Expected Dividend Increases for November 2021

As I'm writing this blog post, it is the last week of October and only two months remain in the year. In a couple of weeks, Daylight Saving Time will be hitting Wisconsin. This basically means goodbye to daylight and hello to darkness by 5 PM!

Moving past complaining about the looming winter and to the focus of this blog post, I will be discussing the dividend increases that I received in October and what I'm expecting for November 2021. 

Actual Dividend Increases for October 2021

Dividend Increase #1: American Electric Power (AEP)

As I predicted in the previous post of this series, American Electric Power announced a 5.4% increase in its quarterly dividend from $0.74 per share to $0.78 per share. This is a sensible dividend increase since analysts are expecting AEP's EPS to also grow by 5.4% to $4.68 this year.

Across my 11 shares of the stock at the time of the announcement, my net annual forward dividends advanced $1.76 due to AEP's dividend increase.

Dividend Increase #2: Visa (V)

While Visa hasn't announced a dividend increase yet, I anticipate that will happen by October 29th. I am reiterating my previous expectation of a 12.5% increase in the quarterly dividend from $0.32 per share to $0.36 per share. This is because Visa's mid-teen earnings growth that is expected for this year supports such a dividend increase.

If this dividend increase plays out as I anticipate, my net annual forward dividends will grow by $0.48 as a result across my three shares of the stock.

Update: Visa crushed my expectations with its announcement that it was raising its quarterly dividend by 17.2% from $0.32 per share to $0.375 per share! Given that Visa was conservative with its dividend increase last year, it makes sense that the company would want to make it up to investors this year.

Visa's dividend increase helped to boost my net annual forward dividends by $0.66 across my three shares of the stock.

Dividend Increase #3: Exxon Mobil (XOM)

Exxon Mobil was able to extend its dividend increase streak to 38 consecutive years and maintain its status as a Dividend Aristocrat. XOM announced a 1.1% increase in its quarterly dividend from $0.87 per share to $0.88 per share. 

Across my 11 shares of the stock, this dividend increase led my net annual forward dividends $0.44 higher.

Dividend Increase #4: Magellan Midstream Partners (MMP)

Magellan Midstream Partners announced a 1% increase in its quarterly distribution from $1.0275 per unit to $1.0375 per unit, which was a welcomed increase.

This increase helped my net annual forward dividends to rise $0.44 across my 11 units of the stock.

Dividend Increase #5: AbbVie (ABBV)

Since I found out that AbbVie is reporting its third quarter earnings the final Friday of October rather than November, I am expecting a dividend increase in October rather than November.

Because analysts are anticipating that ABBV's EPS will surge 19.3% to $12.60 this year, I am confident that ABBV will announce a 10% increase in its quarterly dividend from $1.30 per share to $1.43 per share.

Across my seven shares of ABBV, my net annual forward dividends would soar by $3.64 if this dividend increase were to occur.

Update: ABBV announced an 8.5% increase in its quarterly dividend from $1.30 per share to $1.41 per share. Even though this was slightly beneath my expectations of a 10% raise, it's incredible that a company of ABBV's size is still handing out high-single-digit dividend increases. The only reason my expectations were so high is because of ABBV's beautiful execution throughout its corporate history.

Across my seven shares of ABBV, my net annual forward dividends surged by $3.08 as a result of the announcement.

Expected Dividend Increases for November 2021

Expected Dividend Increase #1: KeyCorp (KEY)

Because KeyCorp's management team indicated that they would be considering a dividend increase in the fourth quarter on their Q2 2021 earnings call, I believe it is reasonable to expect a 10.8% increase in the quarterly dividend to $0.205 per share from $0.185 per share. This is especially the case since KeyCorp hasn't announced a dividend increase since July 2019, so a bigger increase than usual could be in the works.

If this dividend increase plays out as expected, my net annual forward dividends would advance $1.76 across my 22 shares of the stock.

Expected Dividend Increase #2: Merck (MRK)

The second dividend increase that I'm expecting for November is from Merck.

Since analysts are forecasting 27.2% growth in MRK's EPS this year, I believe that MRK will deliver a solid dividend increase in a few weeks.

That's why I'm expecting MRK will announce a 9.2% increase in its quarterly dividend from $0.65 per share to $0.71 per share.

Across my eight shares of MRK, this would raise my net annual forward dividends by $1.92 if the dividend increase works out how I expect.

Expected Dividend Increase #3: Pinnacle West Capital (PNW)

Pinnacle West Capital didn't announce its dividend increase in October, but I expect that it will do so in early November when it reports its earnings. And despite the regulatory headwinds that the company has faced this year, I am still expecting a dividend increase. I am moderating my expectations a bit, so I am lowering my dividend increase from 4.8% to 3.6%.

