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Hey, Zach here! Happy Monday…

I wanted to share a detailed update from my latest video, diving into my current portfolio and investing strategy.

I’ve also highlighted my key thoughts on three stocks I'm buying right now – along with their bull and bear cases.

Today’s topics:

1. My $207k Dividend Portfolio Update

2. My Best 3 Stocks To Buy Now

3. New Dividend Increases

Let’s do this!

Monthly Portfolio Update

My $207k Dividend Growth Portfolio

Portfolio Overview

• My long-term dividend growth portfolio is currently valued at over $270k with $127k invested, marking a total return of around $79k (62%).

• The portfolio consists of 12 stocks with a significant allocation in my top holdings such as Visa and Microsoft, complemented by some high-yield positions like Altria and Exxon Mobil.

• I’ve also recently added stocks like Alphabet and Salesforce, which I’ll discuss later.

Investing Strategy

• I’m focused on companies with enduring competitive advantages that consistently grow their earnings and free cash flow.

• My strategy revolves around dividend growers and initiators, which have proven to deliver strong total returns and increasing income over time.

• I look for businesses that not only increase their dividends but also reward shareholders with share repurchases whenever possible.

• With a long investing horizon ahead, I view market sell-offs as buying opportunities for high-quality companies.

Dividends & Compounding

• My portfolio is projected to generate about $4,659 in annual dividend income – roughly $1,100 each quarter, $388 monthly, $12 per day, and 53 cents every hour.

• Reinvesting dividends has been a powerful force, enhancing my overall yield on cost from 3.15% to 3.65% and compounding my returns over time.

New Buys

My Top 3 Stocks To Buy in 2025 Sell Off

Below are my detailed thoughts on each of the three stocks I’m buying during this market sell-off, including both the bullish and bearish perspectives:

1. Alphabet (GOOGL)

• Key Thoughts:

  • A high-quality tech giant with earnings per share at all-time highs and impressive financial metrics.

  • Strong revenue growth driven by its dominant search business and growing YouTube ads segment.

  • Solid balance sheet with $325 billion in shareholder equity and $95 billion in cash.

  • Recently initiated a sustainable dividend with room to grow.

  • Trading at around 20x trailing EPS, which seems low relative to its growth projections.

• Bull Case:

  • Leading in AI & machine learning advancements, which could further boost profitability in its core search and YouTube advertising segments.

  • Potential for massive gains as projected EPS could double-digit grow by fiscal 2029, narrowing the forward P/E significantly.

• Bear Case:

  • Heavy investments in AI could pressure short-term returns if capital expenditures don’t yield expected results.

  • Increased competition (e.g., emerging AI-driven search alternatives) could erode market share in search digital advertising.

  • Exposure to the cyclical nature of the advertising market, which can be sensitive to economic downturns.

2. Microsoft (MSFT)

• Key Thoughts:

  • A cornerstone in my dividend growth portfolio, offering stability and predictable recurring revenue.

  • Robust growth in cloud (Azure) and AI segments, with a solid track record of consistent dividend increases since 2005.

  • Strong margins (69% gross, 35% net) and healthy financial metrics with $32 billion in shareholder equity.

  • Benefits from its diversified revenue streams – from subscription software (Microsoft 365) to enterprise cloud services.

• Bull Case:

  • Market leader in productivity software and cloud, poised to capture multi-decade growth opportunities.

  • New AI Revenue in cloud business, growing incredibly fast (175% YoY)

  • Ongoing integration of AI across its product suite could significantly enhance revenue and margins.

  • Reliable, recurring subscription revenue provides a strong foundation for continued earnings growth.

• Bear Case:

  • The risk mainly lies in execution – particularly around achieving high returns on significant capital expenditures in AI.

  • Competitive pressures in both the cloud and productivity software segments could challenge growth.

  • Any missteps in adapting to rapid technological changes might slow the momentum of its revenue growth.

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3. Salesforce (CRM)

• Key Thoughts:

  • An enterprise SaaS leader with a robust subscription model and consistent revenue growth.

