October 2026 Newsletter

Welcome to the October edition of my DivGro 2.0 newsletter!

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

DivGro contains 57 positions. Of these, 49 are dividend growth [DG] stocks, 2 are dividend-paying stocks, 5 are funds, and 1 is a growth stock.

By convention, I label stocks with dividend increase streaks of five or more years as DG stocks.

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

September Market Recap

September was a split-screen tape for dividend-growth investors, with mega-cap tech masking a broad correction underneath. The Nasdaq gained about 1.9%, the S&P 500 slipped fractionally, and the Dow fell more than 4%, a divergence Goodman Financial tied to IT weightings. Beneath the surface, 83% of S&P 500 members trade more than 10% below their 52-week highs, while only five stocks drove 93% of returns since late July. The median stock fell 5.76%. Drivers included a global bond selloff and the Iran-linked energy shock.

The 10-year Treasury rose about 53 basis points to 5.293% amid a sustained bond market selloff. On September 16, the FOMC voted unanimously to hike the federal funds rate by 25 bps to 3.75%-4.00%. The VIX closed at 16.34, understating stress visible in bond volume, which stayed above April highs.

Source: FRED

GICS dispersion was unusually wide: only two of the eleven sectors rose, with Technology up 4.5% and Communications up 4.3%. In contrast, the bond-proxy sectors (Utilities -5.9%, REITs -6.1%, Consumer Staples -3.3%) repriced against 5%-plus Treasuries. Financials led the decliners at -7.2%, followed by Materials at -6.7%. Year to date, Energy is up 40.3%, and Technology is up 28.4%, while Consumer Discretionary leads the decliners with -8.7%.

Source: Nasdaq

The August CPI, released September 11 at 8:30 AM ET, rose 3.4% year over year. The next print is scheduled for Wednesday, October 14, 2026, with the Cleveland Fed nowcast pointing to a headline rate of 3.6%.

Source: Trading Economics

Portfolio Review

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

In September, I added shares to one existing position and reduced my holdings in one position. Both these trades followed from options assignments.

Two DivGro stocks announced dividend increases or paid higher dividends in September, while one Closed-End Fund [CEF] reduced its distribution.

The net result of these changes is that DivGro's projected annual dividend income [PADI] decreased by 0.7% in September, but increased by about 5.6% year over year:

DivGro's PADI of $56,808 means I can expect to receive dividend income averaging $4,734 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 September, I received $5,298 in dividends from 32 stocks in my portfolio, up 16.4% from August's $4,552 and down 11.4% year over year from September 2025's total of $5,983.

So far in 2026, I've collected $41,253 in dividends, or about 73.7% of my 2026 dividend income goal of $56,000. At the same point in 2025, my dividend income totaled $40,266.

At the current PADI run rate, I project 2026 dividend income to total $55,508 (flat) or $55,577 when accounting for expected dividend growth.

Over the next 12 months, I project dividend income of $56,808 (flat) or $57,619 with expected dividend growth.

Since starting my dividend growth investing journey in January 2013, I've collected and reinvested dividends totaling $395,302.

Q3-2026 dividend income totaled $14,187, up 5.9% year over year.

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

• Applied Materials (AMAT): income of $23.85
• Atmos Energy (ATO): income of $60.00
• Broadcom (AVGO): income of $42.25
• BlackRock (BLK): income of $51.57
• Badger Meter (BMI): income of $74.80
• CBOE Global Markets (CBOE): income of $43.00
• Cintas (CTAS): income of $85.80
• Chevron (CVX): income of $89.00
• Alphabet (GOOG): income of $11.00
• Hubbell (HUBB): income of $42.60
• KLA (KLAC): income of $29.90
• Kinsale Capital (KNSL): income of $18.00
• Eli Lilly (LLY): income of $51.90
• LeMaitre Vascular (LMAT): income of $53.00
• Main Street Capital (MAIN): income of $101.70
• McDonald's (MCD): income of $93.00
• Mueller Industries (MLI): income of $70.00
• Microsoft (MSFT): income of $109.20
• Northrop Grumman (NOC): income of $56.81
• PACCAR (PCAR): income of $35.00
• Primerica (PRI): income of $102.00
• QUALCOMM (QCOM): income of $38.64
• Rollins (ROL): income of $45.62
• Snap-on (SNA): income of $85.40
• TJX (TJX): income of $48.00
• Travelers (TRV): income of $68.75
• UnitedHealth (UNH): income of $55.68
• Visa (V): income of $80.40

The following funds paid regular distributions in September:

• BlackRock Enhanced Global Dividend Trust (BOE): income of $289.45
• BlackRock ESG Capital Allocation Term Trust (ECAT): income of $1,209.46
• Western Asset Emerging Markets Debt Fund (EMD): income of $332.50
• NXG NextGen Infrastructure Income Fund (NXG): income of $1,800.00

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

PMDI at September-end was $4,734, down 0.7% from $4,767 last month and up 5.6% from $4,485 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

Two DivGro stocks announced dividend increases or paid higher dividends in September.

Dividend Increases

• Microsoft (MSFT): increase of 7.69% (PADI +$33.60)
• McDonald's (MCD): increase of 3.76% (PADI +$14.00)

I like to see dividend increases above 7%. One of this month's 2 dividend increases topped 7%, and the median dividend increase of 5.73% exceeds the US annual inflation rate of 3.4% (August 2026).

Dividend Decreases

• BlackRock ESG Capital Allocation Term Trust (ECAT): decrease (PADI -$0.11)

ECAT reduced its distribution, trimming projected annual dividend income by $0.11. Position snapshot: opened on 2024-12-23, cost basis $67,535, 4,500 shares, currently $14.08, yield 22.91%. Cumulative distributions received total $18,676; since-open total return +21.47%.

Transactions

In September, I added shares to one existing position and reduced my holdings in one position. Both these trades were due to options assignments.

Increased Positions

• Applied Materials (AMAT): +100 shares → 145 shares (PADI +$212.00)

Reduced Positions

• Accenture plc (ACN): -100 shares → 106 shares (PADI -$652.00)

Portfolio Statistics

Given DivGro's total portfolio value and the total capital invested, the portfolio has returned about 804% since inception.

DivGro's internal rate of return [IRR] is 14.61%. 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 decreased from 5.41% last month to 5.26% this month.

Another interesting statistic is the percentage payback, which relates dividend income to invested capital. DivGro's average percentage payback is 37.3%, down from 37.6% last month.

Projected annual yield is calculated by dividing PADI ($56,808) by the total amount invested. DivGro's projected annual yield is 26.87%, down from 27.06% last month.

Since founding DivGro in January 2013, my portfolio has generated $403,050 in dividend income. Additionally, I've added $280,693 in options income after initiating an options trading strategy in June 2016. That totals $683,743 in income over 165 months (13 years and 9 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 October 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 October. Last-year percentages are rough baselines, not predictions.

Future Editions

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

• November 2026 Newsletter: Monday, 9 November 2026
• December 2026 Newsletter: Monday, 7 December 2026
• January 2027 Newsletter: Monday, 4 January 2027