Tuesday, October 12, 2021
Tuesday, October 5, 2021
As I'm writing this blog post, it's the last day of September. It's hard to believe, but there are only three months left in the year! Fall is here in Central Wisconsin, but you wouldn't know it based on the temperatures in the high-70s Fahrenheit today.
At any rate, it's time for me to discuss my capital deployment activity in September 2021 and the dividend stocks that I purchased for the month.
previous post of this series, it will be rare going forward that I discuss capital deployment within my employer-sponsored retirement account. That's because I stopped working there nearly three months ago to pursue writing on a near full-time basis with The Motley Fool and Seeking Alpha.
Tuesday, September 28, 2021
As I'm writing this blog post, fall just started a couple days ago and September will be over in less than a week. It won't be long before we'll need to set our clocks back an hour here in Central Wisconsin and it'll be dark by 5 PM.
That means it's time to talk about the eight dividend increases that I received in September. I accidentally lumped in Visa (V) with expected September dividend increases despite the company routinely announcing its dividend increases in October (not sure how that happened!).
Even though I'm only expecting three dividend increases for October, the month should still be a nice boost to my portfolio.
Actual Dividend Increases in September
Dividend Increase #1: Realty Income (O)
Dividend Increase #2: W.P. Carey (WPC)
Dividend Increase #3: Philip Morris International (PM)
Dividend Increase #4: Lockheed Martin (LMT)
Dividend Increase #5: STORE Capital (STOR)
Dividend Increase #6: Verizon (VZ)
Dividend Increase #7: American Tower (AMT)
Dividend Increase #8: Microsoft (MSFT)
Dividend Freeze: General Mills (GIS)
Expected Dividend Increases for October
Dividend Increase #1: Visa (V)
Dividend Increase #2: American Electric Power (AEP)
Dividend Increase #3: Pinnacle West Capital (PNW)
Tuesday, September 21, 2021
As I'm writing this blog post, the start date of fall is just one week away. Even more importantly, October is a couple weeks away.
Why is October so significant?
Because I will be receiving three paychecks during the month as opposed to the usual two, so I will have even more funds than normal to invest. Let's take a look at three dividend stocks not already in my portfolio that I am keeping my eyes on for October.
Image Source: Pexels
Dividend Stock #1: Omnicom (OMC)
The first stock on my watch list for October is the large-cap advertising and marketing conglomerate, Omnicom.
Omnicom's diluted EPS declined nearly 28% from $6.06 in 2019 to $4.37 last year.
While Omnicom was predictably hit somewhat hard in 2020 with COVID-19 emerging as a pandemic and the resulting drag on the economy, the company is set to rebound this year and beyond.
Omnicom's diluted EPS is set to advance slightly higher than 2019's figure of $6.06 to $6.09 this year as the economy picks back up and advertising spending recovers based on the average analyst estimate. Better yet, analysts expect that Omnicom will resume mid-single-digit earnings growth, when diluted EPS is anticipated to increase 4.4% from $6.09 this year to $6.36 next year.
Through the first six months of this year, Omnicom also maintained an interest coverage ratio just under 8 ($1.05 billion in earnings before interest and taxes/$134 million in interest costs). This implies that the balance sheet is relatively healthy and that interest expenses can easily be covered by EBIT.
Despite this news, Omnicom is trading at less than 12 times this year's forecasted diluted EPS. This is moderately lower than the company's historical P/E ratio around 15 to 16, which makes Omnicom a good value play.
With $2.75 in dividends per share scheduled to be paid out this year, Omnicom's diluted EPS payout ratio will be in the mid-40% range. I believe that this makes Omnicom's current 3.91% dividend yield (based on the current share price of $71.67 as of September 12, 2021) safe.
Dividend Stock #2: McDonald's (MCD)
The second dividend stock on my watch list for October is the massive fast-food chain McDonald's.
Similar to Omnicom, McDonald's was adversely impacted by the onset of COVID-19 last year. This resulted in McDonald's adjusted diluted EPS declining 22.8% from $7.84 in 2019 to $6.05 in 2020.
However, McDonald's is on track to fully recover and then some this year, with analysts expecting adjusted diluted EPS to surge 50.1% from $6.05 last year to $9.08 this year.
McDonald's also was able to generate an interest coverage ratio of slightly over 8 through the first half of this year ($4.93 billion in EBIT/$597 million in interest expense), which like Omnicom, indicates that McDonald's can handily service its debt.
