Expected Dividend Increases for January 2022

As I'm writing this blog post, only about a week remains in the year. Despite the calendar officially turning to winter here in Central Wisconsin, the weather still isn't too bad with highs in the upper 30s Fahrenheit. At this rate, we may be getting snow in May or June to make up for the fact we haven't had consistent snow cover yet this season!

With that aside, let's delve into what turned out to be my strongest month of dividend increases to date by far in my four-plus years of investing!

Actual Dividend Increases for December 2021

Dividend Increase #1: WEC Energy Group (WEC)

The first dividend increase that was announced in December was from WEC Energy Group, which was the first I have received from the stock. WEC announced a 7.4% increase in its quarterly dividend from $0.6775 to $0.7275 per share. This was slightly above my expectations of a 6.3% increase in the quarterly dividend to $0.72 per share. I believe this will be the first of many more strong dividend increases in the future from this wonderful utility based in my home state.

Across my seven shares, my net annual forward dividends surged $1.40 higher due to WEC's dividend hike.

Dividend Increase #2: Eastman Chemical (EMN)

The next dividend increase declared in December came from Eastman Chemical. EMN upped its quarterly dividend by 10.1% from $0.69 to $0.76 per share. This was well above my projection for a 7.2% increase in the quarterly dividend to $0.74 per share, which I'll gladly take from this excellent stock.

My net annual forward dividends were boosted $1.12 across my four shares of EMN as a result of its dividend raise.

Dividend Increase #3: Amgen (AMGN)

The third dividend boost announced in December was from Amgen. AMGN declared a 10.2% increase in its quarterly dividend from $1.76 to $1.94 per share. Once again, this came in ahead of my forecast for an 8% bump in the quarterly dividend to $1.90 per share. This is why it literally pays to be a dividend growth investor, especially with the raises this year. These kinds of raises will easily combat the four decade high in inflation.

Across my four shares, my net annual forward dividends skyrocketed $2.88 higher due to AMGN's dividend hike.

Dividend Increase #4: W.P. Carey (WPC)

The next dividend increase that I received in December came from W.P. Carey. WPC announced a 0.3% increase in its quarterly dividend from $1.052 to $1.055 per share. This was more than the 0.2% bump in its quarterly dividend that I was expecting to $1.054 per share.

My net annual forward dividends inched $0.084 upward as a result of WPC's dividend increase across my seven shares of the stock.

Dividend Increase #5: CVS Health (CVS)

The fifth dividend increase of December from CVS Health came as a bit of a surprise. I was anticipating that the company wouldn't increase its dividend until the end of next year. But based on CVS's tremendous deleveraging progress to this point, it could afford the 10% hike in its quarterly dividend from $0.50 to $0.55 per share.

Interestingly, this is actually the first dividend increase that I have received since I purchased the stock. That's because CVS Health has been focusing for years on repaying the debt related to its acquisition of the health insurer Aetna.

Across my seven shares, my net annual forward dividends were boosted by $1.40 due to the dividend increase from CVS.

Dividend Increase #6: Broadcom (AVGO)

Another dividend increase that I received in December came from Broadcom. AVGO declared a 13.9% hike in its quarterly dividend from $3.60 to $4.10 per share. This was once again moderately higher than the 11.1% increase to $4 per share that I was anticipating. I'm very glad that I built up my position in AVGO during the COVID crash in March.

My net annual forward dividends soared $6 higher across my three shares of the stock as a result of AVGO's dividend hike.

Dividend Increase #7: Pfizer (PFE)

The seventh dividend increase in my portfolio that was announced in December was from Pfizer. PFE announced a 2.6% increase in its quarterly dividend from $0.39 to $0.40 per share. While this came up well short of the 10.3% raise that I was expecting from the stock, I don't blame them for being conservative. But I would have liked to see more from PFE in light of its leading position in the COVID-19 vaccine industry. At least the dividend is extremely safe with its payout being so low, which leaves room for bigger raises in the future.

Across my 17 shares, my net annual forward dividends inched up $0.68 due to PFE's dividend raise.

Dividend Increase #8: Abbott Laboratories (ABT)

The next dividend increase that was declared in December came from Abbott Laboratories. ABT increased its quarterly dividend 4.4% from $0.45 to $0.47 per share, which came in below my forecast of an 8.9% increase in the dividend. But like the raise from PFE, I can't fault a company for being cautious with dividend increases. This is especially the case after ABT's 25% raise last year before I became a shareholder. Being diligent with the payout ratio is exactly what will allow ABT to become a newly minted Dividend King by the end of next year.

