7 Stock Starter Dividend Portfolio

Starting A Dividend Portfolio Is Easier Than You Think

Today I want to review how to put together a starter dividend portfolio.

First, I will introduce a sample dividend portfolio of 7 dividend stocks for your consideration.

Second, we will review 7 steps for setting up a dividend portfolio.

When we are done, I hope you will see that starting a beginner dividend portfolio is easier than you think.

Let’s dive right in…

starter dividend portfolio
Deep thoughts about my dividend portfolio

Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.

7 Stock Starter Dividend Portfolio

Here is a simple dividend portfolio comprised of 7 stocks.

Dividend Portfolio Example

  • Coca-Cola (NYSE: KO)
  • Hormel Foods (NYSE: HRL)
  • Johnson & Johnson (NYSE: JNJ)
  • McDonald’s (NYSE: MCD)
  • NextEra Energy (NYSE: NEE)
  • Procter & Gamble (NYSE: PG)
  • Target (NYSE: TGT)

At any point in time, your portfolio may have more or fewer stocks.

Since there is no magic to the number 7.

On the other hand, you can read more about the optimal number of dividend stocks to hold. Whenever you are ready to do so.

Next, we will discuss setting up a dividend portfolio.

But first…

Improve Your Dividend Investing Knowledge

I want to mention our robust archive of dividend investing articles. So, before you go, be sure to check it out. To level up your dividend investing skills.

One article, in particular, I would like to point out is about how dividends work.

It covers many of the basics of dividend investing. Perfect for anyone just getting started in their journey.

Okay. Let’s get back to today’s topic…

How To Start A Dividend Portfolio

Here are 7 steps for starting a dividend portfolio:

  1. Open a brokerage account
  2. Select and invest in dividend stocks
  3. Ensure the portfolio is diversified
  4. Invest regularly
  5. Reinvest all dividends
  6. Monitor the portfolio and stocks periodically
  7. Adopt a long-term view

Now, let’s discuss each of these steps for beginning a dividend portfolio…

create a dividend portfolio
Beginning investor creating a dividend portfolio

1. Open A Brokerage Account

To create a dividend portfolio, you must have a brokerage account. Fortunately, setting one up is easy to do.

If you already have a brokerage account. Skip down to the next section.

Otherwise here is my suggestion…

I like and use the Webull app to buy dividend stocks. And sometimes sell them.

First, it’s simple to sign up with Webull. Second, the app is fast and easy to use. Finally, it costs nothing to open your account and start buying stocks.

So, don’t let this step slow you down. Learn more about Webull here.

2. Select And Invest In Dividend Stocks

After you have a brokerage account. It’s time to buy one or more stocks.

So, that leads us to the big question you may be asking yourself. What dividend stocks should I buy?

I have suggested 7 different stocks. Held in the dividend portfolio example presented earlier in the article.

How did I choose them? Well, I looked through the list of Dividend Aristocrats. And picked them from that list.

Dividend Aristocrats are stocks that have paid higher dividends every year. For at least 25 years in a row. They are also members of the S&P 500 stock index.

There are only about 65 Dividend Aristocrats. So, they are elite dividend-paying companies.

This is just one way to select dividend stocks. And much more can and should go into your analysis.

On the other hand, if analyzing and picking the best dividend stocks is not your desire. Then check out the Simply Investing Report.

I have used Simply Investing for years to add stocks to my dividend portfolio. The report covers hundreds of dividend stocks from the United States and Canada.

Then, Simply Investing delivers stock recommendations each month. On the best dividend stocks to buy at that time.

In this way, Simply Investing does the stock research. So you don’t have to.

You can learn more about the Simply Investing report here.

3. A Good Dividend Portfolio Is Diversified

When starting a dividend portfolio for regular dividend income. There is more to it than just selecting some stocks.

Specifically, you want your fledgling dividend portfolio to be diversified.

What I mean is the stocks you hold should be from companies that are different. But, different in what way?

Mainly different in that they operate in a variety of industries.

Let’s use the 7 stocks in the starter dividend portfolio as an example…

  • Coca-Cola: Beverages
  • Hormel Foods: Packaged foods
  • Johnson & Johnson: Health care
  • McDonald’s: Restaurants
  • NextEra Energy: Electricity
  • Procter & Gamble: Household goods
  • Target: Retailing

Why is this important?

Well, just like you shouldn’t put all of your money into one stock. You shouldn’t put all of your money into one industry.

For example, I could have suggested 7 excellent stocks that pay dividends in the health care industry. But that would not be acceptable diversification.

Because industry diversification helps insulate the portfolio. From the negative effects of one industry running into financial trouble.

4. Invest Regularly In Your Beginner Dividend Portfolio

When it comes to dividend investing, one thing is critical. And that is? Consistency.

