Tuesday, September 24, 2019

Expected Dividend Increases for October 2019

It's hard to believe that another month is just days away from ending as I write this post. Football season is well under way and through the first couple weeks, the Packers have got off to a 2-0 start. While the first week was ugly from an offensive perspective and week two wasn't great aside from the first 15-16 minutes, the Packers have played fantastic defense thus far. And that's an encouraging sign given that defense wins championships. Meanwhile, the Bucks are just a few weeks away from playing their first regular season game in Houston. Aside from the excitement in the world of sports, it's time to examine the dividend increases we received in September and how they stacked up to our expectations. We'll also examine the dividend increases we're expecting for October.

Dividend Increase #1: Realty Income (O)

Realty Income (O) announced a 0.2% increase in its monthly dividend from $0.2265/share to $0.2270/share just as I was expecting in my previous post in this series. Across my 4 shares, this increased my annual forward dividends by $0.024.

Dividend Increase #2: WP Carey (WPC)

WP Carey (WPC) announced a 0.2% increase in its quarterly dividend from $1.034/share to $1.036/share. This was yet another dividend increase that was exactly what I was expecting, and I have to say, I love that! Across my 3 shares, WP Carey's dividend raise boosted my annual forward dividends by $0.024.

Dividend Increase #3: Philip Morris International (PM)

Philip Morris International (PM) announced a 2.6% increase in quarterly dividend from $1.14/share to $1.17/share. This increase was a bit less than what I was expecting, but given that PM is considering a merger with Altria Group (MO), it's understandable that the dividend increase was a bit on the conservative side this year. Across my 5 shares of PM at the time of the announcement, this increased my forward annual dividends by $0.60. Shortly after PM's dividend increase, I increased my position a bit. I outline my rationale in my recent article on PM on Seeking Alpha.

Expected Dividend Increase #1: Iron Mountain (IRM)

I'm expecting Iron Mountain to replicate it's 4% dividend increase from last year, which would result in an increase in the quarterly dividend from $0.611/share to $0.638/share. Across my 4 shares, this would result in a $0.432 increase in my annual forward dividends.

Expected Dividend Increase #2: Enterprise Products Partners (EPD)

When I take into consideration that Enterprise Products Partners is among the most consistent MLPs in terms of distribution increases, I would be shocked if the company doesn't continue its trend of increasing its quarterly distribution by 0.6% from $0.44/unit to $0.4425/unit. Across my 19 units, this would increase my annual forward distributions/dividends by $0.19.

Expected Dividend Increase #3: EQM Midstream Partners (EQM)

Despite EQM Midstream Partner's rough past couple months in terms of capital depreciation, I expect that the company will continue to deliver with another 1.3% increase in its quarterly distribution from $1.16/unit to $1.175/unit as the company nears completion on its Mountain Valley Pipeline. Across my 4 units, this would boost my annual forward distributions by $0.24.

Closing Thoughts: 

September was by in large what I expected it would be in terms of dividend increases. While Philip Morris' dividend increase was a bit less than I thought it would be, I can understand why the company exercised caution. My other two dividend increases were exactly what I was expecting. Overall, my annual forward dividends increased by $0.648 for the month of September. This is equivalent to investing $16.20 at a 4% yield.

Fortunately, I'm expecting October to ramp up, with $0.862 in dividend increases expected. This would be equivalent to investing $21.55 in fresh capital at a 4% yield.


How many dividend increases did you receive in September? Were they about what you expected, more than you expected, or less than you expected?

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

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