My net annual forward dividends edged $0.48 higher across my six shares as a result of ABT's dividend increase.

Dividend Increase #9: Bristol Myers Squibb (BMY)

The ninth dividend hike that I received in December was from Bristol Myers Squibb. BMY announced a 10.2% hike to its quarterly dividend from $0.49 to $0.54 per share. This was a bit higher than the 8.2% increase that I predicted, which the stock can easily afford with its low payout ratio.

Across my 10 shares, my net annual forward dividends shot up $2 due to BMY's dividend raise.

Dividend Increase #10: Dominion Energy (D)

The next dividend increase that was announced in December came from Dominion Energy. D declared a 6% increase in its quarterly dividend from $0.63 to $0.6675 per share, which was just a bit below the 6.3% increase that I was expecting.

My net annual forward dividends were boosted by $0.90 across my six shares as a result of D's dividend raise.

Dividend Increase #11: Realty Income (O)

The eleventh payout increase that was announced in December was from Realty Income. O declared a 0.2% increase in its monthly dividend from $0.2460 to $0.2465 per share. This was exactly what I projected, which is what I love about this Dividend Aristocrat!

Across my 13 shares, my net annual forward dividends inched up by $0.078 due to O's dividend increase.

Dividend Increase #12: American Tower (AMT)

The final dividend increase declared in December came from American Tower. AMT announced a 6.1% hike in its quarterly dividend from $1.31 to $1.39 a share. This easily beat my expectation of $1.37 per share. A 6% increase in a year would be pretty solid itself. But what makes AMT really impressive is that it raises its dividend each quarter. Talk about dividend growth!

My net annual forward dividends were boosted by $0.96 across my three shares as a result of AMT's dividend increase.

Expected Dividend Increases for January 2022

Expected Dividend Increase #1: Realty Income (O)

O is really making the appearances in this series lately with its whopping 4.2% increase in its dividend in November and the slight increase last month. And with another 0.2% increase in its monthly dividend to $0.2470 per share likely to be announced next month, the stock will have raised its dividend for three straight months if it announces an increase in January.

Across my 13 shares of the stock, this would be a $0.078 increase in my net annual forward dividends.

Expected Dividend Increase #2: BlackRock (BLK)

The next stock that I anticipate will up its quarterly dividend next month is BlackRock. Given that analysts are expecting BLK's earnings per share to increase 8.9% to $42.22 next year, I am projecting that BLK will announce a 9.9% raise in its quarterly dividend from $4.13 to $4.54 per share.

If this announcement were to occur, my net annual forward dividends would be lifted by $1.64 across my single share of the stock.

Expected Dividend Increase #3: Kimberly Clark (KMB)

The third stock that I believe will declare a dividend increase next month is Kimberly Clark. Because KMB's EPS is forecasted to grow 9.6% next year to $6.75, I believe that the stock will announce a decent increase to its quarterly dividend. I'm expecting that KMB will raise its quarterly dividend by 5.3% from $1.14 to $1.20 per share.

Across my four shares of the stock, this would boost my net annual forward dividends by $0.96.

Expected Dividend Increase #4: Alliant Energy (LNT)

The final stock that should raise its dividend next month is Alliant Energy. Since LNT is targeting paying out $1.71 in dividends for next year, this won't count as a prediction on my part. This implies that LNT will raise its quarterly dividend by 6.2% from $0.4025 to $0.4275 per share. The company's Board of Directors has already approved the raise, so it's now just a matter of waiting for the actual announcement date.

This will be a $1.30 gain in my net annual forward dividends across my 13 shares of the stock.

Concluding Thoughts:

December was a great way to cap off a year of robust dividend increases. For the month, I received $17.982 in dividend raises. This would require $513.77 in capital investment at a 3.5% yield to replicate!

On the base of dividends that I was receiving from the 12 stocks that went on to raise their dividends this month, the weighted average raise was a solid 6.6%. Given that WPC, O, and AMT raise their dividends each quarter, the annualized raise from these dozen stocks would be even higher taking that fact into consideration. Even in a very inflationary period like the one we're seeing now, my portfolio is managing to stay ahead of inflation.

While I'm only expecting four raises next month, my net annual forward dividends would grow by $3.978 if these dividend announcements play out as expected. 

Overall, my dividend growth portfolio is starting to pick up steam as it rolls down the hill of compounding. I'm very much looking forward to the next year to see just how high my dividends will go!

Discussion:

How was your December 2021 for dividend increases?

Did you receive any first-time dividend increases like I did with WEC, CVS, ABT, and BMY?

