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Can A Dividend Growth Portfolio Beat Index Funds?

Published Mon, 15 Oct 2018 15:29:43 -0400 on Seeking Alpha

If Dividend Growth Investing can beat Index investing, where is the portfolio that shows this? In the various debates about whether or not Dividend Growth Investing is a viable strategy and how it stacks up to Index Investing, one question is often raised by proponents of Index Investing. And that question is, where are all the DG portfolios that beat Index Investing?
While the answer is complex, it is a fair question. I know with my own portfolio ( here is the latest update) is not currently beating the indexes I have compared it to. Part of that is due to the short time frame it has been in existence. Part of that is due to my directing cash flows into sectors and stocks where prices were falling while the indexes are doing the opposite. I bought all good companies and by purchasing them when prices were low I was able to grow dividend income faster. I fully expect this to pay off down the road. But I don’t expect my portfolio to beat the comparison indexes each year in total return. While I don't worry about it very much, I do expect that over the long term dividend growth will result in price growth too.
Understand as well that actual investors who use index funds under-perform their indexes. That may sound counter-intuitive. But actual investors tend to buy more shares of funds that are going up and sell shares of funds that are going down in price. This can and often does lead to investors buying high and selling low. So it’s not just investors who buy... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
AT&T 30.77   10.7 2.87 2.04 6.57
DOMINION RESOURCES 75.94   20.4 3.73 3.67 4.86
IBM 139.18   14.6 9.51 6.28 4.50
EXXON MOBIL 79.92   16.4 4.88 3.28 4.08
REALTY INCOME 73.25   58.1 1.26 2.71 3.73
WELLS FARGO 48.08   10.8 4.44 1.80 3.73
COCA-COLA 46.03   30.7 1.50 1.60 3.48
LOCKHEED MARTIN 294.12   16.7 17.60 8.80 2.99
JM SMUCKER 115.93   20.9 5.54 3.40 2.97
WISCONSIN ENERGY 79.54   23.7 3.35 2.36 2.97
PROCTER & GAMBLE 101.96   24.8 4.11 2.87 2.82
3M 203.21   22.8 8.90 5.76 2.81
JOHNSON & JOHNSON 136.61   24.4 5.61 3.60 2.63
COLGATE PALMOLIVE 66.26   24.1 2.75 1.72 2.55
SPDR S&P DIVIDEND ETF 97.40   0.0 0.00 2.42 2.49
MCDONALDS 185.72   24.6 7.54 4.64 2.48
CLOROX 158.15   26.1 6.05 3.84 2.43
WAL-MART STORES 98.17   43.1 2.28 2.12 2.16
SPDR S&P 500 ETF 279.04   0.0 0.00 5.24 1.88
MICROSOFT 117.66   27.3 4.31 1.84 1.57
POWERSHARES QQQ TRUST SERIES 1 178.22   0.0 0.00 1.45 0.81
GENERAL ELECTRIC 9.88   0.0 -2.62 0.04 0.40
ISHARES BARCLAYS AGGREGATE BOND FUND  

AT&T - T
AT&T - T  


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