With three quarters of the year now in the books, it is time, once again, to take a look at baby DivHut’s dividend income progress in 2016. I like to do these baby DivHut updates three or four times a year as not much changes in his portfolio on a month to month basis. I can honestly say that I feel very proud to be able to start a dividend growth portfolio from birth for my son. The real effects of compounding will be very noticeable in an account that was started so early in life. For now baby DivHut’s portfolio is still relatively small in terms of individual holdings with just eight different dividend paying stocks currently. Of course, the number of individual holdings will grow over the years as we add fresh capital to his account and the inevitable stock spin off that will occur as well. To tell you the truth I was looking forward to seeing his portfolio diversify with the proposed Emerson Electric Co. (EMR) spin off of its network power business, Vertiv. Instead that deal was scrubbed in favor of a direct sale to private equity firm Platinum Equity for the price of $4 billion. Still, his portfolio should diversify with the proposed Yum Brands (YUM) spin off of Yum China later this year. With that being said, let’s take a look at baby DivHut’s current holdings, sector allocation and dividend income for the first nine months of the year.
|Symbol||Description||Quantity||Cost Basis||Market Value||Cost/Share||Gain or Loss|
|EMR||EMERSON ELEC CO COM||37.0715||$1,926.05||$1,919.19||$51.96||-$6.86
|ITW||ILLINOIS TOOL WKS INC||6.2139||$519.42||$723.36||$83.59||+$203.94
|JNJ||JOHNSON & JOHNSON||8.3051||$831.32||$994.95||$100.10||+$163.63
|UL||UNILEVER PLC - ADR||13.1015||$519.63||$606.73||$39.66||+$87.10
|VFC||V F CORP||25.2242||$1,629.80||$1,388.34||$64.61||(-$241.46)
|YUM||YUM! BRANDS INC||14.3245||$1,077.00||$1,251.82||$75.19||+$174.82
Total Investment Balance $8,604.49
Gain or Loss $764.41
Dividend income from baby DivHut’s account totaled $37.85 in September with a year to date grand total of $164.66.
|Sector||Sector %||Market Value|
Going forward I’d love to add some additional consumer staples and health care stocks to his portfolio but valuations for many names I like are still a little pricey. If I had to invest today, I’d look to add to his V.F. Corporation (VFC) as that name has dropped quite a bit from its highs earlier this year and values and yields are starting to look very compelling. Choosing a new stock for his portfolio today I’d probably initiate a position in Cardinal Health, Inc. (CAH). Unless something dramatic happens in the market I’ll most likely just sit tight with his portfolio holdings till the end of this year and continue to reinvest dividends automatically as they come in.
What do you think about baby DivHut’s portfolio and sector allocations? Please let me know below.
Disclosure: Long all above