Thanks for reading and please feel free to leave your thoughts in the comment section!

My Financial & Personal Goals for 2022

Since there are only two weeks left in this year at the time of writing, there's no better time than now to look ahead to the next year and set goals.

Without further ado, here are my financial and personal goals for 2022.

                      Image Source: Pexels

My Financial Goals for 2022

1. Receive at least $2,700 in net dividends

My first financial goal for 2022 is to collect at least $2,700 in net dividends next year, which I believe is realistic. That's because I am on track to receive close to $1,800 in net dividends this year. My net dividends would only need to grow just under $900 to reach this figure, which works out to investing approximately $27,000 at an average weighted yield of 3.25%, not considering dividend increases.

2. End the year with net annual forward dividends of at least $3,200

The second financial goal that I have is to end next year with net annual forward dividends of at least $3,200. Given that I'll be heading into next year with $2,300 in net annual forward dividends, this would again require roughly $28,000 in investments at a 3.25% yield. This strikes a good balance between being both a lofty and a doable goal.

3. Surpass $100,000 in investments and a net worth of at least $110,000

The final financial goal that I have for 2022 is to end the year with over $100,000 in investments and a net worth of at least $110,000. Since my investments are currently worth $68,000 and I anticipate that I will invest nearly $30,000 next year (including selective dividend reinvestment), my holdings would only need to appreciate about 4% in the next 12 months. This seems pretty reasonable in my opinion. And because I generally have $1,500 in savings and checking and a vehicle worth around $11,000, getting to $100,000 in investments would give me a clear path to $110,000 in net worth by the end of next year.

My Personal Goals for 2022

1. Publish at least 300 articles for Motley Fool

The first personal goal that I have for next year is to publish at least 300 articles over at The Motley Fool. This builds in the equivalent of two weeks of vacation each year as long as I get at least 6 articles a week published the other 50 weeks of the year, which I have been doing for months now.

My reasoning for aiming to publish this many articles over at The Motley Fool is two fold. Financially, it should allow me to hit my goals for next year and helps me to make considerable progress in achieving financial independence by age 35, which is a long-term goal of mine. Secondly, it's a nice balance between work and relaxation. That's because this workload at TMF, along with doing 1 Seeking Alpha article and 1 blog post each week, equates to approximately 35 hours a week of work.

2. Publish 1 Seeking Alpha article each week

Consistent with my sentiment above, I am going to stick with publishing 1 Seeking Alpha article a week. I believe this overall workload gets me to financial independence reasonably fast, while also giving me enough free time each week to recharge.

3. Publish 1 blog post every week

Finally, my third goal is to continue publishing 1 blog post a week for the same reasons I outlined above.

Concluding Thoughts:

While 2021 isn't quite over yet, I'm projecting that I will likely have achieved at least four out of my six goals for the year. Stay tuned for my blog post next week where I will detail my goals that I achieved and failed for this year.

Next year will be yet another exciting year in that it will be my first full year with TMF since I didn't quit my day job until this past July. Thus far, my earnings have been moderately higher at TMF than they would have been at my day job, while I'm also working less and avoiding a couple of hours each week that would have been spent commuting to and from work. 

Financially, I stand a good chance of reaching the milestone of $100,000 in investments next year. As Berkshire Hathaway's Vice Chairman Charlie Munger put it: "The first $100,000 is a bitch." With the passage of time, my dividend stock portfolio is growing bigger and beginning to produce meaningful results. It's my hope that in 10-15 years, my portfolio will be working nearly as hard as I have been in securing the capital to build it over the years. Next year will be yet another chance to take another step closer toward making that dream a reality. 

I'm so glad that I live in one of the few countries in the history of the world with the conditions that have allowed me to achieve what I have thus far financially. God bless the U.S.A.

Discussion:

What are your goals for next year?

Out of all of your goals, do you anticipate any will be more difficult than your others to attain?

I appreciate your readership and encourage you to leave comments in the section below. Also, I wish you the best of luck in reaching your goals next year!

January 2022 Dividend Stock Watch List

As I'm writing this blog post, it's already mid-December. Surprisingly, we're in for a beautiful couple of days with temperatures topping out in the upper-50s Fahrenheit here in Central Wisconsin.

With that aside, I'm going to dive into three of the top stocks on my watch list heading into the New Year.

Image Source: Pexels

Dividend Stock #1: 3M (MMM)

The first stock that I'm watching for next month is the Dividend King 3M. While I own 3M indirectly through my Capital Income Builder (CAIBX) mutual fund and a fractional share through M1 Finance, I don't yet actually own whole shares of the stock. There are a few reasons why I'm watching this stock for next month.

