Expected Dividend Increases for December 2019

As I'm writing this post, we're in the final week of the month and Thanksgiving is just days away! It's hard to believe that the year is only five weeks away from drawing to a close. I guess time flies when you're having fun watching the Packers and Bucks win on a consistent basis while you're also blogging, not to mention writing for Seeking Alpha?

Given that we're nearing the end of November, that brings us to the purpose of this post. Of course, we'll be examining the dividend increases that we received in November while also previewing the dividend increases that we are expecting for December.

Buckle in because while November was relatively slow for yours truly on the dividend increase front, December will be a very busy month on the dividend increase front and I suspect it will be for many of you too because there are many common dividend growers slated to increase their dividends this month!




Dividend Increase #1: Hormel Foods Corporation (HRL)

At the time of writing, HRL has yet to announce a dividend increase. Given that HRL has typically increased its dividend in late November, I would expect a dividend increase to be on its way any day at this point. I would also reiterate my expectation for a 9.5% increase in HRL's quarterly dividend/share from $0.21 to $0.23 that I outlined in my previous post in this series. As I had also mentioned before in my previous post, this would have a rather negligible impact on my dividend income (less than $0.005, but really $0.00 because I already get the benefit of rounding to the nearest cent on quarterly dividends in my M1 Finance account) given that HRL accounts for less than 0.1% of my income.

Dividend Increase #2: Starbucks (SBUX)

Technically, SBUX announced a 13.9% increase in its quarterly dividend from $0.36/share to $0.41/share on October 30.

I'm willing to give myself a pass on this one since SBUX is a rather small position within my portfolio, so I wasn't aware that the company was announcing earnings in October rather than in November.

In retrospect, my prediction of a low to mid-teen percent range from SBUX proved to be correct.

Similar to HRL, as great as this raise was for many in the community, I sadly didn't benefit from it in a meaningful way due to my very limited position in the company through my M1 Finance account.

Dividend Increase #3: AbbVie (ABBV)

AbbVie announced a 10.3% increase in its quarterly dividend from $1.07/share to $1.18/share. AbbVie also lifted its non-GAAP EPS from $8.82-$8.92 to $8.90-$8.92. Total revenues increased 3.0% YOY to $8.479 billion in Q3 2019 while non-GAAP EPS increased 8.9% YOY. AbbVie's dividend increase shows that management remains confident in its ability to make up for declining Humira sales, which is comforting as an investor whose position in AbbVie is in my top 10. Across my 5 shares, this boosted my annual forward dividends by $2.20.

Expected Dividend Increases for December:

Expected Dividend Increase #1: Realty Income (O)

Realty Income will once again likely be announcing a small increase in its monthly dividend in the month of December. I am expecting O's monthly dividend to increase from $0.2270/share to $0.2275/share, which would represent a 0.2% dividend increase.

While this may seem small, we need to keep in mind that O typically announces 4 small dividend increases throughout the year, and announces a larger 2-3% increase in January.

Across my 4 shares, this would result in an additional $0.024 in annual forward dividends.


Expected Dividend Increase #2: WP Carey (WPC)

Similar to O, WPC announces 4 small quarterly dividend increases throughout the year. I am expecting WPC to announce a 0.2% increase in its quarterly dividend from $1.036/share to $1.038/share.

Across my 3 shares, this would increase my annual forward dividends by $0.024.

Expected Dividend Increase #3: Ventas (VTR)

Unlike O and WPC, VTR is a REIT that has historically announced dividend increases only in December. I don't see any reason why this trend won't continue this year, so I'm expecting a 0.3% raise in the quarterly dividend from $0.7925/share to $0.7950/share.

With the somewhat weak guidance from VTR and the fact that the senior housing market hasn't appeared to bottom yet, I would expect VTR to be very conservative with its dividend increase once again this year as they proved to be last year.

This would result in a $0.04 boost to my annual forward dividends across my 4 shares.

Expected Dividend Increase #4: AT&T (T)

T is yet another name that I am expecting to continue its trend of increasing its dividend in December. And similar to previous years, I am expecting the customary $0.01 raise or ~2% raise in its quarterly dividend from $0.51/share to $0.52/share.

While T is making great progress in its deleveraging efforts (the company expects its leverage to decrease to 2.5 times by year end) and Simply Safe Dividends upgraded the company's dividend from borderline safe to safe recently, T is still a ways off of its goal of hitting 2.0 to 2.25 times leverage ratio by the end of 2022.

Across my 17 shares, this dividend increase would raise my annual forward dividends by $0.68.

