My Full-Time Fund is my dividend growth stock portfolio. I think it’s an apt name for it, because it works full time so I don’t have to.
Indeed, the Fund generates five-figure dividend income for me that, when combined with other sources of passive income, allows me to choose my endeavors not based on money but rather happiness and purpose. And that is, in my view, how life should really be lived.
The Fund has undergone a lot of changes over the years – changes which I’ve documented as much as possible along the way. And it’s in that spirit of openness and transparency that I continue revealing to the world exactly where I’m putting my money to work (and keeping my money at work).
I’m incredibly proud of the collection of stocks that now make up my portfolio. These are really fantastic businesses. And I’m very happy to own a very small slice of all of them. They have competitive advantages that allow them to, over longer periods of time, grow their profit and dividends, which in turn grows my wealth and income.
My main goal with the Fund, however, is to grow my passive dividend income. Stock prices go up and stock prices go down (I usually prefer the latter), but it’s really the dividend income the Fund generates that is the backbone of the financial freedom that affords me my lifestyle.
So I’ll go over the transactions from the prior month, showing what I bought (or sold), along with a little discussion on the thought process behind these transactions.
There were only two transactions during the month of December. And both of them involved small additions to existing positions.
I first purchased 15 shares of VF Corp. (VFC) on 12/15/16 for $53.51 per share.
VF Corp is a fantastic apparel company that’s been around for more than 100 years.
They own over 30 different brands, including five that exceed $1 billion in annual revenue: The North Face, Timberland, Vans, Wrangler, and Lee.
The fundamentals across the board are fantastic. This is just a really well-run business. And most important to my goals and lifestyle, VF Corp. has increased its dividend for 44 consecutive years. This is a premier dividend growth stock.
I took a look at the valuation for VFC not too long ago, concluding that a reasonable estimate of its intrinsic value was north of $70 per share. It appears to be a great dividend growth stock available for a great price. As such, I think it’s a very strong long-term investment here.
This purchase adds $25.20 to my annual dividend income.
My second and last transaction of the month (and year!) involved me purchasing 10 shares of CVS Health Corp. (CVS) on 12/29/16 for $79.18 per share.
CVS needs no introduction. As one of the nation’s largest pharmacy retailers and pharmacy benefit managers, you almost can’t go a day without seeing or dealing with CVS.
They’re a monster in their space, but the best news of all is that they continue to hand out monster dividend increases. In fact, they just very recently announced a 17.6% increase to their dividend, the 14th consecutive year in which they’ve raised their dividend. As a business partner, that’s music to my ears.
CVS, like VFC, sports a yield right now that’s approximately 100 basis points higher than its five-year average. Again, music to my ears.
I believe the stock is worth substantially more than it’s being sold for right now, so I saw this as an opportunity to average down on a high-quality business.
This purchase adds $20.00 to my annual dividend income.
Netting everything out, I added $45.20 to my annual dividend income.
It’s not much, but it’s money that’s going to come in regardless of what I do. I wake up, go about my day, do what makes me happy, and get paid. It’s pretty much the best job ever. Moreover, that $45.20 will surely organically grow year in and year out as these businesses make more money and share more of that with their respective shareholders.
The Fund is now worth $319,457.72, and it’s spread out across 106 positions. That’s a 3% increase over last month’s published value of $310,239.95. The Fund is on pace to generate $10,808.51 in dividend income over the next 12 months.
All in all, I’m pretty happy with this past month. Wasn’t much going on, which is really my style. Added just a few shares to two really strong businesses while they’re priced attractively. Can’t ask for much more than that.
I also made a big change to the Fund’s spreadsheet.
I changed the last column from a yield column to an income column. So instead of showing the yield of each respective position (which can be found using any stock quoting site), the last column now shows the annual income for the corresponding position.
This may end up supplanting my usual monthly passive income updates, since the annual income can now just be averaged out (on a monthly basis) at any given time. Makes things easier for everyone. It also allows me to divert some of my time, attention, and energy toward my coaching service, which is an incredible new service that I’m having a lot of fun with. As I discussed not too long ago, I plan on making things a lot less about me and a lot more about you guys.
In that spirit, I may even end up publishing a Full-Time fund update like this just once per year, preferring to instead just keep the spreadsheet itself updated monthly and then going over transactions and reasoning at the beginning of each year (reflecting the prior year’s activity).
Looking out over the next month, I still see some appealing dividend growth stocks, even with the broader market near its all-time high. Abbott Laboratories (ABT) and Diageo PLC (DEO) are just a couple examples. I continue to see more and more opportunities to divert my free cash flow elsewhere, however, so we’ll see how much I invest over the next month or so. I’m financially independent now (at a very young age), so the urgency to aggressively invest isn’t really there any longer. However, I’m just barely there, so I’m still interested in bolstering my position as I go (on top of the organic passive income growth achieved via dividend growth).
As a final note, I recommend using Personal Capital to manage your portfolio. It aggregates your accounts and gives you powerful visualizations that are actionable. The best thing of all is that it’s free!
How was December? Did you finish the year strong? Any attractive dividend growth stocks on your radar? Are you interested in building your own Full-Time Fund? Check out my financial independence coaching service.
Full disclosure: I’m long all aforementioned stocks.
Thanks for reading.
Image courtesy of bplanet at FreeDigitalPhotos.net.