Tuesday, March 23, 2021

Expected Dividend Increases for April 2021

As I'm writing this blog post, we have officially entered spring in Central Wisconsin and the weather is really starting to reflect this development. We've reached the upper 50s Fahrenheit and the vast majority of the snow cover has once again melted just days after our previous (and hopefully final snowfall). 

With that aside, I will be discussing the dividend increases that I received in March, as well as the dividend increases that I am anticipating in April.

March Dividend Increases

Dividend Increase #1: W.P. Carey (WPC)

As a testament to the quality of W.P. Carey (WPC) as a business, WPC once again delivered a dividend increase that was in line with my expectations of 0.2%, outlined in my previous blog post of this series. WPC increased its quarterly dividend 0.2%, from $1.046/share to $1.048/share. 

Across my 7 shares of WPC, my net annual forward dividends increased $0.056 as a result of WPC's recent dividend increase.

Dividend Increase #2: Realty Income (O)

Another high-quality REIT that delivered a dividend increase in line with my expectations was Realty Income (O). O announced a 0.2% increase in its monthly dividend, from $0.2345/share to $0.2350/share.

My net annual forward dividends increased $0.054 due to O's dividend increase across my 9 shares.

Dividend Increase #3: General Dynamics (GD)

Moving to yet another Dividend Aristocrat, General Dynamics (GD) announced an 8.2% increase to its quarterly dividend, taking it from $1.10/share to $1.19/share. This was slightly ahead of my expectation of a 7.3% increase in its quarterly dividend to $1.18/share, which was a pleasant surprise.

Across my 3 shares of GD, my net annual forward dividends were boosted by $1.08 as a result of GD's dividend increase.

Dividend Increase #4: Williams Sonoma (WSM)

Last but certainly not least, Williams Sonoma (WSM) announced a whopping 11.3% increase to its quarterly dividend, from $0.53/share to $0.59/share.

Because WSM announced a delayed dividend increase in 2020, I didn't expect that the company would resume its pre-COVID dividend increase schedule of March. Of course, I was thrilled when I saw the news that WSM delivered a huge dividend increase for its shareholders and initiated a $1 billion share repurchase program.

My net annual forward dividends surged $2.16 across my 9 shares of WSM due to its dividend increase.

April Dividend Increases

Expected Increase #1: Johnson & Johnson (JNJ)

As was recently pointed out by SD Growth in the comment section of Bert of Dividend Diplomat's recent post on why he and his wife are going to be purchasing Johnson & Johnson (JNJ) each week this year, JNJ has a history of not only raising its dividend each year dating back to the Kennedy administration, but the only year they didn't raise their dividend in excess of inflation during that time was when inflation was 13.5% in 1980!

Since the inflation rate is primed to remain in the 2-3% range this year and I am expecting JNJ to announce a 6.9% increase in its quarterly dividend next month, from $1.01/share to $1.08/share, JNJ is positioned to deliver yet another year of inflation beating dividend growth.

Should this dividend increase play out as I expect, my net annual forward dividends would be boosted by $0.84 across my 3 shares of JNJ.

Expected Increase #2: Southern (SO)

Yet another business that I believe will deliver a dividend increase in excess of inflation this year, is Southern (SO).

I am forecasting a 3.1% increase in SO's quarterly dividend, from $0.64/share to $0.66/share.

Across my 5 shares of SO, my net annual forward dividends would increase $0.40 if SO delivers the dividend increase that I am expecting.

Expected Increase #3: International Business Machines (IBM)

I'm also expecting a dividend increase from the Dividend Aristocrat, International Business Machines (IBM) in April. 

I believe that IBM will be announcing a 3.7% increase in its quarterly dividend, from $1.63/share to $1.69/share.

This dividend increase, should it materialize, would result in a $0.96 boost to my net annual forward dividends across my 4 shares.

Expected Increase #4: Exxon Mobil (XOM)

Since WTI crude's $58 YTD average in 2021 is on pace to average its best year in terms of average closing price since 2018's $65 average and Exxon Mobil (XOM) is required to raise its dividend this year to maintain its status as a Dividend Aristocrat, I believe it is highly likely that XOM will deliver a dividend increase for its shareholders.

It's hard to really know how large of a dividend increase XOM will announce, but I am forecasting that it will be a conservative increase such as a 3.4% increase to its quarterly dividend, from $0.87/share to $0.90/share to conserve capital for investment.

Should this dividend increase materialize, my net annual forward dividends would be boosted by $1.32 due to the 11 shares of XOM that I own.

Expected Increase #5: Enterprise Products Partners (EPD)

The final distribution increase that I am expecting in April is from Enterprise Products Partners (EPD).

In light of the stabilizing commodity environment and EPD's further improving operating fundamentals as a result, I am anticipating that EPD will resume its prior practice of raising its distribution on a quarterly basis just as it did for 62 consecutive quarters prior to COVID-19 being classified as a pandemic.

Therefore, I predict that EPD will announce a 0.6% increase in its quarterly distribution from $0.45/unit to $0.4525/unit.

Across my 33 units of EPD, this distribution increase would result in a $0.33 increase in my net annual forward distributions.

Concluding Thoughts:

While not as strong as the $4.78 in net annual forward dividend increases that I received from 7 stocks in February, March was still a solid month, with 5 stocks announcing a total of $3.35 in net annual forward dividend increases.

At a 4% yield, it would take $83.75 in capital deployment to replicate the increase in net annual forward dividends during March.

Should April's dividend announcements play out as I expect, I would receive $3.85 in net annual dividend increases from 5 stocks, which would be equivalent to investing $96.25 at a 4% yield.


How was your March in terms of dividend increases?

Did your portfolio benefit from any solid dividend increases as mine did in the case of GD and WSM?

Thanks for reading and I look forward to your comments in the comment section below!

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