Tuesday, January 21, 2020

Expected Dividend Increases for February 2020

As I write this, the Green Bay Packers are a couple days removed from their 37-20 loss to the San Francisco 49ers in the NFC Championship Game. As I had indicated in my November 2019 Dividend Stock Purchases post last month and last year (it still feels a bit weird to think that 2019 was last year), I didn't believe the Packers would advance past the NFC Championship Game, and I was unfortunately proven correct.

On the upside, the Bucks are continuing to prove in my mind why they are the odds on favorite to win the NBA championship. The Bucks took care of business against the Chicago Bulls on MLK Day at Fiserv Forum just as everyone expected, winning 111-98. Milwaukee's net rating of 12.0 means the Bucks are on track to post the best net rating in history while also unsurprisingly being on pace for 71 wins this season (after an impressive 39-6 thus far), the latter of which would make them only the third team in NBA history to do so.

Aside from the typical sports talk, the intent of this blog post is to recap the dividend increases that I have received in January, and to also predict the dividend increases for next month.

Admittedly, I am writing this post on the very day that I plan to publish it because I made it a point to relax this weekend, and my OCD-like tendencies otherwise prohibit me from not publishing my 79th consecutive Tuesday blog post. A blog post on a Wednesday? No way!

Anyway, with that all out of the way, let's delve into the dividend increases that I have been fortunate enough to receive to date in the month of January and what I'm expecting for February!

Increase #1: Realty Income (O)

True to form, Realty Income (O) announced another predictable dividend increase during the month of January roughly in line with my prediction outlined in my previous post in the series. O increased its monthly dividend 2.2%, from $0.2275/share to $0.2325/share. With another 4 small raises likely to come this throughout the rest of this year, O offers dividend growth that exceeds inflation. It's both fortunate and unfortunate that the company is viewed as a safe haven by so many other individual and institutional investors because I'd love to buy more of this company, but the valuation has become too rich for my liking over the past number of months.

Across my 4 shares, O's new dividend announcement boosted my annual forward dividends by $0.24.

Increase #2: Enterprise Products Partners (EPD)

As yet another steady dividend (or distribution rather) grower in my portfolio, Enterprise Products Partners (EPD) didn't disappoint. EPD raised its quarterly distribution for the 62nd time, with its quarterly distribution increasing 0.6%, from $0.4425/unit to $0.4450/unit.

Given my 27 units of EPD at the time of the new distribution announcement, my annual forward distributions increased $0.27.

Increase #3: Magellan Midstream Partners (MMP)

As Magellan Midstream Partners (MMP) has done for the past couple of distribution increases, it has completely eluded my radar. I was about to write that I hadn't yet received an increase from MMP, but in a surprising twist, I just learned that the company increased its distribution today rather than the announcement later this week that I was expecting based upon previous distribution history.

Just as expected, MMP announced a 0.7% increase in its quarterly distribution, up from $1.0200/unit to $1.0275/unit.

Across the 7 units of MMP that I own, this distribution announcement padded my annual forward distributions by $0.21.

Expected Dividend Increases for February 2020

Expected Increase #1: Digital Realty Trust (DLR)

Given Digital Realty Trust's (DLR) past dividend increases, I am predicting that the company will announce a status-quoesque 6.5% increase in its quarterly dividend from $1.08/share to $1.15/share.

With my 3 shares, this would boost my annual forward dividend income by $0.84.

Expected Increase #2: PPL Corp (PPL)

Given the uncertain nature of what the outcome will be with Brexit and PPL Corp's (PPL) exposure to that market, I wouldn't be surprised if we see another dividend increase that is fairly similar to the one last year.
It's for that reason, I am predicting that PPL will announce a 1.2% increase in its dividend, taking the quarterly dividend from $0.4125/share to $0.4175/share.

Across my 8 shares of PPL, this would increase my annual forward dividends by $0.16.

Expected Increase #3: The Home Depot (HD)

While I don't expect The Home Depot (HD) to repeat its absolutely monstrous 32% increase in its quarterly dividend from last year, I am expecting the company to increase its quarterly dividend from $1.36/share to $1.56/share.

This would add $0.80 to my annual forward dividend income as a result of the single share that I own.

Expected Increase #4: Genuine Parts Company (GPC)

As a relatively predictable dividend growth company, I am expecting Genuine Parts Company (GPC) to continue its trend of increasing its quarterly dividend in the 5-7% range.
I believe GPC will increase its quarterly dividend 6.2% from $0.7625/share to $0.8100/share.

Assuming this occurs, my annual forward dividend income would increase by $0.57 across my 3 shares.

Expected Increase #5: Prudential Financial (PRU)

Even though Prudential Financial (PRU) could afford to increase its dividend a good bit more than its earnings growth, I'm expecting PRU's dividend growth to decelerate a slight bit compared to the 11.1% last year.

I'm predicting that PRU's quarterly dividend will be increased from $1.00/share to $1.09/share.

Given that I own 3 shares of PRU, this would boost my annual forward dividends by $1.08.

Expected Increase #6: Albemarle (ALB)

Albemarle (ALB) is another dividend growth company in my portfolio that I predict will deliver high-single digit to low-double digit dividend growth this year.

I'm expecting an 8.2% increase in its quarterly dividend from $0.3675/share to $0.3975/share, which would result in an additional $0.60 in annual forward dividends for my portfolio given my 5 shares of ALB.

Expected Increase #7: Simon Property Group (SPG)

Given that Simon Property Group (SPG) has a recent history of increasing its quarterly dividend twice per year by $0.05 (late January to early February and late July to early August), I believe SPG will continue that trend in February.

A 2.4% increase in SPG's quarterly dividend from $2.10/share to $2.15/share would boost my annual forward dividends by $0.60.

Concluding Thoughts:

January may not have brought the most dividend/distribution increases in terms of volume or percentages, but it seems like the beginning month of every quarter brings with it a nice level of consistency pertaining to dividend and distribution increases.

All 3 companies that announced increases during January are among the most consistent in my portfolio, with quarterly dividend/distribution increases coming in at or near my estimates every time.

The $0.72 in annual forward dividend/distribution increases that I received during the month of January would require an investment of $18.00 at a 4% yield to replicate.

I expect to benefit from 7 dividend increases during the month of February, with 4 holdings expected to increase their dividends for the first time since I have initiated positions in them (DLR, PRU, ALB, and SPG).

Depending on the outcome of the dividend increases that I expect next month, February 2020 could go down as my new record in terms of the dollar amount of dividend increases in a single month!

For a comprehensive discussion that summarizes several of the reasons that steered me in the direction of dividend investing in the first place and how to eventually live off of dividends, I would refer interested readers to this post by Tom of Dividends Diversify.


How many dividend increases are you expecting for the month of February? Are you expecting any dividend increases for the first time since you initiated your new positions?

As always, thank you for taking the time to read the dividend increases that I received during the month of January and what dividend increases I am expecting to receive in February.

I look forward to any comments that you may leave in the comment section below.

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