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Is This the Start of Something Big? – Texas Instruments Incorporated (TXN) and More

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Texas Instruments logoLast week, the Inflation-Protected Income Growth portfolio received its first dividend payment, $9.87 worth of dividends on 47 shares of Texas Instruments Incorporated (NASDAQ:TXN) stock. As that real-money portfolio has been designed around owning companies that pay dividends and have decent track records of raising them, this could be the start of something big.

Why all the fuss about $10?
Granted, one dividend payment on one stock is nothing to write home about, but that dividend payment of $0.21 per share represented the second payment at that level from Texas Instruments. Prior to its most recent increase, its dividend was $0.17 per share per quarter. If Texas Instruments holds true to form, after two more dividend payments, we could see another increase.

Or in other words, when that one stock is part of a diversified portfolio where the common thread across all the picks is their dividend history and dividend growth potential, it’s the first real-cash indication of how the strategy works. Indeed, looking at the stocks currently in the portfolio, there’s already reason to believe that the 2013 income will be higher than what it would have been had the portfolio owned the stocks in 2012:

Company Shares 2012 Dividends Per Share Anticipated 2013 Dividends Per share “Would Have Been” 2012 Dividend Income Anticipated 2013 Dividend Income
United Technologies Corporation (NYSE:UTX) 18 $2.03 $2.14 $36.54 $38.52
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)* 38 $0.83 $0.95 $31.43 $36.15
The J.M. Smucker Company (NYSE:SJM) 17 $2.00 $2.08 $34.00 $35.36
Genuine Parts Company (NYSE:GPC) 23 $1.98 $2.15 $45.54 $49.45
Mine Safety Appliances (NYSE:MSA) 36 $1.10 $1.12 $39.60 $40.32
Microsoft Corporation (NASDAQ:MSFT) 55 $0.83 $0.92 $45.65 $50.60
Hasbro, Inc.(NASDAQ:HAS)** 43 $1.74 $1.20 $74.82 $51.60
NV Energy, Inc. (NYSE:NVE) 84 $0.64 $0.68 $53.76 $57.12
United Parcel Service, Inc. (NYSE:UPS) 20 $2.28 $2.48 $45.60 $49.60
Walgreen Company (NYSE:WAG) 40 $1.00 $1.10 $40.00 $44.00
Texas Instruments Incorporated (NASDAQ:TXN) 47 $0.72 $0.84 $33.84 $39.48
Union Pacific Corporation (NYSE:UNP) 6 $2.49 $2.76 $14.94 $16.56
CSX Corporation (NYSE:CSX) 34 $0.54 $0.56 $18.36 $19.04
McDonald’s Corporation (NYSE:MCD) 16 $2.87 $3.08 $45.92 $49.28
Becton, Dickinson and Co. (NYSE:BDX) 18 $1.85 $1.98 $33.21 $35.64
AFLAC Incorporated (NYSE:AFL) 27 $1.34 $1.40 $36.18 $37.80
Air Products & Chemicals, Inc. (NYSE:APD) 17 $2.56 $2.56 $43.52 $43.52
*Assumes 20% Israeli Withholding Tax
**Feb 2013 dividend pulled to 2012

Source: Yahoo! Finance, the iPIG Portfolio’s brokerage account, as of Feb. 19, 2013.

The year is really just getting under way, and only a small handful of the companies in the portfolio have reached the anniversary of their last dividend increases. Still, the iPIG portfolio is already projecting a higher 2013 dividend total than it would have gotten had it held all these stocks in 2012. And the portfolio is doing that in spite of the fact that Hasbro, Inc. pulled its February 2013 dividend into December 2012 to ward off the higher dividend taxes that were expected for this year.

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