While McDonald's isn't a bargain at 26 times this year's earnings and 24 times next year's earnings, it also isn't too expensive considering the quality of the business. I have wanted to own McDonald's for years and have never purchased it because I was always waiting for the perfect price, but I've come to learn over the years that a fair price is good enough for a world-class business. McDonald's can do the rest in the wealth creating process.
McDonald's will likely pay out $5.25 in dividends per share (assuming a 7% increase in the quarterly dividend in September to $1.38) against $9.08 in EPS this year, which would be a dividend payout ratio in the high-50% range.
McDonald's 2.16% yield at $239.18 a share (and soon to be around 2.3% yield with the upcoming dividend increase) appears to be safe based on a quick analysis of the balance sheet and dividend obligation, which are two of the main reasons I want to own the stock.
Dividend Stock #3: Raytheon Technologies (RTX)
When that recovery occurs next year, RTX's interest coverage ratio will be much healthier.
My net annual forward dividends will end this month at around $2,025, which is another all-time high for my portfolio. And since I'm expecting around $2,500 available to invest for October between my capital contributions and dividends, October will be one of my heaviest months of capital deployment for this year.
I'm very much looking forward to seeing if I can reach the $2,100 mark or so for the month with my capital deployment and the dividend increases that I'm expecting for October.
Tuesday, September 14, 2021
As I'm writing this blog post, Labor Day has now passed and the official start of fall is only two weeks away. Having only received 1 of my 10 expected dividend increases for this month to date, the last 3 weeks of September are going to be jam packed with dividend increases.
Now let's delve into the intent of this blog post, which is to outline the record amount (for the middle month of a quarter) of dividends that I received in August 2021.
During August 2021, I collected $132.66 in net dividends. This represents a 13.4% quarterly growth rate compared to the $116.98 in net dividends that I received in May 2021.
Furthermore, August 2021's dividend income is a 45.5% year-over-year growth rate against the $91.19 in net dividends that I collected in August 2020.
Digging into dividend income by account, I received $120.63 in net dividends from 21 companies in my Robinhood account, $11.66 in net dividends from 3 companies in my Webull account, and $0.37 from 16 companies in my M1 Finance account.
The net dividends that I collected from May 2021 to August 2021 increased by $15.68 as a result of the following activity within my portfolio:
I received an additional $1.07 in net dividends from British American Tobacco (BTI) within my Robinhood and Webull accounts, which is the result of my purchase of two extra shares of the stock within my Robinhood account in June.
My net dividends collected from National Retail Properties (NNN) were $0.11 higher in my Robinhood account due to the recent dividend increase.
I received $2.70 in net dividends from Abbott Laboratories (ABT) for the first time within my Robinhood account, which was because I opened a position in the stock back in May.
My net dividends collected from Clorox (CLX) were $2.32 higher in my Robinhood account from starting a position in July.
I also received an additional $0.94 in net dividends from Realty Income (O) within my Robinhood account due to the stock's recent dividend increase and my decision to add to my position in May.
My net dividends collected from General Dynamics (GD) increased by $1.19 in my Robinhood account, which was the result of my decision to add to my position in May.
I received an extra $1.60 in net dividends from Lowe's (LOW) within my Robinhood account, which was a combination of adding a share in May and the dividend increase that was announced in May.
My net dividends collected from JPMorgan Chase (JPM) were $2.70 higher in my Robinhood account, which was due to my decision to initiate a position in July.
I also received an extra $0.50 in net dividends from CVS Health (CVS) within my Robinhood account, which was also the result of my decision to add to my position in May.
My net dividends collected from Verizon (VZ) were $2.51 higher in my Robinhood account, which was due to my purchase of four additional shares in June.
I received an extra $0.04 in net dividends from my M1 Finance account, which was due to the aforementioned dividend increase from LOW (a $0.01 boost to dividends), Norfolk Southern's (NSC) dividend increase (another $0.01 increase to dividends), and the timing of JPM's dividend payment ($0.02 in additional dividends).
I'm pleased with my capital deployment to my portfolio and dividend increases over these past few months, which led to the healthy quarterly growth rate in my net dividend income from May to August.
Based on my capital deployment, I believe that November 2021 will see a net dividend income right around $150 and that by next August, my net annual dividends will be close to $200.
How was your August for dividend income?
Did you receive any dividends for the first time as I did from whole shares of ABT, CLX, and JPM?
