Each and every month, Bert writes about the expected dividend increases, each and every month. I love those articles, as it completely HYPES me up for what’s to come. However, as a dividend investor, who reviews and watches the stock market it is extremely… difficult. Yes, difficult! I am in this mode, that I want to let everyone know what I go through during the month where I expected dividend increases, to see if you feel the same or to see what you do to help “ease” the anxiety!
The excitement
Ah, yes! The first emotion I go through. Bert rips out his article, like he did a few weeks ago and the excitement is up! Why else is the excitement up? Heck, with the Tax Cuts, Jobs Act, the dividend increases have been MORE powerful than EVER. In my 9+ years of investing, this has been the best year, by far. Each dividend increase, has more than likely, been superior than the past, in terms of the growth rate. We all know why the dividend growth rate is powerful (if you do not, read this article).
What is even more exciting, is when you have multiple increases that occur – I had 6 companies that announced in April – Rockwell (ROK), Grainger (GWW), Procter Gamble (PG) and Kinder Morgan (KMI). As stated, some are consistent, like Grainger, at 6%. Others, however, blow the hair back, like Kinder (KMI) and announce a 60% dividend increase. There simply is excitement that drums in the air. Bert and I always make the statement, “No way that management decides this year, to stop increasing their dividend”. However, we have been fooled…
The Doubt
Yes, the doubt. There is doubt waiting for the dividend increase to be announced. Typically, such as McDonald’s, you can predict the exact day and time, that they will announce their dividend increase. They announce their dividend increase every 3rd Thursday in September around 4:30PM. It’s true. Book that in your calendar. The only item that may change is the time, but it’s a give or take one hour for their dividend increase. However, the doubt starts to set when a dividend increase doesn’t become announced on the day you expect. That crushes the dividend soul, just a bit. You don’t think you are down and out for the count, as there may still be “days” left in the month for them to announce.
Another example of doubt and despair can occur. A recent example is Kraft-Heinz (KHC). Why? One may ask. Well, the last two years, in August, they increased their dividend. Well, as August came and the dividend increase was on our radar, our anticipation and excitement was sky high. Sadly, August came and… went. The month came and went with absolutely no dividend increase announcement. Kraft did not make an announcement. Guess what? The whole cycle starts over, as now I have excitement that they’ll announce their dividend increase in November. Is this a problem? Do I have dividend investing issues or what?
The relief
The one other emotion that I go through. A great example is International Business Machines (IBM). They have received quite the bad rap and bad press, however, the financials are rock solid – from their income statement to the balance sheet. However, with the negative news and all, they still made that announcement. The air escapes the body and you can wipe the sweat off, the relief has set in and they have now added ONE MORE tally to the consecutive years to their dividend increase streak.
Why is this streak so important, by the way? I am constantly hoping that companies can get to 25 straight years of doing this, to become a dividend aristocrat, which also leads to the unique passion to continue it going forward and becomes a bit of a trademark for that company.
However, to get back to the relief emotion – there is also the scattered type of dividend companies that are out there, aka, those that do not announce on a consistent month throughout the year. Intel (INTC) has been like that recently. Why do I have relief from Intel (INTC)? One year they do February, another they do May or August. The relief that comes when you see an announcement in general during the year, is very “real”. Are you still hanging on during my emotional ride here?
Dividend Increase Emotion Conclusions
I had to let this one out to the community. I have gone through October, 18 days already, and no dividend increase announcements for my portfolio. Will WestRock (WRK) announce? Or will they pass and go to November? Will I go through the roller coaster of dividend investing emotions? I do have a few questions for the community.
1.) How do you cope with dividend increase let down?
2.) How do you cope with managing the anticipation/anxiety of the dividend increase month?
3.) What is your mindset if a dividend increase was to happen (based on history) in the early part of the year but it does not happen? Do you believe it may happen later on?
Thank you everyone! I am REALLY curious if there are others out there, that experience the same emotional ride as I do! After all, the dividend increase is one of the critical reasons why we do this investing. Thank you for reading & stopping by, and (I am changing it up) please companies – announce that dividend for us!
-Lanny