The first reason is because 3M is a diversified industrial. Since the company is balanced across a variety of healthcare industries like healthcare, electronics, and manufacturing, it should do well no matter what's going on in the world. 

This is why analysts are expecting 3M to deliver 8% annual earnings growth over the next five years. Such growth should allow for mid-single-digit dividend growth over the foreseeable future given that the stock's payout ratio for this year will be around 60%.

It also doesn't hurt that the company's interest coverage ratio through the first nine months of this year was 17.3. This suggests 3M is on solid financial footing, which will undoubtedly help me sleep at night owning the stock.

3M's overall quality with a 3.4% dividend yield at just 17 times next year's average analyst sets long-term investors up for success in my opinion, which is why I like the stock at its current $175 share price (as of December 13, 2021).

Dividend Stock #2: Union Pacific (UNP)

The next dividend stock that I'll likely be buying in January 2022 is the railroad titan Union Pacific.

Ever wonder just how what you buy actually ends up getting to a store near you? Well, after semi trucks, railroads are the next biggest means of transportation. This logistical option recently accounted for 28% of total U.S. freight movement by ton miles. In other words, railroads play a major role in the 57 tons of goods per American that are delivered each year!

What makes Union Pacific such a great railroad play?

The stock's more than 30,000 miles of track cover the western two-thirds of the United States, which makes it the major player in most parts of the country alongside Berkshire Hathaway (BRK.B) owned BNSF Railway.

The continued need for railroads to play a major role in the U.S. economy explains why analysts are forecasting that Union Pacific will grow its adjusted diluted EPS by 16.5% annually over the next five years.

That's likely why Union Pacific announced its second dividend increase of the year, which was 10.3% to boot. Looking ahead to next year, the stock's dividend payout ratio will only be 41.5% (assuming that total dividends paid next year are raised 10% to $4.72 divided by $11.36 adjusted diluted EPS average analyst estimate). This leaves plenty of room for Union Pacific's dividend to keep growing.

And given that Union Pacific's yield is currently 1.9% at its share price of $246 (as of December 13, 2021), the stock offers a market-beating yield that should grow at a double-digit clip for years to come.

Finally, the stock is trading at just under 22 times next year's earnings. This is a reasonable price to pay for Union Pacific's quality in my book.

Dividend Stock #3: Allstate (ALL)

The final dividend stock on my watch list for next month is the property and casualty insurer Allstate, which was the fifth largest P&C insurer last year as measured by direct premiums written. The company wrote a whopping $34.3 billion in premiums last year.

In a modern society such as ours, it's important for individuals to protect possessions like homes, cars, and rental properties. Allstate's business is to take on that risk for individuals at a price that adequately rewards the company for doing so. 

Because its industry is likely to steadily grow in the years ahead due to the essential nature, Allstate stands to benefit quite a bit. Even without considering the strong likelihood of interest rate hikes next year (which would raise Allstate's investment income on its $61.8 billion investment portfolio per page 5 of Allstate's Q3 2021 earnings press release), the company should do well in the years ahead.

The stock also boasts a 3% yield that is well-covered (yield based on $107 share price as of December 13, 2021). Since Allstate trades at just 10 times next year's average analyst EPS estimate, I believe the stock is a solid buy at this time.

Concluding Thoughts:

I'm expecting that I should once again have a bit more than $2,000 of capital at my disposal next month, which will allow me to put more money to work in some of the best businesses in the world.

Throughout much of this year, there has been an interesting development in my portfolio. That development is that I am focusing less on yield and more on quality stocks that grow their dividends at rather high rates. As my dividend income has grown over the years, I have come to appreciate less spectacular yields with incredible dividend growth rates. UNP and ALL perfectly fit into that category of strong dividend growth, while MMM's dividend growth has decelerated in recent years (though I don't believe that will be the case for much longer).

Discussion:

Are any of MMM, UNP, or ALL on your watch list for the month?

If not, what stocks are you watching for January 2022?

Thanks for reading and I look forward to your comments below!

November 2021 Dividend Stock Purchases

As I'm writing this blog post, it's early December. It's hard to believe that less than four weeks are left to this year. But despite the official start of winter being just a couple of weeks away, it has been quite nice here in Central Wisconsin with high temperatures in the mid-30s Fahrenheit.

At any rate, the beginning of a new month is a time for me to look back at the previous month of dividend stock purchases that I executed for my dividend growth portfolio. Let's dig in!

