As I'm writing this blog post, Labor Day or the unofficial end of summer is less than two weeks away.
Even though the summer heat will soon disappear, the dividend increases in my portfolio are just starting to heat up. In this post, I'll discuss the five dividend increases that I received in August and look ahead to the 10 (yes, 10!) dividend increases that I am expecting in September.
Actual August 2021 Dividend Increases
Dividend Increase #1: British Petroleum (BP)
The first dividend increase that I received in August was from British Petroleum.
While the cut to the quarterly dividend last year as a result of COVID still stings a bit, BP's 4% dividend increase from a quarterly dividend of $0.315/share to $0.3276/share is a start in restoring the dividend to its pre-cut level of $0.625/share.
With WTI crude's year-to-date average of $64/barrel up 62% from last year's average just below $40, BP's dividend is much better covered now than it was leading up to the dividend cut.
Across my 11 shares of the stock, my net annual forward dividends increased $0.554 as a result of the dividend increase.
Dividend Increase #2: Simon Property Group (SPG)
After slashing its quarterly dividend 38.1% from $2.10/share to $1.30/share in June 2020 to preserve liquidity in the first few months of the COVID pandemic, Simon Property Group announced a 7.7% increase to $1.40 just this June.
As a result of Americans getting vaccinated and more foot traffic to its malls, SPG increased its dividend for the second time this year in August by 7.1% from $1.40/share to $1.50/share. I'm very pleased that SPG is taking steps to restore its dividend to its pre-COVID state.
My net annual forward dividends surged $2.40 across my six shares due to the dividend increase.
Dividend Increase #3: Main Street Capital (MAIN)
The third company to increase its dividend during August was Main Street Capital.
Improving operating fundamentals led MAIN to increase its monthly dividend 2.4% from $0.205/share to $0.21/share.
Across my 16 shares of the stock, my net annual forward dividends rose by $0.96 from its dividend increase.
Dividend Increase #4: Williams-Sonoma (WSM)
The fourth dividend increase of August was one that completely took me by surprise, which was Williams-Sonoma's massive 20.3% increase in its quarterly dividend from $0.59/share to $0.71/share. The stock already increased its quarterly dividend 11.3% from $0.53/share to $0.59/share this March.
Buoyed by three major tailwinds in the foreseeable future, Williams-Sonoma crushed analysts' revenue and earnings estimates.
As my largest winner (up about 340% as of August 26, 2021 before dividends), I am thrilled by the massive capital appreciation and 82% increase to its quarterly dividend since I purchased shares.
This company is the very essence of dividend growth investing and I'm fortunate that it is one of the largest positions in my portfolio.
My net annual forward dividends soared by $4.32 across my nine shares of the stock as a result of the dividend increase.
Dividend Increase #5: Altria Group (MO)
The fifth dividend increase that I received in August was from Altria Group.
MO announced a 4.7% increase in its quarterly dividend from $0.86/share to $0.90/share, which was in line with my prediction that I outlined in my previous post of this series.
Across my 17 shares of MO, my net annual forward dividends advanced by $2.72 due to the dividend increase.
Expected Dividend Increases for September 2021
Dividend Increase #1: Realty Income (O)
The first dividend increase that I'm expecting for September is from one of the steadiest companies in my portfolio, which is Dividend Aristocrat Realty Income.
I believe that O will announce a 0.2% increase in its monthly dividend from $0.2355/share to $0.2360/share. While this may sound small, it's worth mentioning that O increases its monthly dividend by small increments in March, June, September, and December, and a larger increment (typically 2-3%) every January.
Across the 13 shares of O that I own, my net annual forward dividends would be $0.078 higher if the stock increases its dividend as much as I expect.
Dividend Increase #2: W.P. Carey (WPC)
The next dividend increase that I anticipate will be announced in September is from none other than W.P. Carey, which is not far away from joining O as a Dividend Aristocrat.
Similar to O, WPC increases its dividend each quarter and I expect that September will be no different.
I'm forecasting that WPC will announce a 0.2% advance in its quarterly dividend from $1.05/share to $1.052/share.
Should my prediction prove correct, my net annual forward dividends would increase $0.056 across my seven shares of WPC.
Dividend Increase #3: General Mills (GIS)
The third dividend increase that I'm expecting for September is General Mills.
I anticipate that GIS will boost its quarterly dividend 3.9% from $0.51/share to $0.53/share.
