Tuesday, November 27, 2018

Expected Dividend Increases for December 2018

Another month has passed us by, which means it is time for another installment of the expected dividend increases series. Moreover, we're in the busiest month of the expected dividend increase series thus far. Prior to delving into the dividend increases that I anticipate for the DGI portfolio for the month of December, I'll start by recapping the dividend increases from November, and their impact on my dividend income.

November Dividend Increases

Increase #1:

Abbvie (ABBV) announced an 11.5% dividend increase from a quarterly dividend of $0.96 to $1.07 a share on November 2. The company also raised its EPS guidance to $7.90 to $7.92 a share, representing a 41.3% YOY growth at the midpoint of $7.91 a share, with much of the growth coming from tax reform. Sales of Humira increased 9.0% YOY, topping $5.124 billion in Q3 2018. Furthermore, Imbruvica reported net revenues of $972 million which is a 41.3% YOY increase. Overall, Abbvie continues to deliver for dividend growth investors, and with a strong drug development pipeline (74 new and expanded indications and counting), it is highly like that these increases will continue for years to come, in my opinion. This dividend increase added $1.76 in annual dividend income across my 4 shares!

Increase #2:

Hormel (HRL) announced an 11.7% dividend increase from a quarterly dividend of $0.188 to $0.21 a share on November 19. Overall, this raise was actually a slight bit higher than what I projected in my Expected Dividend Increases for November article. I anticipated an increase in the quarterly dividend to $0.205/share. This increased my projected annual dividend income by $0.005.

Expected Dividend Increases

Increase #1:

Realty Income (O) will likely be announcing another small dividend increase in December. I anticipate a dividend increase of about 0.2% from the current monthly dividend of $0.2205 a share to $0.2210 a share. Across my 4 shares of O, this would increase my forward annual dividends by $0.024.

Increase #2:

WP Carey (WPC) will likely continue its trend of increasing its quarterly dividend by $0.005 a share. I anticipate that WPC will increase its quarterly dividend by 0.5% from $1.025 a share to $1.03 a share. This would increase my annual dividends by $0.06 across my 3 shares.

Increase #3:

Ventas (VTR) will likely announce a dividend increase in December. I believe the quarterly dividend will be increased by 1.9% from $0.79 to $0.805 a share. This would increase my annual dividends by $0.24.

Increase #4:

AT&T (T) will also likely be announcing a dividend increase. I would assume the trend of raising the quarterly dividend by a penny per share will continue, meaning T will increase its quarterly dividend by 2% from $0.50 a share to $0.51 a share. This would increase my annual dividend income by $0.64 across my 16 shares.

Increase #5:

Pfizer (PFE) will likely be increasing its quarterly dividend by 5.9% from $0.34 a share to $0.36 a share. This would increase my annual dividends by $0.64 across my 8 shares.

Increase #6:

Amgen (AMGN) will also likely be announcing a dividend increase in December. Based upon the most recent 14.8% dividend increase from a quarterly dividend of $1.15 a share to $1.32 a share, I believe its entirely reasonable to project a quarterly dividend raise from $1.32 a share to $1.49 a share. This would increase my annual dividends by $0.68 with my single share.


Overall, I project my annual dividend income to increase by at least $2.28, with a few additional raises in my M1 Finance portfolio likely. I'm very excited with the month that is ahead of us to see how it unfolds. Looking ahead to January, I expect an even stronger month of dividend increases from my holdings. It's always exciting to be a dividend growth investor, especially in the coming months.


How many dividend increases are you expecting in December? How much of an increase in your annual dividends are you expecting?

Tuesday, November 20, 2018

The Tangibility of Dividends

As a dividend growth investor, one of the least talked about strengths of the strategy is the tangibility of dividends. When you receive dividends from quality dividend growth stocks, you are receiving cash that you can use for whatever purpose you assign to it. Whether that's to save, spend, or reinvest, the choice is yours. Not only do you receive dividends that you can determine the purpose of, but you can often see the products and services of the companies that you own shares in.