As always, I thank you for your readership and look forward to your comments in the comment section below!
Wednesday, September 8, 2021
As I'm writing this blog post, there are just four months remaining in this year. This gives me four months to advance my net annual forward dividends from around $1,950 heading into September to $2,200 by the end of this year.
With that aside, I'll take a look at my capital deployment for August 2021 and what stocks I decided to purchase during the month.
I started August off by initiating a new position in Medtronic (MDT), which is because I essentially believe that Medtronic is fairly valued and the company has a variety of growth catalysts in the future as I noted in my most recent Motley Fool article on the stock.
I opened a five share position in MDT at an average cost of $127.93, which equates to an average net yield of 1.97% based on the $12.60 in net annual forward dividends added from my purchase.
Next, I added 18 shares of Viatris (VTRS) to my position at an average cost of $14.23 a share, which is an average net yield of 3.09% when considering the $7.92 that was added to my net annual forward dividends due to the purchase.
As I explained in a recent Motley Fool article on VTRS, the company is cheaply valued despite a fundamentally healthy business with tons of room to grow its dividend. These were the key factors that prompted me to add to my position.
The second stock that I initiated a position in during August was Merck (MRK), which is because its blockbuster oncology drug Keytruda secured an FDA approval for advanced renal cell carcinoma. As I detailed in a recent Motley Fool article on MRK, the stock has multiple vehicles for growth in the years ahead (i.e., Keytruda, HPV vaccine Gardasil, and its animal health business) and trades at a cheap valuation considering its growth prospects.
This led me to initiate a seven share position in MRK at an average cost of $78.79 a share, which works out to a 3.3% net yield when factoring in the $18.20 in net annual forward dividends that these purchases added to my portfolio.
I also purchased an additional share of J.M. Smucker (SJM) in August at a cost of $132.74, which is a 2.98% net yield given the $3.96 in net annual forward dividends that were added from my purchase.
SJM's recent 10% dividend increase and reasonable valuation were the two main reasons why I opted to add to my position.
I added one share of Amgen (AMGN) during August at a cost of $225.49, which was due to the stock's recent pullback and decent operating results as I outlined in a recent Motley Fool article.
This works out to a 3.12% net yield when considering the $7.04 in net annual forward dividends that were added as a result of my purchase.
I also added a share to my position in National Retail Properties (NNN) at a cost of $46.80. I noted in a recent Motley Fool article that I like the stock because of its focus on single-tenant triple net lease REITS, diversified portfolio, and fair valuation.
Considering the $2.12 in net annual forward dividends that this purchase added to my portfolio, my net yield was 4.53%.
I also decided to add a couple shares to my position in KeyCorp (KEY) at an average cost of $19.65 a share. This works out to a net yield of 3.77% given the $1.48 in net annual forward dividends that were added to my portfolio from the purchase.
Finally, I added two shares of Dominion Energy (D) to my portfolio at an average cost of $79.77 a share. I was impressed by D's strong start to this year and sensible valuation as I noted in a recent Seeking Alpha article.
This equates to a net yield of 3.16% when considering the $5.04 in net annual forward dividends that this purchase added to my dividend portfolio.
I invested $2,051.12 in August and added $58.36 to my portfolio's net annual forward dividends, which works out to a net yield of 2.85%.
When also considering the $10.954 in net annual forward dividends that were added from dividend increases in August, my portfolio's net annual forward dividends surged from just under $1,880 at the start of August to about $1,950 heading into September.
Tuesday, August 31, 2021
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)
Dividend Increase #2: Simon Property Group (SPG)
Dividend Increase #3: Main Street Capital (MAIN)
Dividend Increase #4: Williams-Sonoma (WSM)
Dividend Increase #5: Altria Group (MO)
Expected Dividend Increases for September 2021
Dividend Increase #1: Realty Income (O)
Dividend Increase #2: W.P. Carey (WPC)
Dividend Increase #3: General Mills (GIS)
Dividend Increase #4: Philip Morris International (PM)
Dividend Increase #5: Lockheed Martin (LMT)
Dividend Increase #6: Visa (V)
Dividend Increase #7: STORE Capital (STOR)
Dividend Increase #8: Verizon (VZ)
Dividend Increase #9: American Tower (AMT)
Dividend Increase #10: Microsoft (MSFT)
Tuesday, August 24, 2021
After hitting yet another all-time high of 4,480.26 on August 16, the S&P 500 pulled back a bit to close the week just above 4,440. Delta variant concerns and signaling of reduced asset purchases ahead from the recently released minutes of the Federal Reserve's July 27-28 meeting led the S&P 500 nearly a half percent lower to close out the week.
