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By Josh Peters, CFA | 03-21-2015 01:30 PM

Morningstar's Dividend Playbook

DividendInvestor editor Josh Peters walks investors through his drill for uncovering sustainable and growing dividends in this special presentation.

The following is a replay from the 2015 Morningstar Individual Investor Conference.

Jeremy Glaser: Welcome back to our final session of the day, "Morningstar's Dividend Playbook." Josh Peters, the editor of Morningstar DividendInvestor newsletter and also our director of equity-income strategy, will share some of his thoughts on how to build a portfolio of dividend payers. Just as a reminder, a PDF of the slides are available to download in a link below the player.

With that, I'd like to hand it over to Josh.

Josh Peters: Thank you, Jeremy. And thank you all for joining us here this afternoon. I'd love to have the opportunity to talk about one of my favorite topics, which is dividends. I always think back to the very first dividend check that I received. I was 13 years old. I had bought about $200 worth of the hometown utility stock, Minnesota Power and Light. My first dividend check was for $3.76, which certainly doesn't sound like anything you can retire on now. But it had a big impact on a brand-new investor--this idea that companies can pay you directly. And even though I went on for a series of years speculating--trying IPOs, biotechs, penny stocks, options--that one little dividend check always came back to mind. And eventually, seeing how many other ways there were to fail in investing, it became the root of a very successful investment strategy that we've been able to build here at Morningstar.

So, I'd just like to give you a little bit of an overview of DividendInvestor. I am the manager of its model portfolio, as well as the founding editor of the newsletter itself. In January of this year, we celebrated our 10-year anniversary. I'm very happy to have notched that record, and later on I'll talk a little bit about our performance over this time.

We have also written a book, the title of which has lent itself to the title of today's session, The Ultimate Dividend Playbook, which was released in early 2008. One of my favorite statistics is how many dividends we've actually received. Our model portfolio is built with real money that Morningstar had deposited into a brokerage account many, many years ago. And every time we make a trade, if I say buy, then it is stock that I am actually buying or have bought. If I say sell, it means something that I am actually selling or have sold. Hold means just that. I may not be a buyer or seller, but I am holding it. And over that time, we've collected now more than 1,200 dividend payments from those companies that we've held here over the last 10 years.

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