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Sustainable Global Dividend Growth Pie

The Dividend Experiment

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A little while ago I posted a poll on the YouTube community page asking you guys what kind of pie or portfolio you wanted to see next.

These will be individual stocks so I will be using Trading212 to create them and for ETF based pies in future, I will be using InvestEngine as it seems like it is slightly better for that (predicting income and cheaper platform for DIY ETF portfolios).


Here are the results:

Screenshot 2021-08-30 040324.jpg

To be honest these results were all fairly close and I think it might be fun to make all of them anyway so I am going to make each of these pies but will do it in order of popularity so we will start with the Sustainable Global dividend growth Pie (this one).


Criteria​

  • Looking to get about 15-25 companies in total
  • Because this is dividend growth we want an initial total pie yield that is higher than 2%
  • And because this is dividend growth we want an average dividend growth rate of about 10%
  • We will be mostly considering picks based on the rules of the dividend experiment but because it’s a pie that will be dollar cost (or pound cost) averaged into we can ignore the value ones to a certain degree, and we will also ignore the yield rules because it’s for dividend growth
  • Its sustainable so we also want to see that it has a good dividend history, at least 5 years would be great
  • Because we will do a UK specific pie on the same topic later I will ignore UK listed companies for this pie so will be focused mostly on the US
  • It will consider companies available anywhere but to keep it simple I will only buy the US-listed ADRs so there isn’t all sorts of currency problems or different market opening times and just keeps it easier to track.
  • I was considering doing market cap-weighted allocation but ultimately there’s not much benefit at this size and to keep it really simple will just do equal weightings unless something causes that to change.

The Final Result​

Ok so here we have the finished product, if you want a copy of this pie I think you can follow the link in the description below or alternatively search me up on trading212 social section and it should be there.

The pie itself at the time of making this video has a total aggregate yield of 2.4%

241761405_649001336066414_6279176237323754761_n.jpg



I went ahead and backtested this portfolio (portfolio 2 in red) against the S&P over a 35 year period (portfolio 1 blue) and it has come across as a superior return over that previous time period. Important to remember that past results are not indicative of future returns, however!

Also with such a nice overall growth rate for the dividend, the yield on cost will be in the double digits over a typical 20-year timespan so that’s some nice income if you start investing now and hold (assuming the companies all follow a similar payout trajectory in future of course!)

GLobal sustainable.jpg

Components:​


$TSM - Taiwan Semiconductor Manufacturing
$JPM - JP Morgan & Chase Co
$MSFT - Microsoft
$HD - Home Depot
$VZ - Verizon communications
$AVGO - Broadcom Inc
$BMY - Bristol Myers Squibb
$PEP - Pepsico Inc
$INTC - Intel Corporation
$C - Citigroup Inc
$RTX - Raytheon Technologies Corp
$MMM - 3M Company
$CL - Colgate Palmolive
$WM - Waste Management Inc
$IP - International Paper Co
$AWR - American States Water
$ATVI - Activision Blizzard Inc

Summary​

So that’s the full list of components, as you can see we have a wide range of current yields dividend growth rates and sectors all together in this one pie.

Now, remember that this pie is designed for dividend growth and also that you can add your own (or remove any that you don’t like!) from this pie at your own discretion. If you want to use the same spreadsheet I used to make this then I will link to the free download made by Ben from Smart Finance.

You can fill in your portfolio information and it will even tell you when you will get paid dividends and your equivalent dividend hourly wage!

If you want to get updates on this pie or any of the pies or portfolios that I have made then join my email list where I will send out updates, news, special offers and anything else that comes up that I think might be important for you to know!


The Pie​

https://www.trading212.com/pies/l71f6ICDZO20P2MeleFgKwRHfMVa

Get the pie

 
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