2021 is here with style! Man I cannot believe how quickly 2020 came and went. With another year of dividend investing behind us, we are all looking forward to the new year. Get ready to create some new memories, grow our passive income, and push ourselves one step closer to financial freedom. Each month, we summarize the previous month’s dividend increases and project the dividend increases we are expected to receive. Here is the next installment of our monthly expected dividend increases series!
Dividend News and Dividend Increases in December 2020
Before looking ahead to the upcoming dividend increases in January, I like to discuss the actual dividend increases from the previous month. We have been saying this for months now. Dividend Increases are back and it contributed to yet another CRAZY month of dividend increases. It is fantastic news for dividend increases, as you most likely received some of the featured increases and therefore, saw your dividend income grow!
Read: Dividend Stocks are Back! | Reinstating & Rising from the Dividend Cuts!
In this section of the article, I will discuss dividend increases, and changes, from December. Unfortunately, due to the volume of dividend increases, I cannot discuss them all in detail (but I will do my best to cover as many as I can)! Each week, we produce a video discussing recent dividend increases on our Youtube Channel! If you want to catch them all, definitely subscribe and don’t miss our weekly dividend updates!
Rather than simply list each dividend increase, I will split the dividend increases into different, self-identified categories. The categories are:
- Featured Dividend Increases – This section will summarize the increases for some of the companies listed in last month’s article
- Surprise Dividend Increases – This section will cover dividend increases that came out of left field!
- The Surprise “No Dividend Increase Announcement” – This section will feature any companies that did not announce a dividend increase as expected
- The Best of the Rest – This section will briefly list any remaining dividend increases that have not been covered.
Let’s dive in and review some dividend increases!
Featured Dividend Increases
Abbott Laboratories (ABT) – Let’s kick this off with my favorite dividend increase from the month. Abbott Laboratories annonuced a MASSIVE 25% dividend increase in December. This was the company’s 49th consecutive dividend increase. Now, with this huge increase, they are one year away from becoming a Dividend King. We loved this increase so much that we feature Abbott vs. AbbVie in one of our recent dividend stock showdown Youtube videos. Despite the large increase, I was shocked that Abbott’s stock price is trading at such a premium. Regardless, this was amazing news for the company’s shareholders. How could this not be one of my favorite increases for the month?
Mastercard (MA) – Earlier in the year, Visa announced a 6.7% dividend increase. It was a shockingly low dividend increase for a company that has averaged 20% dividend increase in recent years. After that, all eyes turned to Mastercard in December. Would the company announce a similar increase to Visa? Or would they take this opportunity to upstage their rival in the eyes of dividend investors.
Well, Mastercard didn’t know the socks off of their shareholders. In fact, their 10% dividend increase that was announced was also belw the company’s recent average. Still, it was better than their rivals, so that is something!
The Pharmaceutical Sector: Pfizer (PFE) , Bristol-Myers Squibb (BMY), Eli LIlly (LLY) – Rather than list each individual company separately. It was worth noting that several dividend stocks in the pharmaceutical sector. Quite franky, it seems like EVERY company in the sector has announced at some point in the fourth quarter. Here were the featured increases from the sector:
- Pfizer (PFE): Pfizer increased its quarterly dividend to $.39 per share from $.38 per share. That is a 2.6% increase!
- Bristol-Myers Squibb (BMY): The company increased its quarterly dividend to $.49 per share from $.44 per share. That 8.8% was nearly double their five-year average dividend growth rate.
- Eli Lilly (LLY): The dividend increases keep growing. LLY increased its quarterly dividend to $.85 per share from $.74 per share. That is a 14.8% dividend increase!
Surprise Dividend Increases and Announcements
Darden Restaurants (DRI) – It doesn’t get much more shocking than this dividend increase. Darden was not even on our radars as a dividend growth stock. However, out of left field, Lanny caught that the company announced a 23% dividend increase! That’s a huge announcement for shareholders in a sector that has been beaten down during the pandemic. It could be a great sign for the sector, and other large restaurant chains, as we kick off 2021.
Amgen (AMGN) – Amgen typically announces its dividend in December. However, the company was not featured in my article last month. Therefore, I was not expecting the company’s double digit dividend increase in December! Enjoy that 10% dividend increase shareholders!
Campbell’s Soup (CPB) – I will always think about the Donovan McNabb Campbell Chunky Soup commercials from my childhood when I hear this company’s name. Imagine how surprised I was when Campbell’s announced a 6% dividend increase in December. CPB isn’t a consistent dividend growth stock. They announce a dividend increase once every several years. As a fan of dividend paying consumer staple stocks, though, I was pumped about this dividend increase
The Banking Industry – The banking sector received a nice jolt in December when the Fed annoucned the results of stress tests. The results were positive and therefore, Big Banks began announcing large share repurchase programs. With widespread return of capital to shareholders, one would expect that dividend increases in the sector will be plentiful in the coming months.
The Suprise “No Dividend Increase Announcement”
AT&T (T) – This lack of a dividend increase shocked us all. AT&T is very regimented with its dividend increase. The company typically announces a $.01 per share increase in its quarterly dividend at the beginning of December. AT&T’s shockingly announced the same dividend last month. Our jaws nearly hit the floor we were so surprised. We will discuss AT&T later on in the article; however, the company has been making major news over the last few years as they look to transform the business and pay down its debt. We had a blast breaking down what the heck is going on with AT&T on our YouTube Channel.