With my seven shares of PNW stock, my net annual forward dividends would be boosted by $0.84 as a result of such dividend announcement.

Concluding Thoughts:

I received $6.38 in dividend increases from AEP, V, XOM, MMP, and ABBV in October. A $6.38 increase in net annual forward dividends at a 3.5% yield would require a $182.29 investment to replicate.

November 2021 is looking like it will only include three dividend increases, but I will receive $4.52 in dividend increases during the month if all announcements play out the way I expect. This would take $129.14 in capital to match at a 3.5% dividend yield. 

Discussion: 

How was your October 2021 for dividend increases?

Did you receive any first-time dividend increases as I did from AEP in October?

Thanks for reading and I look forward to your comments!

November 2021 Dividend Stock Watch List

As I'm writing this blog post, only two weeks remain in October. This means that it's time to start thinking about putting several stocks on my watch list for the next month.

Without further ado, here are three stocks that I'm considering adding to in November 2021.

Image Source: Pexels

Dividend Stock #1: Johnson & Johnson (JNJ)

The first dividend stock on my watch list for November 2021 is one that I haven't added to since this past April, which is Johnson & Johnson.

As I discussed in a Motley Fool article earlier this month on Johnson & Johnson, the stock is diversified with its three different segments of pharmaceuticals, medical devices, and consumer health. 

At $161 a share, Johnson & Johnson also offers a reasonably attractive mix of growth and value. That's because Johnson & Johnson expects to generate $9.60 to $9.70 in adjusted diluted EPS this year (page 2 of Johnson & Johnson's Q2 2021 earnings press release), which is a P/E ratio of less than 17 times this year's earnings.

Since analysts are forecasting 9% annual earnings growth for Johnson & Johnson in the next five years, this is a price to earnings growth or PEG ratio of less than 2.

And considering that Johnson & Johnson's adjusted diluted EPS payout ratio will be in the low-40% range for this year (based on $4.19 in dividends per share that will be paid and $9.60 to $9.70 in adjusted diluted EPS), Johnson & Johnson's dividend is in line to grow in the mid to upper-single-digits annually for the foreseeable future.

Pairing that kind of growth potential with a 2.6% yield from a Dividend King is an attractive proposition.

Dividend Stock #2: WEC Energy Group (WEC)

The next dividend stock for my watch list next month is one that I haven't added to since February, which is WEC Energy Group.

I elaborated in a recent Motley Fool article why I believe that WEC Energy Group is one of the smartest stocks that an investor can buy with $200.

The first reason is that WEC Energy Group is a utility with size and scale, serving 4.6 million customers across my home state of Wisconsin, Illinois, Michigan, and Minnesota (according to slide 2 of WEC Energy Group's September 2021 Investor Presentation). This would be very difficult to replicate, which results in a moat for the company.

Secondly, WEC Energy Group's EPS has grown at a 7% rate annually over the past five years and based on the company's capital spending plans over the next five years, that appears as though it will likely continue.

This is precisely what will allow WEC Energy Group to continue to grow its dividend around 7% annually for the foreseeable future.

When you combine WEC Energy Group's fairly valued 3% yield with 7% annual growth, there's a lot to like about annual total returns around 10%.

Dividend Stock #3: Main Street Capital (MAIN)

The third dividend stock on my watch list for November 2021 is Main Street Capital, which I haven't added to since I opened a position during the COVID crash of March 2020.

Main Street Capital is a business development company or BDC. This means that Main Street Capital invests in the under-served lower middle market (LMM) of businesses with annual revenue between $10 million and $150 million (all info sourced from Main Street Capital's Second Quarter 2021 Investor Presentation, unless otherwise specified). 

Main Street Capital invests in both debt and equity within the LMM. Main Street Capital also has only 7% exposure to its top industry of construction and engineering in its portfolio, which is a great deal of diversification. This is what helped Main Street Capital to nearly double its dividend from $0.33 per share paid in Q4 2007 (the date of its initial public offering or IPO) to $0.63 per share that will be paid in Q4 2021.

Main Street Capital's investment-grade BBB- credit rating from S&P on a stable outlook also differentiates it most other BDCs.

Throw in that Main Street Capital has been able to grow its net asset value per share (the basis on which the quality of a BDC is judged) 4.5% annually from 2007 to June 2021 and this is why Main Street Capital is the only BDC I ever plan on owning.

Main Street Capital's trailing twelve months' yield of 5.8% is only about 8% below its 13 year median yield of 6.3% per Gurufocus, which suggests the stock is only slightly overvalued.

While adding to Main Street Capital at $42 a share will bump up my average cost basis of $31 a share and I'm slightly overpaying, the stock makes up for this in my opinion with its quality. If Main Street Capital pulls back to $40 or less, I will be adding to my portfolio more aggressively. Otherwise, I'll nibble on the stock in the low $40s.

