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.
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