I started off the month by adding two shares to my position in Raytheon Technologies (RTX), which was executed at an average price of $88.55 a share. I added to this holding in my portfolio for the same reasons that the stock was on my watch list in October, which was due to its fair balance sheet, recovering aerospace business, and low payout ratio. These transactions added $4.08 in net annual forward dividends to my portfolio, which works out to a 2.30% dividend yield.

The next stock that I increased my position in during November was WEC Energy Group (WEC), which I purchased a single share of at a cost of $88.80. That's because the stock is one of the smartest stocks investors can buy in light of the company's reasonable payout ratio, mid-single-digit annual earnings growth, and fair valuation. This buy added $2.71 in net annual forward dividends to my portfolio, which equates to a 3.05% yield.

The third stock that I upped my stake in last month was the Dividend King Johnson & Johnson (JNJ), which was a lone share at a price of $165.03. Johnson & Johnson recently raised its earnings guidance for this year, it's the only company alongside Microsoft (MSFT) to possess an unblemished credit rating, and despite these characteristics, the stock trades at a P/E ratio in the mid-teens. Considering that this purchase boosted my net annual forward dividends by $4.24, I was able to secure a 2.57% starting yield on this share of stock.

I also added four shares to my position in the business development company Main Street Capital (MAIN) at an average cost of $45.69 a share. The basic reasoning for this was that MAIN is arguably the best run business in its industry, which is supported by its diversified investment portfolio, its investment-grade credit rating, and solid net asset value per share growth. These transactions advanced my net annual forward dividends by $10.32, which works out to a 5.65% yield.

I increased my stake in Omnicom (OMC) by two shares at an average price of $68.78 per share. My rationale for doing so remains unchanged from when OMC appeared on my watch list for October, which is that the company is rebounding from COVID, the balance sheet is decent, and the stock is attractively valued. These buys added $5.60 to my net annual forward dividends, which equates to a 4.07% yield.

The first stock that I opened a position in during the month was the semiconductor Texas Instruments (TXN), which was really because I wanted another semiconductor in my portfolio alongside Broadcom (AVGO). TXN is a solid dividend growth stock with a great track record, which is why I purchased three shares of the stock at an average cost per share of $189.19. These transactions boosted my net annual forward dividends by $13.80, which is a 2.43% net yield.

The second stock that I began a stake in last month was the communications infrastructure REIT Crown Castle (CCI), which is because I wanted a high-quality company to play the megatrend of growing data consumption. CCI isn't cheap, but it also isn't unreasonably expensive. That's why I added three shares of the stock to my portfolio at an average price per share of $182.57. These purchases increased my net annual forward dividends by $17.64, which works out to a 3.22% yield. 

The final stock that I opened a position in during the month was American Water Works (AWK). I outlined the reasons for why I want to own the stock in my December 2021 dividend stock watch list post, which include the incredibly low payout ratio for a water utility, above-average growth prospects, and a firmly investment-grade credit rating. I bought three shares of the stock at an average cost of $172.23 a share and plan to add more in the near future. These buys added $7.23 to my portfolio's net annual forward dividends, which equates to a 1.40% yield.

I added a share to my position in Cummins (CMI) at a cost of $219.20. I would advise those interested in my rationale to check out my recent Seeking Alpha article on the stock. This transaction boosted my net annual forward dividends by $5.80, which works out to a 2.65% yield.

For the first time in nearly three years, I made the decision to sell a stock I had purchased a couple of years prior. That stock was the private prison operator GEO Group (GEO), which slashed its dividend a couple of times before ultimately suspending its dividend earlier this year. This was a classic case of a dividend yield that was too good to be true, which was in the low-double digits when I made my initial purchases in August 2019. It was a transaction I should have never executed in hindsight, but live and learn.

This transaction is what allowed me to add two shares of British American Tobacco (BTI) to my Webull portfolio at an average price per share of $34.07. Given the $5.94 in net annual forward dividends added to my portfolio, this works out to an 8.72% yield.

Concluding Thoughts:

I deployed $2,670.53 in capital last month (including the $132.68 in funds raised from the sale of GEO within my Robinhood and Webull accounts). This is the fifth straight month that I deployed over $2,000 in capital. Considering the $77.36 in net annual forward dividends that I added to my portfolio during the month via purchases, this equates to a 2.90% net yield.

When also adding in the $11.92 increase in net annual forward dividends via dividend increases, my net annual forward dividends have advanced from over $2,115 at the start of November to more than $2,205 heading into December.

Discussion:

How was your November 2021 for capital deployment?

Did you open any new positions in your portfolio like I did with AWK, CCI, and TXN?

As always, thanks for reading and I look forward to reading your comments below!