Expected Dividend Increase #5: Pfizer (PFE)

PFE is a company that is a bit of a wildcard this year compared to last year. Aside from the deal with GlaxoSmithKline to combine to consumer health businesses of the two, PFE is also creating a ~$20 billion a year in revenue global pharmaceutical company with Mylan, which will be called Viatris and focus on the off-patent medications of the two companies.

While PFE expects dividend investors to offset the cut in PFE's dividend through the dividend of Viatris, it's difficult to really predict whether PFE will increase its dividend this year with so much going on.

If PFE does increase its dividend this year, I expect it will be smaller than last year's 5.9% raise. I would expect a 2.8% raise in the quarterly dividend from $0.36/share to $0.37/share if the company does decide to increase its dividend.

Across my 8 shares, this would boost my annual forward dividends by $0.32.

Expected Dividend Increase #6: Amgen (AMGN)

Continuing in the pharma/biotech space, another dividend increase that I'm expecting is from AMGN.

Given the company's payout ratio has a bit of room to expand and the company is expected to deliver mid-single digit earnings growth next year, I believe it's reasonable for us to expect a 9% raise in AMGN's quarterly dividend from $1.45/share to $1.58/share.

This would equate to a $0.52 increase in my annual forward dividends with my single share of AMGN.

Expected Dividend Increase #7: Dominion Energy (D)

D is another wildcard dividend increase because of the fact that while the company announced its dividend increase in December last year, they could revert to their previous trend of announcing a dividend increase in January.

Unlike its 9.9% raise last year, this year's raise will be much lower because of the company's announcement that dividend growth will be in the 2-3% range to lower the company's payout ratio over the next few years to a more sustainable level.

It's for this reason that I'm expecting a 2.5% increase in the company's quarterly dividend from $0.9175/share to $.9400/share.

Across my 4 shares, this would boost my annual forward dividends by $0.36.

Conclusion:

Overall, my dividend income increased by $2.20 in November as a result of the dividend increase from AbbVie. At a 4% yield, this is equivalent to investing $55.00 in dividend stocks!

If dividend increases turn out as expected for the month of December, I will receive a $1.968 boost in annual forward dividends. This would require an investment of $49.20 at a 4% yield to replicate!

The next few months of dividend increases will be very strong as we're entering that sweet spot of this year and the next year, which is why I'm very excited to write about all of these raises coming our way from now until next April.

December will be a great month in terms of volume and the number of dividend increases, but April will be just as packed with expected raises from XOM, IBM, and JNJ to name a few.

Discussion:

Are you expecting any significant changes in dividend increases from this year to last year as I am? Are you expecting any raises from new companies in your portfolio compared to last year?

As always, thanks for reading and I look forward to replying to any comments that you may leave in the comment section below.

Why Investing Is My Favorite Activity

Aside from writing and spending time with family, watching sports and YouTube are a couple of my favorite hobbies. However, there's another activity that surpasses all the joys in my life with the exception of spending time with family.

That activity is of course placing investments!

I would attribute this affinity toward investing to three reasons that we'll discuss below:

Reason #1: Investing Will Eventually Buy My Time Back

As someone with numerous interests that I mentioned above, I often find that weekends disappear before they even seem to begin.

As such, I feel as though I never have enough time to do what I'd like.

One of the primary benefits to dividend growth investing, is that with each stock purchase, I'm that much closer to the end goal of buying back my time.

Take for instance the fact that I recently added $40.95 in dividend income through dividend stock purchases with the deployment of fresh capital, reinvestment, and dividend increases.

I know that my semi-FI number of $12-15k could increase within 5-10 years if I decide to have kids, get married, etc., but there's no doubt that last month brought me a step closer to at least semi-FI.

Once I've bought back my time, I'll obviously have the freedom to do what I'd like, when I would like, and with whom I like.

This includes going to bed and getting out of bed whenever I please.

For someone that's naturally geared toward staying up late and that seems to be most productive past midnight, this alone is a huge selling point for me to pursue financial independence, and DGI is my mechanism to do so.

Reason #2: Investing Is A Game To Me

As someone that also enjoys the occasional game of Monopoly, investing in high quality dividend stocks (and especially REITs) is like a real life game of Monopoly.

Every time I buy shares in a great company like Realty Income (O), PepsiCo (PEP), or Lowe's (LOW), I'm buying ownership in world class businesses.

There's something neat about the thought that an average guy like myself is able to buy ownership in dozens of businesses with no commissions considering trading commissions were somewhat cost prohibitive a couple decades ago!

And as someone that is looking to achieve financial independence, it's quite clear that simply keeping my money in a savings account isn't going to create any meaningful wealth for me.

After all, the Paul Allen quote about the lack of savings account millionaires rings true.

Whether one decides to go into business as an owner/operator or as a shareholder, it's an undeniable truth that the only viable way to build wealth is through ownership of some sort.

