May 2026 Newsletter

Welcome to the May edition of my DivGro 2.0 newsletter!

Every month, I write a market recap and a summary of my DivGro portfolio as of the last day of the previous month. I also summarize transactions that affected DivGro's projected annual dividend income [PADI].

DivGro contains 53 positions. Of these, 47 are dividend growth [DG] stocks, 2 are dividend-paying stocks, and 4 are closed-end funds.

By convention, I label stocks with a 5-year or longer streak of dividend increases as DG stocks.

Before reviewing changes in my DivGro portfolio, let's recap what happened in the U.S. stock market in April.

April Market Recap

April delivered a powerful reversal of March's selloff, with the Dow up 7.14%, the S&P 500 up 10.42%, and the Nasdaq up 15.29% as Middle East fears eased.

The S&P 500 notched new all-time highs, closing above 7,000 for the first time on 15 April 2026. A monthly gain of more than 10% for the S&P 500 is rare: it's only the 13th occasion in the past 50 years and the first since COVID.

The 10-year Treasury yield rose about 8 bps in April to 4.39% as the FOMC voted to keep rates in the 3.50% to 3.75% range, citing elevated inflation and Middle East uncertainty. The committee split 8-4, the first four-dissent vote since 1992, and markets are now pricing no further changes this year. Even so, the VIX fell from 25.25 to 16.89, unwinding the Q1 risk premium.

In April, most of the GICS sectors advanced, with Communication Services and Information Technology leading the way. The Energy sector fell 3.5% but is still the leading sector year-to-date, with a total return of 33.5% through 30 April 2026. The Health Care and Financials sectors remain in negative territory in 2026.

The March CPI, released in April, rose sharply by 0.9% to a 12-month rate of 3.3%, driven by a 10.9% jump in energy and a 21.2% surge in gasoline. Kiplinger expects another large gas increase that could push the headline inflation rate to near 4%.

The next CPI report is scheduled for release on 12 May 2026.

Portfolio Review

This section reviews my DivGro portfolio as of 30 April 2026.

In April, I opened 1 new position and added shares to 8 existing positions. Additionally, I closed 1 position and reduced my holdings in 8 positions.

Eight DivGro stocks announced dividend increases or paid higher dividends in April, while 1 Closed-End Fund [CEF] reduced its distribution.

The net result of these changes is that DivGro's projected annual dividend income [PADI] increased by about 4.5% in April, but decreased by about 2.5% year over year:

DivGro's PADI of $54,525 means I can expect to receive dividend income averaging $4,544 per month in perpetuity, assuming the status quo is maintained.

Of course, PADI will increase over time because I invest in companies that regularly raise their dividend payouts, and I continue to reinvest all dividend income (and options income).

Dividend Income

In April, I received dividends totaling $4,483 from 16 stocks in my portfolio, a decrease of 12.6% from March's total of $5,126 and an increase of 10.2% year over year from April 2025's total of $4,069.

So far in 2026, I've collected $17,469 in dividends, or about 31.2% of my $56,000 dividend income goal. At the same point in 2025, my dividend income totaled $17,021.

At the current PADI run-rate, I project 2026 dividend income to total $54,015 (flat) or $54,363 when accounting for expected dividend growth.

Over the next 12 months, I project dividend income of $54,525 (flat) or $55,242 when including expected dividend growth.

Since starting my dividend growth investing journey in January 2013, I've collected and reinvested dividends totaling $371,518.

Here is a list of the regular dividends I received in April:

• Automatic Data Processing (ADP): income of $136.00
• Amphenol (APH): income of $50.00
• DICK'S Sporting Goods (DKS): income of $150.00
• Intuit (INTU): income of $66.00
• Lincoln Electric Holdings (LECO): income of $35.55
• Lam Research (LRCX): income of $33.80
• Main Street Capital (MAIN): income of $26.00
• McKesson (MCK): income of $24.60
• Altria (MO): income of $455.80
• Monolithic Power Systems (MPWR): income of $60.00
• NVIDIA (NVDA): income of $0.80
• Taiwan Semiconductor Manufacturing (TSM): income of $61.03

The following funds paid regular distributions in April:

• BlackRock Enhanced Global Dividend Trust (BOE): income of $248.10
• BlackRock ESG Capital Allocation Term Trust (ECAT): income of $1,229.90
• Western Asset Emerging Markets Debt Fund (EMD): income of $285.00
• NXG NextGen Infrastructure Income Fund (NXG): income of $1,620.00

Below is a chart showing DivGro's monthly dividends plotted against projected monthly dividend income [PMDI] over the past ten years:

PMDI at April-end was $4,544, up 4.5% from $4,350 last month and down 2.5% from $4,661 a year ago.

Quarter-ending months tend to be outliers. For this reason, I like to view a rolling 12-month average of dividends received (the orange bars) plotted against a rolling 12-month average of PMDI (the blue, staggered line):

Sometimes the orange bars track above the blue line because I don't include special dividends in my PMDI calculations.

Dividend Changes

Eight DivGro stocks announced dividend increases or paid higher dividends in April.