Concluding Thoughts:

Heading into November, I anticipate that my net annual forward dividends will be approximately $2,110.

I'm expecting that I will have right around $2,000 to invest in November 2021 including my selectively reinvested dividends, which could get me over the $2,175 mark in net annual forward dividends but not quite to $2,200 for the month.

Discussion:

Are any of JNJ, MAIN, or WEC on your watch list for next month?

If not, what stocks are you watching for November 2021?

As always, thanks for reading and I welcome your comments in the section below!

September 2021 Dividend Income

As I'm writing this blog post, the seasonally warm temperatures have continued into October here in Central Wisconsin. The next week of forecasts will see high temperatures range in the low to mid-70s Fahrenheit.

Since it's early October, it's time for me to go over my dividend income for September 2021. Because I received dividends a day early from Visa (V) and Wells Fargo (WFC) in my Webull account, those will appear to be in August despite official pay dates in September. Also of note, I had several dividends from Sept. 30 in my Robinhood account that I didn't receive until Oct. 1.

Analysis:

During the month of September 2021, I collected a record $229.54 in net dividends against the $197.54 in net dividends that were received in June 2021. This works out to a 16.2% quarterly growth rate.

The dividends that I collected in September 2021 also equate to a 64.6% year over year growth rate compared to the $139.46 in net dividends received in September 2020.

Delving deeper into the details, I collected $146.33 in net dividends from 33 companies in my Robinhood account during the month (as a result of the timing of Simon Property Group's dividend, as well as first-time dividends from KeyCorp, Pinnacle West Capital, and Essential Utilities). What's more, I received $70.00 in net dividends from the Capital Income Builder mutual fund (CAIBX) in my retirement account. I also collected $12.74 in net dividends from six companies in my Webull account. Finally, I received $0.47 in net dividends from 23 companies in my M1 Finance account.

The $32.00 increase in net dividends collected from June 2021 to September 2021 was the result of the following activity within my portfolios:

Starting within my retirement account, my net annual dividends received from CAIBX were $2.52 higher due to an increased share balance from my last few paycheck contributions at my day job before I started to write for Motley Fool and Seeking Alpha essentially full-time.

I also collected an additional $0.80 from WFC within my Robinhood and Webull accounts, which was due to the recent doubling of the stock's quarterly dividend.

My net dividends received from Simon Property Group (SPG) were $9.00 higher in my Robinhood account than in June because SPG's previous dividend was paid in July. SPG also increased its quarterly dividend recently.

I collected an extra $0.13 in net dividends from British Petroleum (BP) within my Robinhood account as a result of its dividend increase in August.

I also collected an additional $1.26 in net dividends from Dominion Energy (D) during the month within my Robinhood account, which was the result of my August 2021 dividend stock purchases.

My net dividends received from Royal Dutch Shell (RDS.B) in my Robinhood account were $1.20 higher, which was due to its 38.3% hike in its quarterly dividend.

I collected an extra $2.86 in net dividends from Viatris (VTRS) within my Robinhood account, which was the result of my July 2021 dividend stock purchases and August 2021 dividend stock purchases.

My net dividends received from KeyCorp (KEY) were $4.07 higher in my Robinhood account because it was the first dividend payment received from the stock, which was due to my July 2021 and August 2021 dividend stock purchases.

I collected an additional $1.48 in net dividends from American Electric Power (AEP) within my Robinhood account, which was the result of my June 2021 dividend stock purchases.

My net dividends received from Essential Utilities (WTRG) were $2.68 higher than in June because this was the first dividend from them in my Robinhood account, which was due to my July 2021 dividend stock purchases. 

I collected an extra $0.18 from J.M. Smucker (SJM) within my Robinhood account, which was the result of a 10% dividend increase in July.

My net dividends received from Pinnacle West Capital (PNW) were $5.81 higher than June because this was the first dividend from them in my Robinhood account, which was due to my July 2021 dividend stock purchases.

I collected an additional $0.01 from RDS.B within my M1 Finance account, which was due to the aforementioned dividend hike.

Concluding Thoughts:

I have collected over $1,218.20 in net dividends through September. And based on the fact that I'm expecting more than $500 in net dividends in the final three months of this year, I appear to be on track to meet my goal of collecting $1,800 in net dividends for 2021. With nearly $2,030 in net annual forward dividends heading into October, I also am on track to end this year with well over my goal of $2,200 in net annual forward dividends to start 2022.

With my capital contributions, dividend increases, and dividend reinvestment, I wouldn't be surprised if my net dividends were to surpass $250 in December of this year.

