Former iPIG Portfolio - Quarter end Update - 30-SEP-2022

According to its current value snapshot as of 10:40 p.m. eastern on 30-SEP-2022, the former iPIG portfolio is worth $97,038.62. That number may change a bit when the broker publishes the monthly statement, but it probably won’t change all that much. Per its June 2022 statement, the former iPIG portfolio was worth $101,738.14 at the end of June. That’s a decline of $4,699.52, or about 4.6%.

By comparison, the S&P 500 index tracking ETF SPY closed at $357.18 on September 30, 2022, vs. $377.25 on June 30, 2022 (or a dividend-adjusted $375.71, per the Yahoo! Finance Dividend Adjusted closing price). Dividend-adjusted, SPY declined around 4.9%, so the former iPIG portfolio slightly “outperformed” that index for the quarter. Of course, since the portfolio declined, it’s cold comfort to have outperformed the index.

All that said, the portfolio’s primary design target was to receive an increasing dividend stream that grew fast enough to fight off inflation. And on that front, it performed a bit better. The former iPIG portfolio received $781.78 in dividend-like income in the quarter, vs. $684.62 for the same quarter last year. That’s an increase of $97.16, or around 14.2%. That compares favorably vs. the 8.3% year over year CPI that represents the most recent inflation number published by the Bureau of Labor Statistics.

Part of the increased dividend income came from the replacements mentioned in last quarter’s update: Quarter End Update - Former iPIG Portfolio , where I had replaced companies that had suspended and hadn’t resumed their dividends with one that still showed a track record of dividend growth. Lapping “nothing” with “something” looks like tremendous growth.

Still, some of the companies in the account did increase their dividends during the quarter, which also boosted the portfolio’s take. Those increases include General Mills, Synchrony Financial, UNUM Group, J.M. Smucker, Wells Fargo, Dover and Ryder System. Not every increase kept pace with inflation, but every increase certainly helped and were appreciated.

In addition, several other companies in the portfolio were still paying higher dividends than they had in the same quarter last year, which is fitting for a portfolio that actively looked for companies with histories of increasing their dividends.

All in all, I am glad that the portfolio continues to perform more or less in line with its primary design target, especially since inflation has been so darn high. I remain cautiously optimistic that it will continue to do so for the rest of 2022, but I am concerned that if stagflation and rising interest rates continue into 2023, it will get tougher for companies to continue increasing their dividends as their costs escalate.

Rising dividends have been the pleasant financial surprise of the year. Given everything happening in the world, I am quite shocked that the trend has continued this far, but I’ll certainly take it.

Regards,
-Chuck
Home Fool

Disclosure, I own shares of General Mills, Synchrony Financial, UNUM Group, J.M. Smucker, Wells Fargo, Dover and Ryder System (as well as the other companies in the former iPIG portfolio).

2 Likes

Hi Chuck,

Could you post a current list of tickers owned by the port?

Thanks,

Rich

Hey Rich – sure. Just please recognize that this is not a recommendation to buy, sell, or hold any securities. Note that despite my best of intentions, it has been far more difficult than I would like to come up with the time to do a decent review of my holdings… On a cursory review, there are at least a handful on this list where the business conditions are a bit rough at the moment and thus may be at risk of dividend cuts (or at minimum, failure to raise their dividends).

Aflac (AFL)
Broadcom (AVGO)
Carrier (CARR)
Cisco (CSCO)
Dover (DOV)
Emerson Electric (EMR)
General Mills (GIS)
Genuine Parts (GPC)
Hasbro (HAS)
Kinder Morgan (KMI)
3M (MMM)
MSA Safety (MSA)
Microsoft (MSFT)
Otis Worldwide (OTIS)
Patterson Companies (PDCO)
Prudential (PRU)
Ryder System (R)
Raytheon Technologies (RTX)
JM Smucker (SJM)
Seagate Technology (STX)
Synchrony Financial (SYF)
Texas Instruments (TXN)
UNUM Group (UNM)
Union Pacific (UNP)
United Wholesale Mortgage (UWMC)
Wells Fargo (WFC)

Regards,
-Chuck
Home Fool
Disclosure: I own shares of every company listed in this post.

