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One More Home Run!

Almost two years ago, I wrote about the San Francisco Giants beating the Kansas City Royals in game 7 of the World Series, the annual championship series of Major League Baseball in North America. Of the 57 runs scored in that series, only two were home runs.

I don’t think we’ll see only two home runs between the Chicago Cubs and the Cleveland Indians this year! In Game 1 of the 2016 World Series, catcher Roberto Perez hit two home runs to back up a shut-out performance by starting pitcher Corey Kluber and reliever Andrew Miller. The Indians won 6-0.

 Asif Islam /

Asif Islam /

In case you’re wondering what baseball has got to do with dividend growth investing, I use the term home run to describe any position in my portfolio that has crossed the 100% mark in total returns.

Today, I’m happy to announce that I’ve scored another home run with DivGro! While my goal with DivGro is to build a growing dividend income stream, it is fun to see some stocks perform well enough to become home run stocks!

In my days as a trader, I often sold half of my shares when a position became a home run position. I justified the action by saying that now I’m playing with “house” money. I no longer think that way. In fact, I’m more than happy to hang on to home runs and to continue collecting the growing dividends.

Here is a list of my previous home run stocks, some of which I’ve sold with the goal of preparing DivGro for covered call options trading:

– Home run #1: General Dynamics Corporation (NYSE:GD) – up 139% (38% annualized)

– Home run #2: Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) – closed for 125% gain (37% annualized)

– Home run #3: Digital Realty Trust, Inc. (NYSE:DLR) – closed for 102% gain (44% annualized)

– Home run #4: Altria Group Inc (NYSE:MO) – up 99% (33% annualized)

– Home run #5: Reynolds American, Inc. (NYSE:RAI) – up 102% (43% annualized)

– Home run #6: Main Street Capital Corporation (NYSE:MAIN) – up 101% (28% annualized)

Once a position reaches home run status, I don’t cancel the status when the share price drops and total return falls below 100%. So MO retains home run status despite being up “only” 99% at this time.

Home Run #7

My 7th home run stock is Microsoft Corporation (NASDAQ:MSFT). I bought 80 shares at $31.76 per share in August 2013, with a starting yield on cost (YoC) of 2.9%. Microsoft Corporation (NASDAQ:MSFT) now trades above $60 and after several dividend increases, my YoC is 4.9%. Payback is 12.7%, meaning I’ve received 12.7% of my original investment back in the form of dividends.

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