When you're a dividend growth investor, you have the benefit of being able to transition from the knee jerk trader mindset to the investor mindset. As a dividend growth investor, you take the long term view rather than the short-term view that has so many "investors" buying and selling over every quarterly report or non-event, which is one of the main reasons many retail investors significantly under-perform the market. I believe the primary reason for this is that when you drive past companies that you own shares in or when you see their products in stores, this only reinforces the concept. Many of the best companies that you can own are also the largest companies that hold strong competitive advantages in their industry, with strong balance sheets, and a strong track record of paying growing dividends year after year despite financial market volatility, partisan politics, economic downturns, and wars.

For instance, as I drive through my hometown, I encounter the following businesses that I own a stake in:

AT&T store (T)
Genuine Parts Company (which owns NAPA stores) (GPC)
Royal Dutch Shell gas stations (RDS.B)
BP gas stations (BP)
CVS Health (CVS)
Exxon Mobil gas stations (XOM)
Verizon store (VZ)
Home Depot store (HD)
Lowe's store (LOW)
Prudential Financial (PRU)

Moreover, these companies sell health products, beverages, snack foods, etc that are produced by other companies that I own:

Pepsico (PEP)
General Mills (GIS)
Procter & Gamble (PG)
Hormel (HRL)
GlaxoSmithKline (GSK)
Pfizer (PFE)
Johnson & Johnson (JNJ)
Hershey (HSY)
JM Smucker (SJM)
Altria Group (MO)

From the time I was in middle school, I was always that kid who checked labels on household products to see which companies owned which products that my household used. I came to the realization that if I owned enough shares in the companies that are so well represented in my household, such as Procter & Gamble, Johnson & Johnson, JM Smucker, General Mills, and Hershey, I could have a stream of entirely passive income in the form of dividends. I'm interesting, I know.

This mindset is one that I have had for the past several years now, but since I began investing in September 2017, the mindset has only been reinforced. With every additional dividend that I receive from the above companies and other great companies, my belief in quality dividend paying companies as my path to financial independence only grows.

Full Disclosure:

I am long all the above stocks. As always, please do your own research before buying positions in any of these companies.


Do you check household products to see who they're owned by? When you drive past companies that you own shares in or see the products of companies that you own shares in on store shelves, do you light up like I do?

Tuesday, November 6, 2018

October 2018 Dividend Income

As this article is about to be published, it's already early November. Basketball season is in full swing and I couldn't be more excited about Milwaukee Bucks basketball! With that said, another month has gone by, which means it's time to examine what the dividend portfolio provided for me in dividends for the month of October.

Overall, I collected $21.32 in income from the holdings in my Robinhood account and M1 Finance account. Of the $21.32 in income, $21.13 originated from 8 companies in my Robinhood account with the remaining $0.19 in dividends coming from 10 companies (as PEP and D paid dividends in September) in my M1 Finance account.


The $21.32 in dividend income that I collected in October represents a 26.7% QOQ increase from the $16.83 that I collected in July. $3.47 of the additional $4.49 in dividend income that I received originated from my first dividend from GlaxoSmithKline (GSK) since buying back in June, just days after the ex-dividend date. Furthermore, I received an additional $0.41 from PPL due to an extra share that I added shortly after the last dividend from them. A dividend increase from WP Carey (WPC) accounted for an additional $0.02 in income, while a dividend increase from Altria Group (MO) accounted for another $0.40 in additional income. The remaining $0.19 in dividends came from my M1 Finance account that I established in early September of this year.

Although the trend of the first month of the quarter being my slowest continues, my dividends have grown nearly 577% from the $3.15 collected in October 2017! I'm expecting another quarter of somewhere around 25% growth in my dividend income in January 2019 as I recently initiated a position in Iron Mountain Inc (IRM) and will continue to add to it if the price stays in the low to mid $30s.


How much did you receive in October? Did you have any newcomers to your dividend payers like I did? What was your YOY dividend growth?