Tuesday, December 17, 2019

Expected Dividend Increases for January 2020

As I write this post, the Milwaukee Bucks' streak of 18 straight wins was finally snapped by the Dallas Mavericks. It was interesting that the Mavs were able to grind out a win against the Bucks without their MVP candidate, Luka Doncic. The Mavs won despite Giannis Antetokounmpo's 48 points, but the Bucks were bound for a disappointing game at some point this season.

At the very least, it was encouraging to see the Bucks battle back from what was a 16 point deficit at one point to make the game a 120-116 loss. The last few minutes of the game were far more interesting than I thought they would be, and that's the true mark of a contending team.

Aside from all this basketball talk, another month will soon be coming to a close. With that in mind, it's time for us to examine the dividend increases that I received in December, and to preview the increases that I am expecting for the month of January.

Before we delve into December's dividend increases, I'd like to begin with a couple side notes. While WP Carey (WPC) hasn't yet announced an increase in its quarterly dividend at the time of writing, I still expect the company to increase its dividend 0.2% from $1.036/share to $1.038/share.

When this dividend increase does occur, it will boost my annual forward dividends by $0.024 across my 3 shares.

The other side note is that Ventas (VTR) opted not to increase its quarterly dividend this year, which was a cautious approach in light of the company's guidance for next year. Considering the yield of the stock, I can understand and I'm willing to be patient with it.

Dividend Increases for December:

Increase #1: Realty Income (O)

As the beautifully predictable company that O is, the company announced a 0.2% increase in its monthly dividend from $0.2270/share to $0.2275/share just as I predicted in my previous post of this series.

While this may appear to be a small raise, it's important for us to remember that O raises its dividend 3-4 times a year by around 0.2% and opts for a solid 2-3% increase in its monthly dividend each January.

Across my 4 shares of O, my annual forward dividends were boosted by $0.024 as a result of this announcement.

Increase #2: AT&T (T)

Similar to O, AT&T announced a dividend increase that was in line with what I outlined as my expectation in the previous post of this series. T announced a 2% increase in its quarterly dividend from $0.51/share to $0.52/share.

As T has done for quite a few years now, they opted to stick with the customary $0.01 quarterly dividend increase.

I'm entirely fine with that decision and I'll go on the record by saying that I expect one more year of the customary $0.01 quarterly dividend increases before we see an acceleration in that dividend growth for the first time in quite a few years.

T has been doing a great job of deleveraging after its acquisition of Time Warner last year, but that's no reason to stop deleveraging quite yet.

Across my 17 shares of T, this announcement increased my annual forward dividends by $0.68.

Increase #3: Pfizer (PFE)

Pfizer delivered a 5.6% increase in its quarterly dividend from $0.36/share to $0.38/share. This one came as a bit of a surprise and at the same time, it represented the status quo. The $0.02 increase in the quarterly dividend was the same as the increase last year in absolute terms, but I was expecting PFE to possible increase its dividend by only $0.01 because of its deal with GlaxoSmithKline (GSK) to combine consumer health businesses, and its deal to spin off its off-patent business to form Viatris with Mylan.

There's a lot going on at PFE, but it's great that management announced a very solid increase in spite of all of the activity.

Across my 8 shares of PFE, this resulted in an $0.64 increase to my annual forward dividends.

Increase #4: Amgen (AMGN)

Amgen continued to deliver very strong dividend growth, announcing a 10.3% increase in its quarterly dividend from $1.45/share to $1.60/share.

When we take into consider that Amgen's earnings payout ratio is still barely above 40% and that the company is projected to grow its earnings 7-8% annually over the next 5 years by Yahoo Finance, these types of increases appear to be likely to continue over the next few years.

This dividend increase boosted my annual forward dividends by $0.60 across my single share of AMGN.

Increase #5: Dominion Energy (D)

As I anticipated based upon Dominion's company guidance issued a few months back, D increased its quarterly dividend 2.5% from $0.9175/share to $0.94/share.

Although this is a departure from the high-single digit to low-double digit dividend increases of the past few years, it's great that D is committed to the sustainability of its dividend. Lowering its earnings payout ratio to the 70% range will enhance the safety of D's dividend over the long-term, and allow D to invest more in growth projects going forward.

Across my 4 shares of D, this increase added $0.36 to my annual forward dividends.

Bonus Increase: Eastman Chemical Company (EMN)

It's always great to have discovered you missed out on a dividend increase a few days after you published the latest post in your dividend increase series. I somehow managed to forget about the fact that EMN was due to announce a dividend increase in December.

Given that EMN announced a 6.5% increase in its quarterly dividend from $0.62/share to $0.66/share, they certainly didn't disappoint. A 6.5% increase on a stock that I was able to secure a 3.4% entry yield on is about what I like to see. This was my first of what I believe will be many nice increases from EMN!

Across my 3 shares of EMN, this resulted in a $0.48 boost in my annual forward dividends.

Expected Dividend Increases for January 2020

Expected Increase #1: Realty Income (O)

As I alluded to above, O is set to announce a 2-3% increase in its monthly dividend next month.

I'll split the difference and predict a 2.5% increase in O's monthly dividend from $0.2275/share to $0.2330.

Across my 4 shares of O, this would boost my annual forward dividends by $0.264.

Expected Increase #2: Enterprise Products Partners (EPD)

As one of many consistent companies in my stock portfolio, I fully expect EPD to continue its trend of announcing yet another 0.6% increase in its quarterly distribution from $0.4425/unit to $0.4450/unit.

Given that EPD has increased its distribution each and every quarter for the past 61 quarters, these types of steady but small increases have really worked wonders for long-term unitholders of the company.

Across my 27 units of EPD, this would boost my annual forward distributions by $0.27.

Expected Increase #3: Magellan Midstream Partners (MMP)

Rounding out the increases that I expect in January, I expect MMP to announce a 0.7% increase in its quarterly distribution once again, raising the distribution from $1.0200/unit to $1.0275/unit.

Across my 7 units MMP, this would result in a $0.21 increase to my annual forward distributions.

Concluding Thoughts:

Assuming WPC comes through as I believe it will with the 0.2% increase in its quarterly dividend, my annual forward dividends/distributions will have been boosted by $2.808 as a result of the increases in the month of December.

This is equivalent to investing $70.20 at a 4% yield, which is really starting to show the power of dividend increases in the scheme of the DGI journey to FI.

January will once again mark a slowdown in dividend increases compared to December, which isn't a surprise if last year is any indication.

Overall, I'm expecting increases in January to boost my annual forward dividends/distributions by $0.744, which would be equivalent to investing $18.60 at a 4% yield.


Was December a strong month for you as well in terms of dividend increases? Did you receive any increases from companies for the first time as I did with EMN?

As always, thanks for stopping by and following my progress for dividend increases during the month of December. I look forward to replying to any comments that you leave in the comment section below.


  1. A good-looking December on the raise front, Kody. I was able to share in the O, EMN and WPC raises.
    That was it in December for me though. I'm expecting bigger things in January, however.
    Keep boosting that forward dividend income!

  2. ED,

    Thanks for the comment! It's a pleasure to be a shareholder in those 3 wonderful companies with you. It will be nice to get another raise from O in a few weeks. I love their consistency. Keep crushing it on your end as well!