The great thing about dividend growth stocks, is that I reap the rewards of a company's success regardless of what I do as long as I hold my shares.

The passive nature of DGI is one of the primary reasons that I chose the strategy, and its simplicity is why I enjoy it.

As an investor, I'm simply looking to build a portfolio of companies that I believe will be able to consistently grow their earnings and dividends, and I then monitor those investments a couple times a year.

Reason #3: Investing Is A Virtuous Process Of Improvement

As with anything else in life, we learn as we go regardless of our past experience or lack thereof.

Even though Warren Buffett is arguably the greatest investor of all time, he still spends countless hours learning about investing.

Investing allows us to research investment opportunities, form investment theses, and then evaluate over time whether we were correct.

When we're inevitably wrong and our theses doesn't pan out, we then get a chance to go back and learn where we went wrong.

It's this process that allows us to continuously improve, so that we become better investors.

As further proof of how much of a continuous process investing is, I should note it's time for another post on what I've learned in my second year of investing.

While what I learned in my first full year of investing still applies, I've made at least a few small mistakes in the past year that have contributed to my growth as an investor that I'm excited to share with others.

Concluding Thoughts:

While there are several aspects of life that I enjoy, investing is right up at the top of the list.

Investing will ultimately allow me to buy back my time and live life on my terms.

Investing is also enjoyable to me in the sense that it allows me to buy ownership in wonderful businesses.

The great thing about this ownership is the only condition for me to continue reaping the rewards is that I need to hold onto my shares.

Investing also forces me to continue honing my craft through research, forming investment theses, and evaluating how those theses play out.

Discussion:

Did I miss any other factors that make investing fun? What do you enjoy most about investing?

October 2019 Dividend Income

Can you even believe it? The fourth quarter of 2019 is well under way, with one month under our belt and only two remaining!

That means we'll be examining what my dividend portfolio was able to produce in dividends during the month of October.

Analysis:

Overall, I collected $41.91 in dividends during the month of October.

This represents a 23.8% quarterly growth rate compared to July 2019's $33.84 in dividend income, and a 96.6% YOY growth rate compared to October 2018's $21.32 in dividend income.

Breaking this during further, $35.63 originated from 12 companies in my Robinhood account, 2 in my Webull portfolio totaling $6.03, and $0.25 from 13 companies in my M1 finance that paid dividends during the month.

There were a variety of developments that accounted for the $8.07 increase in dividend income from July to October.

I received a $0.12 increase in my dividend income as a result of Philip Morris' (PM) dividend increase announced in September.

I also received an additional $3.51 in dividend income as a result of my purchase of 3 shares of PM before the ex-dividend date in my Webull account.

In addition, I received $2.52 in additional dividends from Altria Group (MO) because of my purchase of 3 shares of MO before the ex-dividend date in my Webull account.

I also benefited from a $0.28 increase in dividends as a result of MO's dividend increase announced in August, as well as an additional $1.68 in dividend income from my purchase of 2 MO shares in my Robinhood account following its dividend increase.

WP Carey (WPC) increased its quarterly dividend and with that increase, my dividend income was boosted $0.01 following WPC's dividend increase in September.

GlaxoSmithKline (GSK) paid $0.05 less in dividends compared to July 2019 because of its varying dividend rate.

Summary:

October was yet another month of significant progress for the portfolio, and there's a chance that this will be the portfolio's final month of dividend income coming in under $50.

We're so fortunate to be living in a time of low/no cost trading commissions.

At the time of writing, the portfolio now consists of 65 stocks and my mutual fund holding, CAIBX. I'm receiving 272 dividend payments each year as a result of the portfolio's diversification.

Not many years ago, this level of diversification for a portfolio worth less than $20k wouldn't have been economically feasible.

Heck, I'm not even sure if a $100k portfolio in that many names would have been possible a decade ago due to the fees of building out such a diversified portfolio.

Discussion:

How was your October for dividend income? Did you have any new dividend payers during the month?

As always, thanks for reading and I look forward to any comments that you may leave in the comment section below.

October 2019 Dividend Stock Purchases

Another month has passed us by and for those of us in the Midwest, arctic temperatures, massive snowfalls, and dangerous driving conditions are just around the corner.

On that note, we'll be examining a much more upbeat and exciting topic - which is of course, my dividend stock purchase activity for the month of October. Let's delve into it, shall we?

As illustrated above, I started October by adding to my position in Energy Transfer (ET) by purchasing a unit at $13.00. I added to my a unit to my position in ET two more times in my Robinhood portfolio, and opened a position in ET in my Webull account, purchasing a couple more units, bringing my total unit count to 29 to end the month.

