I'm Thankful That Not Much Happened

Like the broader market, the real-money Inflation-Protected Income Growth portfolio just finished up a lackluster week. Overall, the portfolio gained $10.44 in market value since last week's update, a mere 0.03% rise.

I'm very thankful for that go-nowhere week. After all, when volume is down due to holiday-shortened trading sessions, there's always a risk for increased volatility, frothiness, and other forms of wildness. A fairly smooth week where the portfolio barely budged and no individual constituent moved more than a couple of percentage points provided a nice break and the opportunity to look forward toward things to come.

The cash still keeps coming
This upcoming week will be a very strong one for this dividend-focused portfolio. It starts with a bang on Monday, with dividend payments from Aflac (NYSE: AFL  ) , J.M. Smucker (NYSE: SJM  ) , and Wells Fargo (NYSE: WFC  ) . On Tuesday, Teva Pharmaceutical (NYSE: TEVA  ) joins the party of dividend payers, and UPS (NYSE: UPS  ) is scheduled to deliver its payment on Wednesday.

Aflac's Monday payment hands $0.37 per share to its owners, including the IPIG portfolio. That dividend is a $0.02 -- or 5.7% -- increase over the supplemental insurance giant's previous dividend. That increase adds Aflac to the list of companies in the IPIG portfolio that kept their trend of increasing dividends alive in 2013.

J.M. Smucker's dividend on Monday awards its owners $0.58 per each share, and the IPIG portfolio is privileged to be among that list of owners. The jam and jelly maker is paying its second quarterly dividend at that level, which means it, too, increased its dividend in 2013. While Smucker's stock is approaching a level where it might get sold based on valuation, as long as its dividend keeps coming, I don't see a compelling need to part ways with its shares quite yet.

As Wells Fargo pays its $0.30-per-share dividend to its owners on Monday, the IPIG portfolio will happily pick up its portion of that payment. That megabank was one of the first to resume reasonable dividend payment after the financial meltdown, and it increased its payment earlier in 2013 as well. Wells Fargo was able to increase its dividend more quickly than most other major banks after the meltdown because it remained well capitalized, a huge plus to investors as well as depositors.

Teva Pharmaceutical's dividend on Tuesday will hand around $0.32 per ADR to its American owners, with the actual payment determined in part by the Isreali shekel/U.S. dollar exchange rate. As Teva is an Israeli company, foreign exchange fluctuations are part of owning the company's stock. The other part is the 15% withholding tax that reduces the cash that American investors will actually receive. Teva last increased its dividend in February, which means it's due for a review next February.

Not to be left out, shipping giant UPS will be delivering its $0.62 per share dividend on Wednesday, the company's fourth consecutive payment at that level. Like Teva, UPS last increased its dividend in February, and next quarter it will be one to watch for another potential raise. Thanks to solid earnings numbers, UPS recently earned a reprieve from being sold from the IPIG portfolio based on valuation. This quarter will be key to whether that reprieve continues.

Keep on going -- and growing
That's five companies -- and five stories of dividend growth within the past year. That shouldn't come as a surprise, as all five companies -- and the other 16 members of the IPIG portfolio -- were selected based on their proven track records of paying and increasing their dividends. Through up markets, down markets, and "go nowhere" markets, the beauty of a dividend is that it gets paid based on the company's ability to generate cash, not based on the market's sentiment

Put together a collection of companies with solid dividend histories and the potential to continue increasing their dividends, and you can create a portfolio with the chance to increase its overall dividend payment levels every year. The IPIG portfolio aims to do just that, and the following table shows a snapshot of that portfolio as of this past Friday's close.

Company Name

Purchase Date

Total Investment (Including Commissions)

Current Value
Nov. 29, 2013

Current Yield
Nov. 29, 2013

United Technologies

Dec. 10, 2012

$1,464.82

$1,995.48

2.13%

Teva Pharmaceutical

Dec. 12, 2012

$1,519.40

$1,548.88

3.13%

J.M. Smucker

Dec. 13, 2012

$1,483.45

$1,772.08

2.23%

Genuine Parts

Dec. 21, 2012

$1,476.47

$1,905.32

2.60%

Mine Safety Appliances

Dec. 21, 2012

$1,504.96

$1,793.52

2.41%

Microsoft

Dec. 26, 2012

$1,499.15

$2,097.15

2.94%

Hasbro

Dec. 28, 2012

$1,520.60

$2,314.26

2.97%

NV Energy

Dec. 31, 2012

$1,504.72

$1,986.60

3.21%

UPS

Jan. 2, 2013

$1,524.00

$2,047.60

2.42%

Walgreen

Jan. 4, 2013

$1,501.80

$2,368.00

2.13%

Texas Instruments

Jan. 7, 2013

$1,515.70

$2,021.00

2.79%

Union Pacific

Jan. 22, 2013

$805.42

$972.24

1.95%

CSX

Jan. 22, 2013

$712.50

$927.18

2.20%

McDonald's

Jan. 24, 2013

$1,499.64

$1,557.92

3.33%

Becton, Dickinson

Jan. 31, 2013

$1,518.64

$1,954.62

2.01%

Aflac

Feb. 5, 2013

$1,466.35

$1,791.99

2.23%

Air Products & Chemicals

Feb. 11, 2013

$1,510.99

$1,850.11

2.61%

Raytheon

Feb. 22, 2013

$1,473.91

$2,394.36

2.48%

Emerson Electric

April 3, 2013

$1,548.12

$1,875.72

2.57%

Wells Fargo

May 30, 2013

$1,525.48

$1,628.74

2.73%

Kinder Morgan

June 21, 2013

$1,518.37

$1,492.68

4.61%

Cash

   

$590.29

 

Total Portfolio

   

$38,885.74

 

Data from the iPIG portfolio brokerage account, as of Nov. 29, 2013.

The advantage of dividend stocks over bonds
As the IPIG portfolio has shown with its total return over the past year, dividend stocks can provide both income and a potential for price appreciation. Additionally, while dividend payers don't garner the notability of highflying growth stocks, they're also less likely to crash and burn. Over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine.

With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list of nine in this free report. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

To follow the IPIG portfolio as buy and sell decisions are made, watch Chuck'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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