So, adding new money to your starter dividend portfolio regularly is step 4.

Thus, go through your budget with a fine-tooth comb. To see how much money for dividend investing you will have.

I can assume that you wouldn’t be reading this article. If you didn’t have some money to invest.

But take it to the next level. See if you can reduce some expenses. Or make a little extra money with a side hustle.

If you need a good online budgeting tool. I suggest Personal Capital. Use it to pull your spending and budget together in one place.

Because knowing where you spend your money. Is the first step towards reducing what you spend.

Learn more about Personal Capital here.

Furthermore, when you get a raise or bonus from work. Don’t spend it. Allocate it to your beginner dividend portfolio.

To summarize step 6, figure out how much money you can spare each month. Then set up a direct deposit to your brokerage account. Finally, when the money is available, invest it in the dividend stocks of your choosing.

5. Reinvest All Dividends Into Your Simple Dividend Portfolio

Aside from adding new money. One of the fastest ways to grow your dividend portfolio is to reinvest all dividend payments received.

Either request your broker to reinvest them automatically into the stock that paid them.

Or, let them accumulate in cash. Then reinvest them lump-sum each month. Along with the new cash that gets direct deposited into your brokerage account.

6. Monitor Your Starter Dividend Portfolio

At least once or twice per year, review your portfolio. Do this from two different perspectives.

First, are the reasons you bought each stock still valid? If not, maybe one or more stocks should be sold.

For example, I chose each stock for today’s dividend portfolio example because it was a Dividend, Aristocrat.

Being a Dividend Aristocrat was my primary stock selection criteria. Along with making sure the portfolio had adequate industry diversification.

So, if one of my stocks fails to raise its dividend in a future year.

Thus, losing its status as a Dividend Aristocrat. I should be aware of that. And consider if holding the stock remains appropriate.

Second, you should monitor the overall portfolio make-up. To ensure no one stock or no single industry becomes too large. Thus, destroying the diversification you set out for in the first place.

This may happen because of stock price changes. Some stocks will do better than others. Creating imbalances in your diversification.

You can address this by adding new money to stocks that have performed poorly. Or, selling stocks that have done exceptionally well. Or, a combination of both of these actions.

Finally, if you have made it to this point. And these types of investment activities do not appeal to you.

Then, I suggest you consider investing in funds that pay dividends. Rather than individual stocks.

7. Adopt A Long-Term View

The last step in starting a dividend portfolio is adopting a long-term view.

Why?

First, because dividend investing isn’t a get-rich-quick scheme. Second, there will be times when stocks go down. Reducing the value of your portfolio,

So, stay focused on the process. By investing new money regularly. Reinvesting all dividends. And monitoring your portfolio.

Lower stock prices can be a good thing. Because you will be able to buy more dividends for the dollars you have to invest.

As long as your stocks continue to pay and increase their dividends. Over time, you will start to see the compounding impact of dividend stock investments on your wealth.

It can be quite dramatic. But only if you think long-term. And stick with the process.

Okay. Let me wrap up with a few concluding thoughts…

How To Build A Starter Dividend Portfolio?

7 steps for starting a dividend portfolio
Summary of 7 stocks and 7 steps

A 7 step process for a beginning dividend investor to create a 7 dividend stock portfolio.

Because building a beginner dividend portfolio boils down to having a good investment process. And sticking with it.

7 Steps To Start A Dividend Portfolio

The process I suggest involves these steps:

  1. Open a brokerage account
  2. Select and invest in dividend stocks
  3. Ensure the portfolio is diversified
  4. Invest regularly
  5. Reinvest all dividends
  6. Monitor the portfolio and stocks periodically
  7. Adopt a long-term view

Follow these steps and you can create a dividend portfolio that looks like this…

7 Stock Starter Dividend Portfolio Example

  • Coca-Cola
  • Hormel Foods
  • Johnson & Johnson
  • McDonald’s
  • NextEra Energy
  • Procter & Gamble
  • Target

Your exact portfolio may have more or fewer stocks. And it could have entirely different stocks.

But for my money, these 7 stocks would make a good dividend portfolio!

Before you go…

Are You Ready For More Dividend Investing Tips?

I already mentioned this. But, will do so again…

Check out our dividend investing post archives.

They are arranged in a way that with one quick scroll you can see our 100+ dividend investing articles.

Why?

For learning how to make more money from dividends!

conclusions about investment income
Conclusion: Starter Dividend Portfolio

Disclosure & Disclaimer: I am not a licensed investment adviser, financial adviser, or tax professional. And I am not providing you with individual investment advice, financial guidance, or tax counsel. Furthermore, this website’s only purpose is information & entertainment. And we are not liable for any losses suffered by any party because of information published on this blog.

I own all of the stocks mentioned in this article.

Starter Dividend Portfolio Explained