In total, this increased my annual forward distributions by $6.10 across the 5 units that I added. My cost basis on each unit for the month was $12.66 against the $1.22 annualized distribution, for a yield of 9.64%. For a more comprehensive rationale on my decision to add to my position in ET, I would refer interested readers to my most recent article on the company on Seeking Alpha.

The next purchase for the month was UnitedHealth Group (UNH). I began the month of October with a bang, opening a position in 3 different companies in the first couple days of the month.

My 1 share starter position in UNH was initiated at a cost of $216.68, for an entry yield of 1.99%. I detailed my thoughts on what would eventually support my decision to open a position in UNH in a guest post on Sick Economics for those that would like a more detailed analysis of the company.

This purchase increased my annual forward dividends by $4.32.

The second position that I would open during the month of October was Wells Fargo (WFC).

I opened a 5 share starter position in WFC at an average cost basis of $48.58 a share, for an entry yield of 4.20%. This purchase boosted my annual forward dividends by $10.20.

Yet again, I would refer interested readers to my recent article on WFC on Seeking Alpha.

The third position that I opened during the month of October was Lockheed Martin (LMT).

My 1 share starter position in LMT was initiated at a cost of $375.45, for an entry yield of 2.56%, which increased my annual forward dividends by $9.60.

I also covered my thoughts which led to me initiate a position in LMT the week prior to my article being published on Seeking Alpha for those interested in an in-depth analysis of the company.

The final position that I initiated in my taxable accounts came in the last week of October, with a 2 share purchase to initiate a position in Visa (V).

For readers that have been paying particularly close attention to my blog posts and my articles on Seeking Alpha, they'll notice that over the past 4 months or so, I've very positively mentioned V at least 3 separate times while writing about other companies.

While I've known V to be a great company for years now, it wasn't until I was writing an article discussing my first major investing revelation in a blog post a few months back that I began to truly appreciate the likes of companies such as V.

Until I actually did the math and looked at the payback periods on a company like V versus AT&T (T) and the yield on cost of both after a couple decades, I never fully realized how necessary rapid dividend growers like V are to a dividend growth portfolio.

T may bring the massive dividend at this point in time, but there's no doubt V brings tremendous growth through the secular tailwind of actual cash becoming a rarer and less preferred commodity to pay for goods and services.

I've since adopted more of an affinity to evenly split my investments between low yield/high dividend growth, moderate yield/moderate dividend growth, and high yield/low dividend growth companies.

In the days ahead, I anticipate writing an article on Seeking Alpha with a more detailed analysis of what led me to specifically choose V as a fast growth investment now that we've discussed in a bit more detail my recent shift in dividend investing strategy.

My 2 share starter position in V was initiated at an average cost per share of $178.69, for an entry yield of 0.67%, adding $2.40 in annual forward dividends.

The other activity in my investment portfolio, but more specifically in my retirement account, is that I I was able to add 3.806 shares of my mutual fund holding, CAIBX during the month of October.

This increased my annual forward dividends by $8.14 (assuming the same $0.14 special dividend that was paid last year).

Summary:

My annual forward dividends/distributions increased were boosted by $40.76 due to the $1,499.71 in capital that I deployed during the month of October.

This equates to an average yield of 2.72%, which demonstrates my commitment to adding more of the classic companies when one thinks of a DGI portfolio to balance out the heavy hitters in the portfolio in terms of yield.

The four new positions that I initiated this month brings the number of whole share positions in my portfolio to 42 while I also own 23 different names in my 50 stock M1 Finance portfolio with fractional shares, bringing the total number of stocks in my portfolio to 65 and CAIBX.

Overall, the portfolio continues to make massive strides in being built to the ultimate goal of about 100 different stocks.

At the time of writing, the only dividend/distribution increase that I have received during the month of October is the 0.6% increase in Enterprise Products Partner's quarterly distribution from $0.44/unit to $0.4425/unit.

I do believe that Iron Mountain (IRM) will increase its dividend in the course of the next few days, however.

At any rate, my annual forward dividends/distributions increased $40.95 as a result of my investments and EPD's distribution increase.

Over the past month, I was able to increase my annual forward dividends/distributions by 5.7% from $717.51 to $758.46.

I will also have enough saved up to fully finance the purchase of a 3 to 4 year old car with less than 30k miles by early to mid-January in spite of my strong investments the last couple months.

Besides that, I will also have a small emergency fund built up by this spring and the ability to pay off my ~$2,000 in credit card debt that is interest free until next June.

Discussion:

Are you dreading the thought of winter weather as much as I am? Did you add any new names to your portfolio? How did you do in terms of deploying capital in the month of October?

Thanks for reading and I look forward to replying to any comments that you leave below!