For the past two years, I’ve laid out exactly 3 goals for my dividend Portfolio.  In each of those years, I’ve only succeeded in achieving 2 of the 3 goals.

In 2019, I was able to reach my new capital investment goal, and my dividend income goal, but fell short of my forward dividend income goal.

What’s it going to take to go 3 for 3 in 2020?  Easier goals!

Well, I won’t be doing that.  I’ve got to challenge myself a bit, right?

I liked the 3 goal categories I set up last year, so I’ll be sticking with those.  I’ll just have new $$$ targets for them.

However, I’m going to toss in a couple of bonus goals and see what happens.  They are not necessarily dollar amount related, but could help shape my Portfolio by year’s end.

Let’s see what’s in store for my 2020 goals…

 

Portfolio Goals for 2020

1) Invest at least $10,000 of new capital in the Portfolio

As it turns out, this is the exact same first goal as last year.  I did a good job projecting the amount of capital I might have available to invest last year, and it appears to me that having the same amount available for 2020 is likely.

I would think $6,000 ($500/mo.) is the minimum investment I’d achieve in 2020, and perhaps $12,000 ($1,000/mo.) is the maximum.  Of course, I could have some additional cash free itself up for Portfolio investment, but I can’t count on that.

 

2) Reach $12,500 in annual forward dividend income

I’m starting 2020 with a annual forward dividend income of $10,804.29 (or ~$900.36/mo.).  This was a gain of ~$1,528 over the course of 2019.

To reach $12,500 by the end of 2020, I’ll need to add just under $1,700 in additional forward dividend income over the course of the year.  This would put me at an average of $1,041.67/mo. by year’s end.  Wouldn’t that be nice?

I believe I will get to ~$12,250 without too much trouble given this outline:

• Invest the $10K mentioned above at my current 2019 starting portfolio yield of ~3.00% (i.e. ~$300 in additional forward dividend income due to new capital investment)
• Reinvest the $10,804.29 in annual forward dividend income that I’m starting the year with at my current Portfolio yield of ~2.50% (i.e. ~$270 in additional forward dividend income due to dividend reinvestment)
• Realize a weighted average 8% dividend raise across the current Portfolio holdings (i.e. ~$864 in additional forward dividend income due to dividend raises)

As you can see, once again I’m expecting the largest chunk of additional forward dividend income to come from dividend raises.  I can’t say enough about the power of the dividend raise.

Adding it all up, that’s ~$1,434 in additional forward dividend income that I’m planning on to essentially get me to the $12,250 number.  Close to my goal, but no quite there.

I can find the final $250 in additional forward dividend income needed to obtain the $12,500 goal in the following ways:

• Invest more than $10K in new capital
• Invest the new capital (or the reinvested dividends) at a higher yield than I projected (3% for new capital investment, and 2.5% for reinvested dividends)
• Get a larger weighted average dividend raise than the projected 8%.  I’m not sure yet where I ended 2019 in terms of weighted dividend growth.  It was probably less than 8%, but I have a feeling that 2020 will bring us some better dividend raises than we saw in 2019.
• Make some strategic stock swaps, trading one or more lower-yielding investments for higher-yielding ones.  This happened a couple of times over the course of 2019.

 

3) Obtain $11,700 in actual dividend income

As the years go by, and my Portfolio grows, my Year-over-Year (YoY) percentage increase in dividend income has been dropping, especially since my new capital investment amounts have been coming down at the same time.  At least this year, I’m not expecting a reduction in my new capital investment!  Last year, I was able to achieve an ~18.8% increase in dividend income.  With my projection of having the same amount of new capital to invest in 2020, and expected dividend raises in 2020 being as good or better than 2019, I’m going to project a maximum 19% YoY increase in dividend income for my Portfolio, with 15% a realistic target on the low end.

Since I collected $10,049.68 in 2019, a 15%-19% increase would put my dividend totals in the $11,557.13 to $11,959.12 range.  Looking at that range, I see $12,000 isn’t too far above the upper end.  I’d love to reach that level (for a $1K/mo. average).  However, I think that may be a stretch.  Therefore, I’m going to target an ~$1,650 increase (a little over 16%), giving me $11,700.

 

Bonus Goal #1 – Increase the weighting of Technology in my Portfolio

For the past 2-3 years, I’ve been saying I’d like to increase the weighting of my Technology holdings.  This has proven to be somewhat difficult for me, as the Technology sector seems to present fewer values than other sectors, especially during the bull market we’ve had the past decade.  On top of that, given the fast growers in the Tech sector, I’d think there are less dividend-paying stocks in the sector on a percentage basis than in other sectors (of course, maybe I’m wrong and that’s just my perception).  Anyway, I’d like to get my Tech weighting to be within 5% of the Tech weighting of the S&P 500.  As the year began, my Tech weighting was 8.81% below that of the S&P 500.  This one feels like quite a challenge.  However, let’s see what I can do with it.

 

Bonus Goal #2 – Add a Utility stock to my Portfolio.

Since my sale of SCANA in June of 2018, my Portfolio has been void of any Utility stocks.  In general, I’m not a big fan of Utility stocks at this stage of my Portfolio’s existence.  The higher yields that come with Utilities is nice, but the growth is often not significant.  Since I don’t have a current need for the dividend income to cover my expenses, I’d rather lean toward growth over yield at this point.

That said, one would think I could find one Utility that’s growing at a nice clip, and growing their dividend a decent amount, too.  This way, I can have one representative from the Utility sector in my Portfolio (similar to Exxon Mobil being my lone Energy sector stock).  I’ve had my eye on NextEra Energy (NEE) for a while, but haven’t found an entry price to my liking.  Maybe NEE can retreat in price over the course of 2020.  If not, I’ll try to scout out a few more candidates.  Feel free to offer up a candidate or two that you think might meet my criteria.  I can then do some research.

 

Summary

It’s 5 goals in total for me this year.  One investment goal, two dividend goals, and two bonus goals for my dividend Portfolio in 2020.

As usual, I hope to achieve them all, but since I haven’t done it either of the past two years, I won’t get my hopes up.  Just pursuing the goals will mean good things for my Portfolio though.

I’ll check in on my goals progress in the middle of the year (July).  See you then…

 

Last year I strived to reach my $10K dividend income goal.  Do any of your 2020 goals stand out to you as “the one” you want to achieve?  Please share in the Comments!