With most of my capital deployment in the books for August 2021, I'll now turn my attention to a few dividend stocks on my watch list for September 2021.
Image Source: Pexels
Dividend Stock #1: Lockheed Martin (LMT)
The first dividend stock on my watch list for September is Lockheed Martin.
LMT has gotten off to a great start in the first half of this year, which is evidenced by its 4.4% growth in year-to-date revenue from $31.9 billion in H1 2020 to $33.3 billion in H1 2021, per LMT's Q2 2021 earnings press release (the source for all accompanying data, unless otherwise specified).
As a result of also repurchasing $1.5 billion or 4.2 million shares in the first half of the year according to its recent 10-Q, LMT's diluted EPS advanced 10.2% from $11.87 in H1 2020 to $13.08 in H1 2021.
LMT's backlog also remained healthy at the end of the second quarter, with backlog declining slightly from $147.1 billion at the start of the year to $141.7 billion to end the quarter. For context, this is the equivalent of over two years of revenue for LMT based on its guidance of $67.3-$68.7 billion for this year.
LMT's interest coverage ratio improved from 13.4 in the first half of 2020 to 15.5 in H1 2021, which suggests that the company has no issues in covering its interest expense with earnings before interest and taxes.
A payout ratio of just under 40% in the first half of this year means that the dividend is well covered ahead of its upcoming dividend increase. And a forward P/E ratio of less than 13 based on Yahoo Finance's average analyst estimate of $28.02 and the current price of $357.17 a share (as of August 20, 2021) indicates that the stock is quite cheap.
Dividend Stock #2: Merck (MRK)
The next dividend stock on my watch list for September is Merck.
MRK caught my attention after I recently covered the company's U.S. Food and Drug Administration (FDA) approval to treat advanced renal cell carcinoma (RCC) in combination with Lenmiva, which prompted me to start a position in the stock.
The FDA's approval of the drug combo is the second indication in as many months following the approval in July to treat advanced endometrial carcinoma, which is positioning Keytruda to overtake AbbVie's (ABBV) Humira in a couple years as the top-selling drug in the world. The drug also won't face any loss of exclusivity concerns until 2028 per FiercePharma, so MRK has plenty of time to diversify away from Keytruda.
MRK's interest coverage ratio of 12 (according to data sourced from MRK's Q2 2021 earnings press release, unless indicated otherwise) indicates the company's balance sheet is in decent shape.
Based on MRK's guidance for $5.47-$5.57 in non-GAAP EPS this year and a dividend per share obligation of $2.60, MRK's dividend payout ratio should clock in at a sustainable sub-50% level this year.
MRK's current price of $78.68 a share implies a current PE ratio of about 14, which is a good value for the 12.8% annual earnings growth that analysts are expecting over the next five years.
Dividend Stock #3: Visa (V)
The final dividend stock on my watch list for September is Visa (V).
Visa has benefited from the reopening global economy, which becomes clear by examining the company's results through the first nine months of its current fiscal year.
V has increased its YTD revenue by 4.8% year-over-year from $16.7 billion in 2020 to $17.5 billion in 2021 (all data sourced from V's Q3 2021 earnings press release, unless otherwise noted).
While V hasn't been able to give non-GAAP EPS guidance for this fiscal year due to the uncertainty surrounding COVID, analysts are anticipating 15.5% year-over-year growth from $5.04 in 2020 to $5.82 this year.
Compared to the $1.28 in dividends per share that will be paid out for this fiscal year, that would be a non-GAAP EPS payout ratio of just 22%. This leaves V's payout plenty of room to grow ahead of the 19.7% annual earnings growth that is expected over the next five years.
Additionally, V's interest coverage ratio improved from an already robust 28.9 in the nine months ended 2020 to 30.3 in the nine months ended this year.
While V at its share price of $231.36 isn't cheap at nearly 40 times this year's earnings forecast, its excellent growth prospects, low payout ratio, and great balance sheet are arguably worth the premium.
My net annual forward dividends are likely to be around $1,945 heading into September. I'm anticipating that I will deploy somewhere in the range of $1,500-$2,000 in capital for next month and a number of dividend increases will be announced at that time, which should get me slightly beyond the $2,000 net annual forward dividend milestone.