The Best of the Rest
ABM Industries (ABM) – ABM announed a 2.7% dividend increase. This was in line with its 5- year average dividend growth rate.
EnBridge (ENB) – The Canadian oil and gas giant announced a 3.1% dividend increase.
Franklin Resources (BEN) – The asset management company annoucned a 3.7% dividend increase.
Dividend Increases Expected in January 2021
Man, I told you that December was a busy month. There were so many strong dividend increases, and a few surprises (good and bad). That was one solid finish to the year. Now, with the calendar turned, lets look ahead to January and review the expected dividend increases in January 2021!
Company #1: Consolidated Edison (ED) – It is only fitting that we start the list off with one of our Top 5 Foundation Dividend Stocks, right? Consolidated Edison is one of our favorite utility companies, dominating in a sector that is essential to everyday life. The company has been paying a dividend since the 1800s (yes, you read that right) and has increased its dividend for nearly 50 consecutive years. While they won’t get there this year, ED is closing in on becoming a Dividend King!
ED Dividend Increase last year – 3.4%
ED Five-year average DGR – 3.3%
Expected timing of Dividend Increase Announcement – Middle of the month
Company #2: Kimberly-Clark Corporation (KMB) – Kimberly Clark is another classic dividend stock on the verge of becoming a dividend king. KMB has increased its dividend for 46 consecutive years! The company operates in consumer staples sectors. Some of their brands include household names such as Huggies, Kleenex, and Cottonelle. KMB’s dividend history is very consistent. Unfortunately, the company does not have the highest of average dividend growth rates. I would love to see a surprise dividend increase announcement here!
KMB Dividend Increase last year – 3.9%
KMB Five-year average DGR – 4.0%
Expected timing of Dividend Increase Announcement – End of the month
Read: What is a Dividend King?
Company #3: Air Products and Chemicals, Inc (APD) – I am not too familiar with Air Products and Chemicals, outside of their status as a Dividend Aristocrat. APD is not a consumer facing company. Instead, the company sells gas and chemicals to industrial companies. The company’s dividend yield is close to 2% and they have a very strong double-digit dividend growth rate.
APD Dividend Increase last year – 15.5%
APD Five-year average DGR – 10.7%
Expected timing of Dividend Increase Announcement – End of the month
Company #4: Intel Corporation (INTC) – This is the first dividend increase that I am VERY excited about on this list. There will be a lot of mystery here for Intel. The technology giant has been featured on multiple dividend stock watch lists lately. Further, after years of avoiding the company, I finally initiated a position in Intel. This should be interesting due to Intel’s crazy end of the year. The stock price slumped on news that Microsoft is developing its own chips and their recent financial results. Heck, there have even been rumors about potentially taking the company private (only rumors). Who knows what this means for the company’s dividend increase. However, whatever happens, I am expecting that we will be all over the news!
INTC Dividend Increase last year – 4.5%
INTC Five-year average DGR – 6.6%
Expected timing of Dividend Increase Announcement – End of the month
Company #5: Chevron Corporation (CVX) – The oil sector has been through one heck of a year. The price per barrel collapsed at the beginning of 2020 and the sector has yet to recover. Major oil companies, such as Shell and BP, slashed their dividend to preserve their cash and improve their balance sheets. However, both Exxon and Chevron maintained their dividend. Exxon passed on announcing their standard, annual dividend increase in 2020. Will Chevron follow Exxon’s lead? Or will the company shock us all and announce their annual dividend increase?
CVX Dividend Increase last year – 8.4%
CVX Five-year average DGR – 3.9%
Expected timing of Dividend Increase Announcement – End of the month
Company #6: Comcast (CMCSA) – I am excited to see Comcast’s potential dividend announcement in January. The entertainment sector is facing fierce competition, as the streaming wars continue to intensify. Comcast’s latest battle was the launching of NBC’s Peacock streaming service and taking hit shows like The Office off of Netflix. While I will not pay for another streaming service, I know plenty of others that may do so! On the dividend front, Comcast has a strong dividend growth rate and I would expect their January dividend increase announcement to fall in line with their recent history.
CMCSA Dividend Increase last year – 9.5%
CMCSA Five-year average DGR – 13.2%
Expected timing of Dividend Increase Announcement – End of the month
Company #7: AT&T (T) – I am bringing forward AT&T one more time on this list. Sure, it was a surprise that the company didn’t announce their dividend increase at the beginning of December. We were DEFINTIELY shocked. Now, all eyes are looking ahead to their major investor day at the end of January. Expectations are that the company will make some major announcements, one of which should be their dividend strategy going forward. I’m still expecting a dividend increase by the company! That will be an exciting, news filled day.
Summary
Let’s buckle up and get ready for an exciting January. We identified 7 companies that are expected to announce dividend increases in the coming months. Hopefully you are all starting to see why we love dividend investing. To us, it is the BEST and EASIEST form of passive income. 2021 is going to be an amazing year for everyone. However, I have a great feeling it is going to be extraordinary for dividend investors. Time to roll up our sleeves and continue investing in income producing assets!
What dividend increases did you receive in December? How many are you expecting in January? What was the largest increase you received? What is your expectation for AT&T?
Bert