Discussion:

How was your dividend income in September?

Did you receive any first-time dividends during the month like I did from KEY, PNW, and WTRG?

As always, I'm grateful for your readership and look forward to your comments!

September 2021 Dividend Stock Purchases

As I'm writing this blog post, it's the last day of September. It's hard to believe, but there are only three months left in the year! Fall is here in Central Wisconsin, but you wouldn't know it based on the temperatures in the high-70s Fahrenheit today.

At any rate, it's time for me to discuss my capital deployment activity in September 2021 and the dividend stocks that I purchased for the month.

As I explained in my previous post of this series, it will be rare going forward that I discuss capital deployment within my employer-sponsored retirement account. That's because I stopped working there nearly three months ago to pursue writing on a near full-time basis with The Motley Fool and Seeking Alpha.

The only time I will be deploying capital in the account will be when dividends are paid and automatically reinvested to purchase more shares of the Capital Income Builder (CAIBX) mutual fund, which is what happened in September 2021.

The $70.00 in net dividends that I received during the month was reinvested into 1.018 shares of CAIBX, which should produce $2.17 in net annual forward dividends. This works out to a 3.10% net yield.

I started off September by first adding a share to my position in Altria Group (MO) at a cost of $50.91, which was just days after I wrote an article on the stock on Seeking Alpha discussing the recent 4.7% dividend increase.

MO isn't the flashiest stock, but its 7%+ dividend yield is supported by a sub-80% payout ratio and healthy fundamentals. That's why I added a share to my portfolio at a net yield of 7.07%, boosting my net annual forward dividends by $3.60 in the process.

The next stock that I purchased in September was VICI Properties (VICI), which was a new addition to my portfolio.

As I explained in a recent Motley Fool article on Realty Income (O) and VICI, there are a number of things that I like about the latter, such as its industry-leading weighted average lease term, 100% occupancy rate, and robust AFFO per share growth to support a safe and growing dividend.

That's why I added 21 shares of the stock to my portfolio at an average cost of $31.36 a share. Compared to the $30.24 in net annual forward dividends added from the purchase, this equates to a 4.59% net yield.

The other stock that I added to my portfolio in September was Bristol Myers Squibb (BMY), which is because outside of its top three drugs (Revlimid, Eliquis, and Opdivo) whose patents will all be expiring this decade, the company has a number of promising drugs in various stages of development.

The 10 shares of BMY that I added was at an average cost of $60.98 a share, which works out to a 3.21% net yield factoring in the $19.60 in net annual forward dividends that the purchases put in the portfolio.

I also added a share to my position in Lockheed Martin (LMT) at a cost of $339.82, which was just days before the stock announced a 7.7% increase in its quarterly dividend per share to $2.80.

As I explained in my dividend stock watch list post for September 2021, I planned on adding to my position in LMT because it is off to a great start this year, the balance sheet is strong, and the dividend is well covered.

Since I purchased before the dividend increase, my starting net yield was 3.06%. And with the dividend increase, my yield on cost is now 3.30%.

Since first opening a position in Visa (V) nearly two years ago, I added another share of the stock at a cost of $220.55.

With the global economic reopening playing out, V's low payout ratio, and top-notch balance sheet, I wanted to add to my position.

Compared to the $1.28 in net annual dividends that this purchase added to my portfolio, my net yield on this purchase was 0.58%.

Finally, I added a share to my position in Merck (MRK) at a cost of $71.85 a share.

The reason for adding to my position in MRK is that while its oncology segment led by Keytruda is important to the company, MRK is so much more than just oncology with its vaccines and animal health segments as I explained in a recent Motley Fool article.

Weighed against the $2.60 in net annual forward dividends that my purchase added to my portfolio, my net yield on the purchase was 3.62%.

Concluding Thoughts:

September 2021 was the third straight month in which I deployed over $2,000 in capital (when including the dividends received that I always selectively reinvest), which is having a remarkable impact on the growth of the portfolio's net annual forward dividends.

I invested $2,021.41 in September 2021, which added $69.89 in net annual forward dividends across the seven positions that I added to or initiated during the month. This works out to a respectable average weighted net yield of 3.46%, which is right around the 3.5% range that I want to be near going forward.

When also considering that dividend increases received during the month added $9.93 to my net annual forward dividends, my net annual forward dividends surged from approximately $1,950 to enter the month to nearly $2,030 heading into October.

And since I'm expecting that I'll deploy $2,700 in capital (including reinvested dividends) in October 2021, I should end up around $2,125 in net annual forward dividends by the end of the month.

Discussion:

How was your September for capital deployment?

Did you add any new positions to your portfolio during the month as I did with VICI and BMY?

As always, thanks for reading and I look forward to your comments in the comment section below!