The article discusses the importance of a DGI (Dividend Growth Investing) portfolio for income investors and retirees, particularly in a stagflationary environment. Stagflation is characterized by above-average inflation and below-average growth in the economy. The author explains that stagflation can be caused by factors such as deficit spending, inefficient capital allocation, tariffs, geopolitical tensions, and investments in artificial intelligence [509519aa].
The author emphasizes the need for generating attractive and stable income in a stagflationary environment. To address this, the article presents a 15-stock dividend growth retirement portfolio that is well-positioned for such an economic scenario. The portfolio includes stocks from various sectors, including infrastructure, energy, REIT, precious metals, telecommunications, and consumer products. By diversifying across these sectors, the portfolio aims to mitigate the impact of stagflation on the overall performance [509519aa].
The process of structuring a DGI portfolio remains the same, involving shortlisting stocks based on dividend yield, dividend growth, payout ratio, and credit rating. The author presents a 15-stock DGI portfolio that requires little maintenance over time. The portfolio includes companies like Verizon, JPMorgan Chase, Mastercard, Johnson & Johnson, UnitedHealth, Brown & Brown, Amcor PLC, Realty Income, Home Depot, Apple Inc., and NextEra Energy. The portfolio has a current dividend yield of 2.96% and a dividend growth rate of 10.7% [be9e17da] [12c19e36].
The article concludes by highlighting the potential for the yield on a cost basis to grow over 5% in five years if all dividends are reinvested. It also acknowledges the risk considerations associated with investing in individual stocks and the potential impact of market fluctuations and geopolitical situations on the portfolio. However, the author believes that a well-constructed DGI portfolio can provide income investors and retirees with long-term growth, income, and lower volatility, even in a stagflationary environment [509519aa].