fall in love with a stock only to have your heart, and brokerage account, broken. As an investor that takes a value approach to selecting the best dividend growth stocks, I tend to focus on fundamentals with a heavy dose of analysis. It may be surprising but even this approach will favor certain stocks over time.
A sometimes irrational market will pull down the good stocks with the bad. This is an exciting time for long-term value-focused investors - it creates opportunity. Over time the idiom 'the cream rises to the top' has merit and works in the investing world. Great stocks won't stay down forever. Eventually, they will surge back to the top.
Taken to the next level, certain stocks in my dividend growth portfolio tend to be purchased more often than others. This will often pushes the limit on my maximum allocation limit of 5% per holding in the portfolio. Sometimes, the high allocations are a result of buying up to the limit when the price is down. While other times it is a conscious decision to slightly exceed the 5 % threshold.
Below are my 5 largest dividend growth stock positions based on market value, along with their percentage of my dividend growth portfolio:
ConocoPhillips Co. (COP)
Yield: 3.7% | % of DG Portfolio: 4.4%
ConocoPhillips Co. was formed via the 2002 merger of Phillips Petroleum and Conoco, is the fourth largest integrated oil company in the world.
Procter & Gamble (PG)
Yield: 3.3% | % of DG Portfolio: 4.4%
The Procter & Gamble Company is a leading consumer products company the markets household and personal care products in more than 180 countries.
Genuine Parts Company (GPC)
Yield: 3.1% | % of DG Portfolio: 4.7%
Genuine Parts Co is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.
Abbott Laboratories (ABT)
Yield: 3.7% | % of DG Portfolio: 5.1%
Abbott Laboratories is a diversified life science company that is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics. In mid-October 2011, Abbott announced plans to split the company.
McDonald's Corporation (MCD)
Yield: 2.7% | % of DG Portfolio: 6.2%
McDonald's Corporation is the largest fast-food restaurant company in the world, with about 32,900 restaurants in 117 countries.
Capital appreciation has played a significant part in the above stocks weighting. Since I have owned them, the stocks have generated the following annualized returns: COP 24.57%, PG 6.93%, GPC 36.11%, ABT 11.24%, MCD 26.42%.
As you can see both MCD and ABT are slightly above my 5% maximum allocation. From a risk standpoint, it is important to define a maximum percentage holding. This helps define boundaries when emotion (greed or fear) is knocking on the door.
Full Disclosure: Long MCD, ABT, PG, COP, GPC See a list of all my dividend growth holdings here.
- Top 10 Articles For 2010
- Dividend Stocks vs. a Safe Distribution Rate
- Best Stocks for 2011
- The 2011 Dividend Aristocrats
- 13 Dividend Stocks With A Good Yield/Growth Mix
Popular Posts - Last 7 days
Presented below are my dividend stock and ETF/CEF holdings. This is not a recommendation to buy these securities. I have classified some of...
Monday, October 31, 2011 will mark my fourth full year of writing as Dividends4Life . It is hard to believe another year has passed. Like th...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
There are income investors and Dividend Growth investors. While the distinction is rather simple, it slips past many casual observers. Inco...
Dividends are not paid with sales, earnings, EPS, EBIT or EBITDA. Instead dividends are paid with cash. As an investor, you want to pay clos...
D4L-Premium Services is designed to provide the busy dividend growth investor with a wealth of relevant information. Each week the D4L-Prem...
Have you ever noticed those that most vehemently attack a buy-and-hold strategy really don’t understand how the strategy works? They confus...
Linked here is a detailed quantitative analysis of Illinois Tool Works Inc. (ITW). Below are some highlights from the above linked analysis...
Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you don...
There is perceived safety in size . Giant corporations aren't randomly grown. Instead, they are carefully built through superior manag...