Are any of LMT, MRK, and/or V on your watch list for September 2021?
If not, what stocks are you watching for the month?
As always, thanks for your readership and please feel free to leave your comments in the comment section below!
Tuesday, August 17, 2021
The past few days have been very hot and humid in Central Wisconsin. The high temperature for today is 80 and it feels like 90 degrees Fahrenheit. Fortunately, temperatures are going to cool down to the 70s starting tomorrow for the foreseeable future.
With that aside, I'll turn my attention to the dividend stock purchases that I made in July 2021.
Factoring in the 3.5% sales charge for contributions, I put $244.34 in net capital to work during July 2021 within my retirement account. This helped my CAIBX share balance increase by 3.563 shares from 171.434 to begin the month to 174.997 heading into August.
Based on $2.13 in net annual forward dividends/share, my net annual forward dividends were boosted by $7.59. This works out to a 3.11% net yield based on the capital I invested during the month. It's worth noting that this will be the last regular activity in my retirement account aside from dividend reinvestment, which is due to the fact that I started writing for Motley Fool and Seeking Alpha full-time recently.
Moving to my taxable account, I started new positions in five companies during July.
I started July by initiating a 10 share position in Essential Utilities (WTRG) at an average cost of $47.41 a share. The purchase added $10.73 to my net annual forward dividends, which equates to a 2.26% net yield for my cost basis.
For those who are interested in my decision to open a position in WTRG, I would refer them to my recent Seeking Alpha article for more details. I'll just summarize by indicating that WTRG is a stock I have wanted to own for years, but I have always waited for a "better price" that never ultimately materialized.
I was willing to pay a slight premium for shares of WTRG just to get a position started and I intend to aggressively add on even the slightest of pullbacks going forward.
I followed up my purchase of WTRG with yet another utility, which was a seven share position in Pinnacle West Capital (PNW) at an average cost of $84.39 a share. This works out to a 3.93% net yield based on my cost basis and the $23.24 in net annual forward dividends that were added to my portfolio.
PNW was on my July 2021 dividend stock watch list, so it made sense to add it to my portfolio.
I also rationalized my purchase of PNW in a recent Seeking Alpha article, but the long and short of it was that I liked PNW's exposure to Arizona's steadily growing population, nice balance sheet, and safe 4% yield.
Another stock on my watch list for last month that I added to was consumer staple Kimberly Clark (KMB).
I view KMB as a safe income play with mid-single digit dividend growth potential, which is what prompted me to purchase four shares of the stock at an average cost of $134.33 a share. This equates to a net yield of 3.39% based on the $18.24 in net annual forward dividends that the purchases added to my portfolio.
I also added another share of JPMorgan Chase (JPM) to my portfolio last month at a cost of $151.80, which added $4.00 to my net annual forward dividends. This works out to a 2.64% net yield on my purchase.
Sticking with the financial sector, I initiated a 20 share position in KeyCorp (KEY) at an average cost of $19.17 a share. Considering the $14.80 in net annual forward dividends that were added from my purchase, this equates to a 3.86% net yield.
I covered KEY in a Motley Fool article last month, which was what ultimately led me to start a position in the regional bank.
I essentially liked the company's solid increase in noninterest income, the improving balance sheet, and huge $1.5 billion share repurchase program at a time when the bank appears to be somewhat undervalued.
The fifth and final stock that I initiated a position in during July was the consumer staple Clorox (CLX), which was also on my watch list for the month.
While I added a bit prematurely given that the stock would tank following its softened outlook in its Aug. 3 earnings press release, I like the company's above-average dividend yield with mid-single-digit dividend growth potential.
This prompted me to start a two share position in the stock at an average cost of $181.13 a share, which is a 2.56% net yield based on the $9.28 in net annual forward dividends added.
Finally, I added to my position in Viatris (VTRS). I purchased 8 shares at an average cost of $13.85 a share, which works out to a net yield of 3.18% when considering the $3.52 in net annual forward dividends added by my purchase.
As I explained in my August 2021 dividend stock watch list post, VTRS is taking the right steps to reduce its debt by $6.5 billion by 2023. The company is trading at just four times this year's forecasted EPS of $3.53, which is mind boggling.
The company is also making nice progress in getting new products approved (and eventually on the market), which is evidenced by the recent approval of Viatris and Biocon's interchangeable biosimilar for Sanofi's insulin drug Lantus that I discussed in a recent Motley Fool article.