  • Demonstrated impressive 10-year compound annual growth (CAGR) in revenue per share and free cash flow.

  • Recently began paying dividends and has a strong balance sheet with solid free cash flow generation.

  • Currently trading below consensus price targets, suggesting a potential undervaluation.

• Bull Case:

  • Leveraging AI to enhance its platform (e.g., through AI agents in product like AgentForce) could drive further growth.

  • Its integrated ecosystem creates a sticky economic moat, making it hard for customers to switch providers.

  • Minimal capital expenditure requirements compared to tech giants mean more free cash flow available for growth and shareholder returns.

• Bear Case:

  • Execution risk in scaling AI capabilities and integrating new technologies might affect its competitive edge.

  • Potential disruption from companies developing low-cost in-house solutions could pressure margins.

  • Rapid technological change in the SaaS market might intensify competition, challenging Salesforce’s market position.

I hope you find this breakdown useful as you evaluate your own investment decisions. As always, make sure to do your own research and consider your personal risk tolerance.

If you enjoyed the video and this update, please hit reply, share your thoughts, or even share this newsletter with others who might benefit from these insights.

If you haven’t already, check out DividendData.com for portfolio tracking and in-depth stock analysis tools—with a special March promo for 50% off the annual plan!

Dividend News

18 Dividend Raises From This Week!

Dividends keep growing! This week, we got increases from popular stocks like Domino’s and TJX.

• $DPZ - Domino's Pizza declares $1.74/share quarterly dividend, 15.2% increase from prior dividend of $1.51.

• $STLD - Steel Dynamics declared $0.50/share quarterly dividend, 8.7% increase from prior dividend of $0.46.

• $WTW - Willis Towers Watson declares $0.92/share quarterly dividend, 5% increase from prior dividend of $0.88.

• $SBAC - SBA Communications declared $1.11/share quarterly dividend, 13.3% increase from prior dividend of $0.98.

• $SRE - Sempra declared $0.645/share quarterly dividend, 4% increase from prior dividend of $0.620.

• $LIN - Linde declared $1.50/share quarterly dividend, 7.9% increase from prior dividend of $1.39.

• $SLGN - Silgan Holdings declares $0.20/share quarterly dividend, 5.3% increase from prior dividend of $0.19.

• $TJX - TJX declares $0.425/share quarterly dividend, 13.3% increase from prior dividend of $0.375.

• $VRSK - Verisk declares $0.45/share quarterly dividend, 15.4% increase from prior dividend of $0.39.

• $TPB - Turning Point Brands declares $0.075/share quarterly dividend, 7% increase from prior dividend of $0.070.

• $RRBI - Red River Bancshares declares $0.12/share quarterly dividend, 33.3% increase from prior dividend of $0.09.

• $NEU - NewMarket declared $2.75/share quarterly dividend, 10% increase from prior dividend of $2.50.

• $GL - Globe Life declared $0.27/share quarterly dividend, 12.5% increase from prior dividend of $0.24.

• $LMAT - LeMaitre Vascular declares $0.20/share quarterly dividend, 25% increase from prior dividend of $0.16.

• $ORI - Old Republic declared $0.29/share quarterly dividend, 9.4% increase from prior dividend of $0.27.

• $M - Macy's declares $0.1824/share quarterly dividend, 5% increase from prior dividend of $0.1737.

• $LHX - L3Harris Technologies declares $1.20/share quarterly dividend, 3.4% increase from prior dividend of $1.16.

• $FSFG - First Savings Financial declares $0.16/share quarterly dividend, 6.7% increase from prior dividend of $0.15.

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Thanks for the read! Let me know what you thought by replying back to this email.

— Zach

Disclaimer: Dividend Dividend (Dividend Data LLC) is not a professional financial service. All materials released from Dividend Data (Dividend Data LLC) are for educational and entertainment purposes. Dividend Data (Dividend Data LLC) is not a replacement for a professional's opinion. Contributors to the Dividend Data (Dividend Data LLC) might have equities mentioned in the newsletter