As mentioned in my 6th anniversary episode, I’ve been working on building a dividend index to track dividend-paying stocks in much the same way that I track and analyze REITs. Here is the first iteration of that project: the MB Dividend Index. As for the stocks that make up the index, I’ve included all of the 20 stocks from the PSE’s DivY Index, plus all of the other REITs, and a handful of other interesting dividend plays. There’s no particular criteria for inclusion or exclusion from this list, only the vague notion that (1) tracking all of this data is not purely automatic and the bigger the list, the harder it is for me to maintain, and (2) including all of the stocks that pay dividends in a daily chart would look outrageous because there are just too many.
> What am I tracking? Dividends! It’s not as straightforward as you’d imagine. Some pay quarterly. Some pay every half-year. Some annually. Some less than annually. Some pay special dividends. This complexity is what encouraged me to stick with REITs (and select stocks like OGP) because they pay regular quarterly dividends by custom. But I’ve built a system that will track and analyze all of the dividends that are paid for these stocks, under the theory that so long as I have the historical data, I should be able to provide whatever stats might be wanted by MB’s readership.
> The initial look: To start out with, I’m going to show the ticker, the current price, how that price changed since the previous day, the annualized yield, and the change in the annualized yield based on the shift in the stock price. I figured that’s a good place to start. It’s going to begin life as an unsorted list (in static order), but I hope to begin rank sorting by annualized yield in the near future.
> What’s annualized yield? Great question. This is my preferred metric for evaluating REITs. Instead of measuring the actual dividends declared over the last year (TTM yield), it takes the most recent dividend and multiplies that by the number of dividends normally declared in one year to estimate what that stock’s yield could be–at its current price–if the dividend rate were maintained. It’s not perfect. Things can change. It does have a sort of recency bias where it emphasizes (or over-emphasizes) the most recent thing that happened while completely ignoring all that has come before. But that’s where analysis should pick up the slack to contextualize the data.
> What about TTM yield? It’s a useful metric (all dividends declared in the trailing 12 months), but while I have a system to capture and sort new dividends, I haven’t had the time to backfill dividends to calculate things like TTM yield. But that’s something that I hope to add in the background at some point in the near future, too.
> What else? I’m a relatively new dividend investor. I have largely stuck to REITs and OGP after cutting my teeth on SCC, so I know that I’m still learning and that there are many dividend veterans out there who might want to see different stats or information tracked. If you are one of these vets, I’d love to hear from you about this initial attempt at the MB Dividend Index, and get your feedback on how it could be improved and expanded. I’m open to new metrics, new data, and new stocks to cover. Just let me know!
MB BOTTOM-LINE: It’s no accident that my interest has gravitated toward dividend-paying stocks while the PSEi has fallen back into the mid-6000s and COL Financial is telling us to “sell the rallies”, and based on the response that I got to the AAA Robo “Passive Income Portfolio” interview [link], there are hundreds/thousands of MB readers joining me in my somewhat defensive stance. I don’t know if it’s appropriate that your entire portfolio is dividend-paying stocks, so please don’t interpret the creation of the MB Dividend Index as a sign that I’m “all-in” on dividends as the only path forward, because (obviously) there’s still the classic ways of making money, like, you know, insider trading! (Don’t take that joke as a statement that condones or supports insider trading; it’s just the realistic acknowledgement of its prevalence and the outrageously lax enforcement of the rules that prohibit it.) To wrap up, I hope you will be kind in giving my new baby a chance to grow into its face a bit over the next couple of weeks, but if you spot any errors, or you have any suggestions, I would really love to hear from you because my goal here is to make something that you all can use to make better decisions in your investing journeys! Salamat!
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