Overall, I deployed $2,854.61 in net capital during July. Compared to the $91.40 in net annual forward dividends that were added last month, this works out to a 3.20% net yield.
I also added $4.36 in net annual forward dividends due to dividend increases last month, which along with my capital deployment, led to my net annual forward dividends surging from $1,780 entering July to nearly $1,880 heading into August.
Tuesday, August 10, 2021
Tuesday, August 3, 2021
It's hard to believe that as I'm writing this blog post, July is in the books and only five months remain in 2021. That should just motivate us to give that much more effort to achieve our goals in the time that remains this year!
With that aside, I will discussing a few dividend stocks on my watch list for August 2021.
Dividend Stock #1: Viatris (VTRS)
Dividend Stock #2: Pfizer (PFE)
Dividend Stock #3: J.M. Smucker (SJM)
Tuesday, July 27, 2021
As I'm writing this blog post, the heat and humidity has made its way back to Central Wisconsin with high temperatures reaching into the upper 80s Fahrenheit.
Playing basketball in the driveway will be a bit less comfortable with the heat, but that's not enough to stop me from getting exercise doing something I enjoy as long as I stay hydrated!
Without further ado, I'll be discussing the dividend increases that I received during July 2021 and looking ahead to the dividend increase that I am expecting for August 2021.
Actual July 2021 Dividend Increases
Dividend Increase #1: Wells Fargo (WFC)
While Wells Fargo fell short of my expectation of a 150% increase in the quarterly dividend from $0.10/share to $0.25/share, it still increased its dividend 100% to $0.20/share, which is a step in the right direction for the company to restore its dividend to the pre-COVID level of $0.51/share in a few more years.
I'd rather a company gradually increase its dividend back to pre-COVID levels to build a cushion and prevent another dividend cut in the future than to have it rush to restore its dividend prematurely.
Across my 8 shares of WFC, my net annual forward dividends soared $3.20 due to the company's dividend increase.
Dividend Increase #2: J.M. Smucker (SJM)
One company that really delivered beyond my wildest dreams in July was J.M. Smucker, which announced a robust 10% dividend increase in the quarterly dividend from $0.90/share to $0.99/share.
The previous two dividend increases leading up to this dividend increase were pretty anemic, so it's nice to see SJM getting back to solid dividend growth.
My net annual forward dividends advanced by $0.72 across my 2 shares as a result of the company's dividend increase.
Dividend Increase #3: National Retail Properties (NNN)
Wrapping up the dividend increases that I received for July 2021, National Retail Properties announced a dividend increase that came in below my expectations. Rather than the 3.8% increase in the quarterly dividend from $0.52/share to $0.54/share that I was predicting, NNN increased a 1.9% increase in the quarterly dividend to $0.53/share.
I was somewhat surprised by the announcement given the recovery in NNN's AFFO/share that I cited in my previous post of this series, but I'll take whatever dividend increases I can get. Perhaps NNN will make up for it with a stronger dividend increase next year.
Across my 11 shares of NNN, my net annual forward dividends increased by $0.44 due to the company's dividend increase.
Expected Dividend Announcement(s) for August 2021
Dividend Increase #1: Altria Group (MO)
The only dividend increase that I am anticipating for August is from the 3rd largest holding in my portfolio in terms of annual dividend income, which is Altria Group (MO).
Most readers are probably aware, but for those that aren't, MO recently announced that it was selling its Ste. Michelle Wine Estates business for $1.2 billion to a private equity firm to focus more on its core business.
In addition, the company expects to use its proceeds to repurchase shares at what look to be an attractive valuation, which will also reduce the company's total dividend obligation, and create a bit more leeway for the next dividend increase.
As a result, I am expecting that MO will announce a 4.7% increase in the quarterly dividend from $0.86/share to $0.90/share.
Should this dividend increase play out as expected, my net annual forward dividends would increase by $2.72 across my 17 shares as a result of the company's dividend increase.
My net annual forward dividends increased by $4.36 due to dividend increases received in July 2021, which is equivalent to investing $109 in fresh capital at a 4% average yield.
Looking ahead to next month, I am expecting that MO's dividend increase will help my net annual forward dividends to increase by $2.72, which would be like investing $68 in one's own capital at a 4% average yield.
How was your July as it relates to dividend increases?
What companies are you anticipating you will receive dividend increases from in August?
I appreciate your readership and look forward to your comments in the comment section below!