The Dividends Just Keep Coming

The real-money Inflation-Protected Income Growth portfolio rose in value by a bit more than $245 since last week's update to end the week at $34,593.13. In spite of an ugly middle to the week, the market rose a bit as well over that same period, providing the framework for much of that increase.

The rest of the increase came from the IPIG portfolio's primary strategy -- collecting dividends. Three different companies held by the IPIG portfolio paid their owners cash last week, adding to the portfolio's cash balance. While the cash was nice, perhaps the best part was the reminder that the dividends would have been paid no matter what the market did, because they're based on the companies' operations, not market price swings.

Who showed us the money?
On Monday, supplemental insurance giant AFLAC (NYSE: AFL  ) paid $9.45 in dividends to the IPIG portfolio. This was the company's third consecutive dividend at $0.35 per share. If it follows its previous trends, we can expect another payment at that level before it gets reviewed for potential increase.

Also on Monday, peanut butter and jelly purveyor J.M. Smucker (NYSE: SJM  ) handed the IPIG portfolio $8.84, enough to buy a reasonably priced lunch. Importantly, that was the company's fourth consecutive quarter paying out $0.52 per share in dividends. While nothing has been announced for this year, the company's last increase came in July 2012, and we'll be eagerly watching next month to see whether the company keeps its trend of annual increases alive.

Then on Tuesday, generic-pharmaceutical titan Teva Pharmaceutical (NYSE: TEVA  ) handed the IPIG portfolio $11.99, with the Israeli government taking $1.80 of that amount as a tax withholding. Favorable currency fluctuations meant that the IPIG portfolio picked up slightly more from this dividend than before, though the company's base dividend rate remained 1.15 Israeli shekels per share. As this marks the company's second payment at that level, we anticipate two more consistent payments before a potential increase.

Next up? Even more cash
This week, the IPIG portfolio expects the dividends to keep rolling in. On Monday, safety-equipment provider Mine Safety Appliances (NYSE: MSA  ) is expected to pay $0.30 per share to the portfolio for the 36 shares it owns. That's a decent increase from the $0.28 per share the company had been paying in previous quarters.

Similarly, on Friday railroad tycoon CSX (NYSE: CSX  ) is expected to hand the IPIG portfolio $0.15 per share in cash for the 24 shares it owns. That's a decent raise from the $0.14 per share it had paid in previous quarters.

On top of those raises, regular, consistent dividends are expected from a few other IPIG picks this upcoming week. The fact that those dividends will get paid no matter what the market does serves as a great reminder that dividends get paid based on the performance of the company, rather than its stock.

That consistency and operational focus provide a huge part of what makes the IPIG strategy one with the potential to stand the test of time.

IPIG portfolio snapshot as of June 7, 2013

Company Name

Purchase Date

No. of Shares

Total Investment (Including Commissions)

Current Value

United Technologies

12/10/12

18

$1,464.82

$1,701.00

Teva Pharmaceutical

12/12/12

38

$1,519.40

$1,500.62

J.M. Smucker

12/13/12

17

$1,483.45

$1,723.63

Genuine Parts

12/21/12

23

$1,476.47

$1,781.81

Mine Safety Appliances

12/21/12

36

$1,504.96

$1,662.48

Microsoft

12/26/12

55

$1,499.15

$1,961.85

Hasbro

12/28/12

43

$1,520.60

$1,935.00

NV Energy

12/31/12

84

$1,504.72

$1,982.40

United Parcel Service

1/2/13

20

$1,524.00

$1,727.40

Walgreen

1/4/13

40

$1,501.80

$1,976.80

Texas Instruments

1/7/13

47

$1,515.70

$1,700.46

Union Pacific

1/22/13

6

$805.42

$948.78

CSX

1/22/13

34

$712.50

$850.68

McDonald's

1/24/13

16

$1,499.64

$1,572.48

Becton, Dickinson

1/31/13

18

$1,518.64

$1,776.42

AFLAC

2/5/13

27

$1,466.35

$1,539.81

Air Products & Chemicals

2/11/13

17

$1,510.99

$1,616.53

Raytheon

2/22/13

27

$1,473.91

$1,820.07

Emerson Electric

4/3/13

28

$1,548.12

$1,613.64

Wells Fargo

5/30/13

37

$1,525.48

$1,526.25

Cash

     

$1,675.02

Total Portfolio

 

 

 

$34,593.13

Data from the IPIG portfolio brokerage account, as of 6/7/13.

To follow the IPIG portfolio as buy and sell decisions are made, watch portfolio manager Chuck Saletta's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the IPIG portfolio, simply click here.


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