As I'm writing this blog post, it is mid-January here in Central Wisconsin and the temperatures are hovering just above freezing. It's incredible to think that the temperatures haven't yet dipped that far below freezing in my neck of the woods when there have been many Januarys that have been around sub-zero!
With that in mind, I will be discussing the dividend announcements in my portfolio during January 2021 and looking ahead to the dividend announcements that I am expecting in February 2021.
Actual Dividend Announcements for January 2021
Increase: Enterprise Products Partners (EPD)
Well, a distribution increase from Enterprise Products Partners (EPD) is a pleasant surprise as I had almost forgot that the last time EPD increased its distribution was a calendar year ago, a couple months before COVID-19 was declared a pandemic by the World Health Organization, turning the world upside down.
Due to the expectation of a recovery in economic activity going forward, energy commodities have soared, with WTI crude surpassing $50/barrel and natural gas closing in on $3/MMBtu.
As a result of the anticipated recovery, EPD opted to announce a 1.1% increase in its quarterly distribution from $0.445/unit to $0.45/unit.
Across my 33 units of EPD, my net annual forward distributions advanced $0.66 due to EPD's distribution announcement.
Reinstatement: Tanger Factory Outlet Centers (SKT)
Arguably the biggest positive development in my dividend portfolio was the reinstatement of Tanger Factory Outlet Centers' (SKT) dividend at $0.1775/share (roughly half of the previous dividend). It was only about 8 months ago when SKT was one of the companies in my portfolio to announce a dividend suspension or cut.
Given that SKT is required by law to pay out at least 90% of its net income to maintain its status as a REIT and that SKT has reported positive cash flow in the second half of 2020 on top of maintaining a strong balance sheet, I believe that SKT made the right decision with this announcement.
Across my 11 shares of SKT, this announcement helped my net annual forward dividends to surge $7.81.
Freeze: Realty Income (O)
In a surprising turn of events, Realty Income (O) opted to maintain its monthly dividend at $0.2345/share.
While I will never fault a company for being conservative in its dividend policy (how else would a company continually pay out steadily increasing monthly dividends?), it was surprising that O's reasonably strong operating results didn't lead to the company announcing a 2-3% increase in the monthly dividend as I expected in my previous post of this series.
Cut: The GEO Group (GEO)
Unfortunately, The GEO Group (GEO) announced that it would be cutting its dividend for the second time in the past few months. GEO further reduced its quarterly dividend from $0.34/share to $0.25/share in response to the impact of COVID-19 on its business and to preserve capital for debt repayment in the years ahead.
While I never like to see dividend cuts, I will continue to hold my shares of GEO at this time because I agree with the decision to focus on debt repayment.
Across my 16 shares of GEO, this reduced my net annual forward dividends by $5.76.
Expected Dividend Announcements for February 2021
Expected Increase #1: PPL Corp (PPL)
Starting with PPL Corp (PPL), I am expecting that the company will announce a dividend increase similar to last year's, which would be a 0.6% increase in the quarterly dividend from $0.4150/share to $0.4175/share.
Across my 8 shares of PPL, this dividend announcement would result in a $0.08 increase in my net annual forward dividends.
Expected Increase #2: Genuine Parts Company (GPC)
Moving to the Dividend King with the longest dividend increase streak in my portfolio, I am expecting Genuine Parts Company (GPC) to extend its dividend increase streak to 65 consecutive years next in February.
While GPC is a Dividend King and it boasts a stout 6.8% annual dividend growth rate over the past 10 years, I am expecting a dividend increase in line with last year's as the company looks to recover from the the impact of COVID-19.
As a result, I am forecasting a 3.8% increase in GPCs quarterly dividend from $0.79/share to $0.82/share.
If my prediction proves to be correct, my net annual forward dividends would advance by $0.72 across my 6 shares of GPC.
Expected Increase #3: Prudential Financial (PRU)
Given that Prudential Financial's (PRU) earnings are expected to fully recover in FY 2021 per Yahoo Finance estimates, I am forecasting that PRU will announce a dividend increase a bit less than last year for the sake of conservatism.
Therefore, I am expecting that PRU will announce a 6.4% increase in its quarterly dividend from $1.10/share to $1.17/share.
Across my 9 shares of PRU, this dividend announcement would boost my net annual forward dividends by $2.52.
Expected Increase #4: Home Depot (HD)
Another strong dividend increase that I'm expecting is from none other than Home Depot (HD).
While I don't anticipate HD to deliver a dividend increase near its 5 or 10 year CAGR of ~20% this February, I do believe that HD's strong performance in 2020 and promising outlook for 2021 will buoy the stock to deliver a solid 10% dividend increase in its quarterly dividend from $1.50/share to $1.65/share.
If my prediction proves to be correct, my net annual forward dividends would advance by $1.20 across my 2 shares of HD.
Expected Increase #5: Digital Realty Trust (DLR)
Since Digital Realty Trust (DLR) has held up relatively well in 2020, I am expecting a dividend increase similar to the one last year.
As such, I am predicting a 3.6% increase in DLR's quarterly dividend from $1.12/share to $1.16/share.
Across my 3 shares of DLR, this dividend announcement would increase my net annual forward dividends by $0.48.
Expected Increase #6: Albemarle (ALB)
I'm expecting a mid-single digit dividend increase from the somewhat recently minted Dividend Aristocrat, Albemarle (ALB).
I am anticipating that ALB will announce a 5.2% increase in its quarterly dividend from $0.385/share to $0.405/share.
Should my prediction prove to be correct, my net annual forward dividends would be boosted by $0.40 across my 5 shares of ALB.
Expected Increase #7: United Parcel Service (UPS)
Another business that has fared well in 2020 and is positioned even better this year with ~10% earnings growth forecasts is United Parcel Service (UPS), which is why I am forecasting a 6.9% increase in UPS's quarterly dividend from $1.01/share to $1.08/share.
Across my 4 shares of UPS, my net annual forward dividends would advance by $1.12 as a result of this dividend announcement.
Expected Increase #8: Cisco (CSCO)
Cisco (CSCO) held up relatively well in 2020, but Yahoo Finance is expecting CSCO to fare even better in 2021 with 6% earnings growth forecasted at this time.
In light of this earnings forecast, I am expecting a 5.6% increase in CSCO's quarterly dividend from $0.36/share to $0.38/share.
If my prediction proves to be correct, my net annual forward dividends would increase by $0.88 across my 11 shares.
While I didn't receive the dividend increase from O in January like I was expecting, I was fortunate enough to receive an increase from EPD and a reinstatement from SKT, which was only partially offset by another cut by GEO.
These dividend announcements added $2.71 to my net annual forward dividends, which would require a $67.75 investment at a 4% yield to replicate.
I'm very excited to kick off the next few months of dividend increases with 8 expected increases in February, which would add $7.40 if my forecasts play out.
This would require a sizable $185.00 investment at a 4% yield to duplicate, which would be the largest impact of dividend increases on my portfolio since I began investing in September 2017!
How was your January in terms of dividend announcements?
Did you experience any dividend reinstatements in your portfolio as I did with SKT?
As always, thank you for reading and I look forward to your comments in the comment section below!
O's lack of increase definitely caught me off guard and was completely unexpected. I'm hoping they're just delaying the raise a bit. I'm still waiting to see what ROST does after cutting their dividend during the pandemic. TJX has re-instated already but ROST hasn't. I'm hoping that's coming here when the March payout gets announced.ReplyDelete
Thanks for the comment. Delaying dividend increases has been a common theme over the past 9-10 months, so it wouldn't surprise me too much to see that increase from O in a quarter or two.