Dividend Increases

• Monolithic Power Systems (MPWR): increase of 28.21% (PADI +$40.48)
• Costco Wholesale (COST): increase of 13.08% (PADI +$17.00)
• Travelers (TRV): increase of 13.64% (PADI +$18.00)
• Ameriprise Financial (AMP): increase of 6.25% (PADI +$14.40)
• Comfort Systems USA (FIX): increase of 14.29% (PADI +$7.20)
• Alphabet (GOOG): increase of 4.76% (PADI +$2.00)
• PACCAR (PCAR): increase of 6.06% (PADI +$8.00)
• Apple (AAPL): increase of 3.85% (PADI +$3.00)

I like to see dividend increases above 7%. Four of this month's 8 dividend increases topped 7%, and the average dividend increase of 11.27% is significantly higher than the annual inflation rate in the USA of 3.3% (April 2026).

Dividend Decreases

• Taiwan Semiconductor Manufacturing (TSM): decrease of 2.98% (PADI -$7.51)
• BlackRock ESG Capital Allocation Term Trust (ECAT): decrease of 1.34% (PADI -$199.69)

ECAT has adopted a managed distribution plan "to support a level monthly distribution of income, capital gains, and/or return of capital". The ETF distributes a monthly annualized rate of 20% of its 12-month rolling average daily net asset value, calculated five business days before the distribution's declaration date.

I expect ECAT to continue lowering its dividend payout until it reaches to 20%.

The current yield is 22.12% at $14.83 per share.

ECAT writes options to generate additional income, with a focus on investments in technology, financials, and healthcare.

Since opening my ECAT position in December 2024, the CEF has delivered a total return of 17.45%, and I've collected $12,587 in distributions.x

Transactions

In April, I opened 1 new position and added shares to 8 existing positions. Additionally, I closed 1 position and reduced my holdings in 8 positions.

New Positions

• Primerica (PRI): new position of 85 shares (PADI +$408.00)

Closed Positions

• DICK'S Sporting Goods (DKS): sold 120 shares and closed position (PADI -$600.00)

Increased Positions

• BlackRock ESG Capital Allocation Term Trust (ECAT): +1,000 shares → 4,500 shares (PADI +$3,324.11)
• Intuit (INTU): +5 shares → 55 shares (PADI +$24.00)
• Mastercard (MA): +23 shares → 60 shares (PADI +$80.04)
• NVIDIA (NVDA): +75 shares → 175 shares (PADI +$3.00)
• QUALCOMM (QCOM): +9 shares → 120 shares (PADI +$32.04)
• UnitedHealth (UNH): +19 shares → 74 shares (PADI +$167.96)
• Cintas (CTAS): +30 shares → 150 shares (PADI +$54.00)
• Automatic Data Processing (ADP): +20 shares → 100 shares (PADI +$136.00)

Reduced Positions

• Applied Materials (AMAT): -15 shares → 45 shares (PADI -$31.80)
• Eaton plc (ETN): -20 shares → 40 shares (PADI -$88.00)
• Home Depot (HD): -20 shares → 30 shares (PADI -$186.40)
• Hubbell (HUBB): -4 shares → 36 shares (PADI -$22.72)
• Lam Research (LRCX): -5 shares → 125 shares (PADI -$5.20)
• McKesson (MCK): -2 shares → 23 shares (PADI -$6.56)
• Monolithic Power Systems (MPWR): -7 shares → 23 shares (PADI -$43.68)
• Chevron (CVX): -115 shares → 100 shares (PADI -$818.80)

Portfolio Statistics

Given DivGro's total portfolio value and the total capital invested, the portfolio has returned about 762% since inception.

DivGro's internal rate of return [IRR] is 14.70%. The IRR considers the timing and size of deposits and withdrawals since inception and provides a more accurate measure of portfolio performance.

I track the yield on cost (YoC) for individual stocks and the average YoC for my portfolio. DivGro's average YoC increased from 5.97% last month to 6.13% this month.

Another interesting statistic is the percentage payback, which relates dividend income to the amount of capital invested. DivGro's average percentage payback is 42.6%, down from 42.9% last month.

Projected annual yield is calculated by dividing PADI ($54,525) by the total amount invested. DivGro's projected annual yield is 25.79%, up from 24.69% last month.

Since founding DivGro in January 2013, my portfolio has generated $379,267 in dividend income. Additionally, I've added options income totaling $246,413 after initiating an options trading strategy in June 2016. That totals $625,680 in income over 160 months (13 years and 4 months) of investing.

Here is a chart showing DivGro's market value breakdown over the past decade. Dividends are plotted at the base of the chart so we can see them grow over time:

Looking Ahead

Expected Dividend Payments

Below are the expected dividend payments for DivGro in May 2026. Declared payments are shown as-is, while amounts prefixed with ~ are forecasts based on the most recent declared rate.

Likely Dividend Increase Announcements

Based on prior cadence, the following holdings typically announce dividend increases in May. Last year's percentages are rough baselines, not predictions.

Portfolio Anniversaries

Holdings reaching notable milestones in May 2026:

• Apple (AAPL): 10 years in May 2026 (first bought 12 May 2016)

Future Editions

My monthly newsletters will be published on or shortly after the Monday after the first full weekend of every month:

• June 2026 Newsletter: Monday, 8 June 2026
• July 2026 Newsletter: Monday, 6 July 2026
• August 2026 Newsletter: Monday, 3 August 2026