Tuesday, November 24, 2020

Expected Dividend Increases for December 2020

As I'm writing this blog post, we're just days away from Thanksgiving, which means we barely have another month to achieve our goals for the year!

Interestingly, Iron Mountain (IRM) opted to keep its dividend steady with its dividend announcement in November, which means that I didn't receive any dividend increases during the month (although I also didn't endure any dividend cuts during the month).

Without further ado, I will be discussing a dividend increase that I forgot to include in my previous post of this series, and getting into the dividend increases that I am expecting for next month. I'd advise you to buckle up as I am expecting quite a few in December!

Missed Dividend Increase In October

Missed October Dividend Increase: Royal Dutch Shell (RDS.B)

As alluded to by the heading above, Royal Dutch Shell's (RDS.B) 4.1% increase to its quarterly dividend from $0.32/share to $0.333/share got past me as the dividend increase came in the last couple days of the month.

While the 66.7% cut in RDS.B's dividend back in April was a notable blow to my portfolio's net annual forward dividends (resulting in a $22.32 decline in my portfolio's net annual forward dividends), the difficulties that the industry was and still is experiencing justified a dividend cut to preserve capital for the sake of investing for the future and maintaining the balance sheet.

It will be a long road to recovery for RDS.B's dividend, but it was nice to see the company start back on its path to restoring its previous dividend.

Across my 9 shares of the stock, my net annual forward dividends were boosted by $0.468 as a result of RDS.B's dividend increase.

Expected Dividend Increases For December:

Expected Increase #1: Realty Income (O)

Starting with arguably the most consistent REIT within my portfolio, I am expecting a 0.2% increase in Realty Income's (O) monthly dividend from $0.2340/share to $0.2345/share.

While this is a minuscule dividend increase, it's worth remembering that O increases its dividend by 2-3% every January, with smaller increases like the above in March, June, September, and December.

It's steady raises from O that are a testament to the power of dividend growth and compounding, which is why O is among the most favorite stocks in my portfolio.

My net annual forward dividends would increase $0.042 across my 7 shares should O's dividend increase meet my expectations outlined above.

Expected Increase #2: W.P. Carey (WPC)

Moving to yet another consistent REIT within my portfolio, I am expecting W.P. Carey (WPC) to announce a 0.2% increase in its quarterly dividend from $1.044/share to $1.046/share.

Similar to O, WPC increases its dividend in the last month of each quarter, so while the stock barely increases its dividend, it increases its dividend 4 times a year typically.

Across my 5 shares of WPC, I anticipate my net annual forward dividends will increase $0.04 in the event that WPC continues upon its trend of $0.002/share increases to its quarterly dividend.

Expected Increase #3: AT&T (T)

Moving to the stock in this post with the longest dividend increase streak, I don't expect that AT&T (T) will break from its customary $0.01/share dividend increase, which means that I am forecasting T will increase its quarterly dividend 1.9% from $0.52/share to $0.53/share.

While the stock is making significant progress in deleveraging its debts, I don't believe the stock is quite ready to bust the doors down and deliver more than its customary $0.01/share dividend increase this year.

With that in mind, I forecast my net annual forward dividends will be boosted by $0.84 as a result of T's dividend expected dividend increase across my 21 shares.

Expected Increase #4: Amgen (AMGN)

Moving to my only biopharma holding in this post (normally Pfizer or PFE would be included in my December dividend increases, but given the spin-off of Upjohn and Mylan to form Viatris or VTRS, PFE's next dividend will likely be a bit lower, although even when factoring in VTRS's dividend), I am forecasting yet another strong dividend increase from Amgen (AMGN).

Given that AMGN's payout ratios are in the mid to upper-30% range in terms of non-GAAP EPS and FCF, I am anticipating that AMGN will announce a 9.4% increase in its quarterly dividend from $1.60/share to $1.75/share.

Given my soon to be 3 shares of AMGN (spoiler alert: I'll be buying two shares of AMGN later this week ahead of the dividend announcement), I am expecting a $1.80 uptick in my net annual forward dividends as a result of AMGN's next dividend announcement.

Expected Increase #5: Eastman Chemical Company (EMN)

Given that Eastman Chemical Company has been adversely impacted by COVID-19 and that earnings as a result won't recover to 2019 levels until next year, I am expecting a smaller dividend increase than the 6.5% that was announced last December.

In light of the above, I am forecasting a 3.0% increase in EMN's quarterly dividend from $0.66/share to $0.68/share.

Should this occur, my net annual forward dividends would be boosted by $0.32 across my 4 shares of the stock.

Expected Increase #6: Broadcom (AVGO)

Wrapping up this blog post, I am expecting yet another strong dividend increase from Broadcom (AVGO), although I don't anticipate this dividend increase will be nearly as large as the 22.6% dividend increase last December.

Given that AVGO's payout ratio can't really expand much more without starting to sacrifice long-term viability, I am forecasting that AVGO will announce a 10.8% increase in its quarterly dividend from $3.25/share to $3.60/share.

Across my 3 shares of AVGO, this announcement would result in a $4.20 surge in my net annual forward dividends.

Concluding Thoughts:

While I didn't receive any dividend increases in November due to IRM's announcement that it was keeping its dividend in line with the previous, I am looking forward to what is sure to be my strongest month of dividend increases next month.

It would take $181.05 in capital deployment to match the $7.242 in dividend increases that I am expecting next month, assuming a 4% weighted average yield.

As I'll be discussing in my next post for November 2020 dividend stock purchases, I am also pleased to announce that my capital deployment schedule is back to its ~$1,500/month routine, which I believe will bode well in my progression to FI closing this year out and heading into next year.


Are you expecting December to be a busy month for dividend increases within your portfolio as well?

Will you be receiving dividend increases for the first time from any of your stock holdings as I will be in the case of AVGO?

As always, I value your readership and welcome your comments in the comment section below!

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