tests out Loyal3 as a service provider so that down the road I can utilize it for larger purchases once I’ve fully vetted the system. So far, so good!
As I mentioned above, Loyal3 allows investors to invest with as little as $10 dollars, per transaction, in 56 different companies. Of the 56 companies, 25 of them appear either on David Fish’s Champions, Challengers and Contenders (CCC) list or are near additions to the list. For those unfamiliar, David’s list tracks those companies who have raised their dividends in excess of 25, 10, and 5 years, respectively.
For the month of March, I made two purchases in this account just over a week ago, both of companies I already held in my Loyal3 account.
March Loyal3 Trades
Purchased Coca-Cola (KO): A long-time dividend growth stock, KO has raised their dividend payment for 52 years in a row, with a recent increase of 2.5 cents per quarter back in February. This increase adjusted their annual payout from $1.12 to $1.22 per share. During this latest purchase, I allocated $80 of my $300 monthly contribution to KO, picking up 2.0942 shares at a cost basis of $38.20 per share. Given the increased dividend, my yield on cost is 3.19% and adds $2.55 to my forward 12-month dividends.
Purchased Unilever (UL): While UL is not quite on the CCC list, but does have a nice history of dividend increases and is a “near” member of the list. One thing to note is that the dividend is paid in Euros, so currency variations can affect how large those dividends look to those of us in the States and elsewhere around the world. Compounding Income did a wonderful piece on the showing the increasing dividend for UL over the last ten years, so be sure to check that out. With that being said, I utilized the remaining $220 of my $300 monthly Loyal3 investment, and purchased 5.5852 shares of UL at a cost basis of $39.39 per share. Given the approximate dividend of $1.46 per share, my yield on cost is 3.71% and adds $8.16 to my forward 12-month dividends.
March Loyal3 Purchase Summary
As with my previous transactions, these took two days to process from the time I put the order in till the time the transactions occurred. Both transactions were made with my credit card and did not receive any additional fees, thus successfully arbitraging the process for credit card rewards. March’s purchases resulted in a total increase of $10.71 to my forward 12-month dividends and carried an overall average yield on cost of 3.57%.
My total no-cost Loyal3 dividend growth portfolio now consists of four holdings with a forward 12-month dividend total of $31.13. The full details of this portfolio can be seen on my Dividend Growth page.
If you are interested in checking out Loyal3 and have questions, feel free to let me know!
What purchases are you looking at making in the near future?