If this dividend increase plays out, my net annual dividends would increase $0.32 across my four shares of GIS.
Dividend Increase #4: Philip Morris International (PM)
The next dividend increase that I'm forecasting for September is Philip Morris International.
Given that Yahoo Finance analysts are forecasting 18% year-over-year growth in adjusted diluted EPS for PM from $5.17 in 2020 to $6.10 this year, I believe that PM will announce a 4.2% increase in its quarterly dividend from $1.20/share to $1.25/share.
Across my 13 shares of PM, my net annual forward dividends would be boosted $2.60 if my prediction is correct.
Dividend Increase #5: Lockheed Martin (LMT)
The fifth dividend increase that I am expecting for September is Lockheed Martin.
Given LMT's guidance of $26.70-$27 in diluted EPS for this fiscal year (versus $24.58 in diluted EPS during 2020), I believe that LMT will announce a 7.7% increase in its quarterly dividend from $2.60/share to $2.80/share.
My net annual forward dividends would increase by $2.40 across my three shares of the stock if my forecast is proven right.
Dividend Increase #6: Visa (V)
The next dividend increase that I believe will be announced in September is from Visa.
In light of the fact that V's EPS is expected to jump 15.5% from $5.04 last fiscal year to $5.82 this fiscal year, I think that V will get back on track as far as dividend growth is concerned after last year's modest 6.7% increase in the quarterly dividend from $0.30/share to $0.32/share.
That's why I am confident that V will announce a 12.5% increase to take its quarterly dividend to $0.36/share.
Across my two shares of the stock, my net annual forward dividends would be boosted by $0.32 from the dividend increase.
Dividend Increase #7: STORE Capital (STOR)
The seventh dividend increase that I'm forecasting for September is STORE Capital.
Since STOR's AFFO/share is expected to mostly recover to pre-pandemic levels this year and I expect the REIT will exceed pre-pandemic levels next year, I expect a greater increase than last year's token $0.01 increase in the quarterly dividend from $0.35/share to $0.36/share.
I'm anticipating a 5.6% increase in the quarterly dividend to $0.38/share, which would advance my net annual forward dividends by $1.52 across my 19 shares of the stock.
Dividend Increase #8: Verizon (VZ)
The next dividend increase that I'm expecting to be announced in September is from Verizon.
As VZ continues to build out its 5G infrastructure, the company has some room to boost its dividend.
This is precisely why I believe that VZ will increase its quarterly dividend 2.8% from $0.6275/share to $0.645/share.
Across my 18 shares of the stock, my net annual forward dividends would increase $1.26 if my prediction proves to be correct.
Dividend Increase #9: American Tower (AMT)
The ninth dividend increase that I'm anticipating for September will come from American Tower.
For those unfamiliar, AMT raises its quarterly dividend each quarter.
Since the third quarter dividend increase is typically the second smallest behind the second quarter dividend increase, I am expecting that AMT will announce a 2.4% increase in its quarterly dividend from $1.27/share to $1.30/share.
My net annual forward dividends would advance by $0.36 across my three shares of the stock if my forecast is proven right.
Dividend Increase #10: Microsoft (MSFT)
The final dividend increase that I'm anticipating for September is from Microsoft.
With MSFT's EPS expected to advance 9% this fiscal year over the last to $8.76 and a low dividend payout ratio, I believe that MSFT can easily afford to hike its quarterly dividend 10.7% from $0.56/share to $0.62/share.
Across my three shares of the stock, my net annual forward dividends would be $0.72 higher from such a dividend increase.
My net annual forward dividends skyrocketed $10.954 in August as a result of the five dividend increases that I received during the month.
This would take $312.97 in fresh capital invested at an average yield of 3.5% to replicate, which is by far my best month in my four year investing career to this point. Heading into September, my net annual forward dividends are just below $1,950.
Based on my predictions for next month's dividend increases, my net annual forward dividends would increase by $9.634 or nearly as much as August. With the overall quality of the names I'm expecting increases from next month, I wouldn't be surprised if I secured my second straight month of $10+ in additional net annual forward dividends from dividend increases alone.
I've spent the last four years laying the foundation of my portfolio and I'm so excited that things seem to meaningfully be trending in the right direction. Compounding dividends truly are the eighth wonder of the world!
How was your August for dividend increases?
Are you expecting any first-time dividend increases from new holdings as I am with VZ and MSFT?
As always, I look forward to reading your comments in the comment section below!
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