We are cruising through 2021. I cannot believe that June is finally upon us. This year has been FANTASTIC for dividend growth investors, as companies continue to shock us with fantastic dividend increases. As passionate dividend growth investors, we cover these dividend increases like a hawk. Therefore, every month, we summarize the expected dividend increases. Here is the June installment of our monthly dividend increases article.

Why Dividend Increases Matter

Dividends are the foundation of our goal to reach financial freedom. We continuously invest in dividend growth stocks to grow our passive income. If you haven’t figured it out by now, we eat, sleep, and breathe dividends!

Read: 5 Reasons WHY Dividend Investing is the EASIEST Form of Passive Income

If the goal is to produce a passive income stream that will one day cover our expenses, making sure that income stream GROWS is critical. Without growth, your dividend income stream will lose purchasing power to inflation. Inflation is typically between 2%-3% annually; although, it has been higher the last few months (4.2% in April and over 3% in May). Therefore, if you cannot achieve average dividend growth of at least that percentage, your income stream will be able to cover less, and less, over time.

That is why dividend growth is a major deciding factor in all of our stock purchase decisions. It is the 3rd metric of our Dividend Stock Screener for a reason. For each stock, we review a company’s history of increasing dividends (consecurtive annual dividend increases) and a company’s five-year average dividend growth rate!

We cover dividend news extensively on our Youtube Channel. Each week, we discuss the major dividend increases from the week before. Heck, each month, we even bring this article to life and cover the major expected dividend increases of the coming month.

Actual Dividend Increases in May 2021

Berfore we feature June’s dividend increases, we wanted to highlight some of the MAJOR dividend increases from May. April was the BEST dividend investing month of the year. So my expectations for May were pretty low, to be honest. However, there were a few surprises that had me pretty pumped up.

The first was the featured dividend increase. Lowe’s Corporation (LOW), announced an absolutely INSANE dividend increase. Their 33% dividend increase was double the company’s 5 year average dividend growth rate (16%). The home improvement sector has been on a tear since the pandemic, as consumers reallocate their travel budgets to DIY projects while other consumers are opting to improve their house versus buying into this hot real estate market.

The surprises didn’t stop there. Sysco (SYY) shocked shareholders with a surprise dividend increase announcement of its own. The company’s 4.4% dividend increase did not pack the same punch as Lowe’s. However, what is noteable is that the company is increasing its dividend once again. SYY typically increases its dividedn in November. In November 2020, the company decided to maintain its dividend, as opposed to increasing it. Now, 6 months later, management decided to raise the dividend and maintain the company’s Dividend Aristocrat status.

The surprises do not stop there though everyone. Stay on the edge of your seat. We had another company that decided to increase its dividend again after opting not to in 2020. That company was LyondellBasell (LYB). The company’s 7.6% increase was HUGE, particularly for Lanny, who has a strong position in the chemical company. Isn’t it the best feeling when a dividend increase comes out of left field?!

See: Our Entire Dividend Stock Portfolios are Disclosed on Our Website! 

The remaining dividend increases weren’t a surprise. In fact, they were all featured in our dividend increase article last month. Still, it is important to share the results of the expected dividend increases in May.

• Northrop Grumman (NOC):  8.3% dividend increase. Lower than the company’s 5 year average DGR.
• Chubb (CB): 2.6% dividend increase. In line with the company’s 5 year average DGR.
• Cardinal Health (CAH): 1% dividend increase. We both were a little disappointed with this increase.
• Medtronics (MDT): 8.6% dividend increase. In line with the company’s 5 year average DGR.
• Clorox (CLX) – Shockingly, no dividend has been announced yet. Let’s see what happens in the first week of June before passing judgement.

Expected Dividend Increases in June 2021

There were clearly some strong dividend increases in May. In fact, there were some fireworks, especially coming from Lowe’s. That 33% dividend increase takes the cake for the strongest dividend increase of the month. Unlike May, June should be be a much quieter dividend month. We are only expecting 4 dividend increases for the month!

Dividend Stock #1 – Kroger (KR): The grocery sector has been on our mind a lot lately. We covered SpartanNash (STPN) on our blog and YouTube Channel. Now, one of the major players in the sector gets to flex its muscles with a dividend increase.  We both are shareholders of Kroger. Further, in Lanny’s quest to buy an undervalued dividend stock in this rising market, he added to his Kroger position over the last several months. Clearly, this company is going to be high on our radar when they announce a dividend increase in June.

Last year’s dividend increase –  10.7%

Five-year average DGR –  11.45%

Expected timing of Dividend Increase Announcement –  Middle of the month

Dividend Stock #2 – Target (TGT): Target. One of our favorite stocks and one of my favorite stocks (landing a spot on my 5 Always Buy Stock List). Target has done a phenominal job making the shopping experience easy and affordable consumers. That’s why my wife and I shop there regularly! Several years ago, the company was deemed defeated by Amazon and Walmart. Rather than give up, the company evolved and is now performing very well. If you don’t believe me, look at the company’s stock price over the last few years.

From a dividend perspective, the dividend growth has been low. The company has increased its quarterly dividend by $.02 per share the last several years. In 2021, I do not see the company breaking that trend.

Last year’s dividend increase –  3%

Five-year average DGR –  3.97%

Expected timing of Dividend Increase Announcement –  Middle of the month

Dividend Stock #3 – Realty Income (O): The Monthly Dividend Paying Company that is at the center of EVERY dividend investor’s hearts is set to announce a dividend increase. The company typically announces quarterly dividend increases, as opposed to one large annual dividend increase. That’s part of the reason we love the company!

This may be an interesting increase for Realty Income. Why? The company just announced a massive acquisition of VAREIT. With the acquisition, the company will spin off a portion of the combined entity. While this shouldn’t impact their current dividend, spin-offs can always have an interesting impact on a shareholder’s total dividend. Pfizer shareholders benefited with its post spin-off while AT&T shareholders are fuming at the company’s reported dividend cut after the Warnermedia-Discovery acquisition.

Last year’s June 2020 dividend increase –  .2%

Five-year average DGR –  3.86%

Expected timing of Dividend Increase Announcement –  Middle of the month

Dividend Stock #4: UnitedHealth (UNH): This company has not received a lot of attention on our blog in the past. UNH is a leader in the healthcare insurance sector and has increased its dividend for 11 consecutive years. The company has a strong dividend track record too. Their earnings should continue to increase, as the cost for healthcare unfortunately trends upwards due to an aging population. Lets see if they can deliver a strong dividend increase in June.

Last year’s dividend increase –  15.7%

Five-year average DGR –  20.15%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Summary

Are you as excited as we are for the coming month? You bet that we are going to keep a close eye on these 4 dividend stocks, along with Clorox, to see if the companies follow through and increase their dividend. The name of the game is buying income producing assets and growing your passive income stream. So all, lets make every dollar count, save everything we can, and continue buying dividend stocks!

What dividend increases are you expecting this month? Are you a Lowe’s shareholder that is PUMPED about the dividend increase you received? Did you receive an increase in May that was not feature in this article?

Bert