1 Like

Thanks Chuck,

In the interest of saving you some time, I kicked the tires on all of these. All data from either Yahoo or SA. This is a pretty wide table so lets see how the new system handles:

Current IPIG Portfolio: Divi
Annual 5-Yr Years Interest
Ticker Company Dividend Quote Yield MRI CAGR Growth Sector Industry Payout Coverage
GPC Genuine Parts (GPC) $3.58 $149.32 2.40% 9.82% 5.80% 65 Years Consumer Cyclical Distributors 44.2% 22.7
HAS Hasbro (HAS) $2.80 $67.42 4.15% 2.94% 4.19% 1 Years Consumer Cyclical Leisure 71.1% 5.3
GIS General Mills (GIS) $2.16 $76.61 2.82% 5.88% 1.96% 2 Years Consumer Defensive Packaged Foods 51.0% 8.5
SJM JM Smucker (SJM) $4.08 $137.41 2.97% 3.03% 5.51% 19 Years Consumer Defensive Food Products 46.1% 7.0
KMI Kinder Morgan (KMI) $1.11 $16.64 6.68% 2.96% 17.33% 4 Years Energy Oil and Gas Midstream 102.1% 2.7
AFL Aflac (AFL) $1.60 $56.20 2.85% 21.21% 13.22% 39 Years Financial Services Insurance 25.3% 24.5
PRU Prudential (PRU) $4.80 $85.78 5.60% 4.35% 9.86% 13 Years Financial Services Insurance 39.6% -
SYF Synchrony Financial (SYF) $0.92 $28.19 3.26% 4.55% 8.92% 1 Years Financial Services Credit Services 13.0% -
UNM UNUM Group (UNM) $1.32 $38.80 3.40% 10.00% 7.49% 13 Years Financial Services Insurance - Life 23.7% 8.3
UWMC United Wholesale Mortgage (UWMC) $0.40 $2.93 13.65% 0.00% #DIV/0! 0 Years Financial Services Mortgage Finance 69.0% 5.2
WFC Wells Fargo (WFC) $1.20 $40.22 2.98% 20.00% -5.11% 1 Years Financial Services Banks 21.6% -
PDCO Patterson Companies (PDCO) $1.04 $24.02 4.33% 0.00% 0.00% 0 Years Healthcare Medical Distribution 52.8% 42.2
CARR Carrier (CARR) $0.60 $35.56 1.69% 25.00% #DIV/0! 1 Years Industrials Building Products and Equipment 18.0% 8.5
DOV Dover (DOV) $2.02 $116.58 1.73% 1.00% 5.85% 65 Years Industrials Specialty Industrial Machinery 25.5% 12.3
EMR Emerson Electric (EMR) $2.06 $73.22 2.81% 1.98% 1.21% 25 Years Industrials Specialty Industrial Machinery 39.0% 17.2
MMM 3M (MMM) $5.96 $110.50 5.39% 0.68% 4.86% 63 Years Industrials Industrial Conglomerates 60.1% 14.1
MSA MSA Safety (MSA) $1.84 $109.28 1.68% 4.55% 5.62% 21 Years Industrials Commercial Services & Supplies 35.6% 18.1
OTIS Otis Worldwide (OTIS) $1.16 $63.80 1.82% 20.83% #DIV/0! 1 Years Industrials Specialty Industrial Machinery 36.4% 14.2
R Ryder System (R) $2.48 $75.49 3.29% 6.90% 6.15% 2 Years Industrials Road & Rail 16.5% 5.1
RTX Raytheon Technologies (RTX) $2.20 $81.86 2.69% 7.84% 5.78% 28 Years Industrials Aerospace & Defense 44.7% 5.2
UNP Union Pacific (UNP) $5.20 $194.82 2.67% 21.50% 16.53% 15 Years Industrials Road & Rail 44.1% 8.1
AVGO Broadcom (AVGO) $16.40 $444.01 3.69% 13.89% 32.08% 10 Years Technology Semiconductors & Semiconductor Equipment 46.9% 7.3
CSCO Cisco (CSCO) $1.52 $40.00 3.80% 2.70% 5.55% 10 Years Technology Communications Equipment 44.6% 39.0
MSFT Microsoft (MSFT) $2.72 $232.90 1.17% 9.68% 10.12% 17 Years Technology Software 27.0% 40.7
STX Seagate Technology (STX) $2.80 $53.23 5.26% 4.48% 2.13% 3 Years Technology Computer Hardware 38.1% 7.9
TXN Texas Instruments (TXN) $4.96 $154.78 3.20% 7.83% 14.87% 16 Years Technology Semiconductors & Semiconductor Equipment 47.6% 52.7

My findings:

HAS, KMI, R, RTX all have interest coverage less than 7.

KMI also has a payout ratio exceeding 100%.

PDCO hasn’t increased its dividend in the last 5 years.

EMR’s dividend growth has been under 2% for the last 5 years.

DOV’s most recent increase was only 1%.

Maybe that will save you some time.

Rich

3 Likes

Thanks, Rich. I appreciate it.

Regards,
-Chuck
Home Fool