Expected Dividend Increases – December 2017

I cannot believe that I am writing this post for the final month in 2017.  So many great things have happened in 2017 and I cannot wait to see what 2018 has in store for all of us.  As investors, we have received some great (and some poor) dividend increases during the year.   For the last time in 2017, I have compiled a list of dividend paying companies that are expected to announced dividend increases in December.  Lanny and I spend so much time monitoring dividend announcements for a ton of companies, so we like to share some our research with all of you.  This list isn’t all-inclusive, that would be impossible; but it includes the majority of the companies that we will be monitoring closely over the next 31 days.   Now the fun begins. Let’s dive in and see which companies are expected to increase their dividend in December.

actual dividend increases – November 2017

Before looking ahead to December, I wanted to quickly summarize the results of the companies that were mentioned in the November edition of the series.   The results were better than expected, so I cannot wait to dive in and share some of these dividend increases with all of you.  I’m getting excited typing them!

  • Starbucks (SBUX) –  When I wrote this article last month, I cited SBUX’s near 25% dividend growth rate and thought to myself “Man this is going to be difficult to maintain.”  But you know what?  SBUX delivered a 20% dividend increase in November and was pretty darn close to their average increase.  My wife and I were pretty excited because as mentioned in my recent dividend income report, this added $5.53 to our forward dividend income.  Congrats to all other SBUX shareholders our there as well.
  • Sysco Corporation (SYY) –  SYY’s  increased their quarterly dividend 9%, which is an excellent surprise given their recent five-year average dividend growth rate of 4% prior to this announcement.  Another exciting announcement for shareholders!
  • Hormel Foods Group (HRL) –  Lanny was pretty darn excited about this increased considering he recently initiated a position in Hormel .   While their 10.3% dividend increase this quarter was below their recent five-year average of 17%,  it is great anytime you can receive a double-digit increase.  and his article gave a lot of great detail about this Dividend Aristocrat and their dividend history.   This increase added $3.45 to his forward dividend income totals as well.  Congrats Lanny and all the other owners out there!
  • Automatic Data Processing (ADP) – This was just a great month for dividend increases as ADP also exceeded their recent average growth rate when they announced their dividend increase last month.  Much like HRL, ADP announced a 10.5% increase in their quarterly dividend!  Again, another great dividend increase in the books!
  • Lancaster Colony Corp (LANC) –  Last, but definitely not least, another dividend increase from the buckeye state.  LANC announced a 9% dividend increase last month and their ex-dividend date (12/7) is coming right around the corner.

Expected Dividend Increases – December 2017

I cannot believe that a 9% dividend increase was the lowest percent increase in the month of November.  This has to be one of the most positing growth rate summaries I have ever produced.  Which leaves me VERY excited for December.  Now, drumroll please. Time to dive in and see which companies are expected to reward their shareholders with a nice dividend increase for the holiday season!

  • AT&T (T) – I’m not going to beat around the bush here.  I CANNOT WAIT FOR THIS INCREASE.  Now that my wife and I own almost 175 shares of AT&T combined after our recent purchase, this dividend increase is going to have a HUGE impact on our forward dividend income totals.  The one funny thing is that AT&T’s dividend increase is rather predictable and the company has increased their quarterly dividend $.01/share for as long as I can remember.  So I am not expecting anything different in 2017.  But I can always hold out hope for a surprise, right?
  • CVS Health Corporation (CVS) – I added CVS to my portfolio in 2017 and I would love to continue to build this position.   CVS has been a dividend growth machine over the last several years and has regularly announced double-digit dividend increases.  Unfortunately though, CVS appears to have halted their dividend growth as a part of their recent merger agreement with Aetna to use excess cash flow to pay down their outstanding debt.  What a bummer!  But hey, I wanted to keep them in this article to help bring this dividend freeze to the attention of all of you.
  • Pfizer (PFE) –  Yet another stock that Lanny and I both own.  Man this is going to be a very exciting month for us!   PFE has increased their quarterly dividend $.02/share for the last five years and I do not see any reason why this would change in 2017.  If the company continues this trend, we would receive a 6.25% increase.  Not too bad, but man am I hoping for a double-digit increase.
  • The Boeing Co. (BA) –  Holy smokes!  Much like CVS, BA has been posting some insane dividend growth rates recently.  BA increased their quarterly dividend 30% last year alone.  I’m expecting big results here considering BA’s stock price is up over 70% year-to-date.  Even though I don’t own shares in this company, I cannot wait to see the results.
  • Abbott Laboratories (ABT) –  Finally, we will finish out listing with a Dividend Aristocrat.  ABT has increased their quarterly dividend for 45 consecutive years and I have no reason to believe that streak is not going to be kept alive in December.   Last year the company had a tiny increase in their quarterly (from $.26 to $.265), so let’s hope that management delivers with a larger increase this month!

Do you own any of the five companies listed above?  Are you expecting dividend increases from any companies that I was not able to include?  I know there are more dividend increases out there, so let me know!   What did you think about the dividend increases announced in November?  What dividend increases did you receive and what were the amounts?  Lastly, ARE YOU AS EXCITED AS WE ARE FOR THE BEST DIVIDEND MONTH OF THE YEAR?

-Bert

Facebooktwitterredditpinterestlinkedinmail

33 thoughts on “Expected Dividend Increases – December 2017

    • Jack,

      I’m very interested to see how this combined entity performs. You’re right, it has the chance to be a game changer and I’m just imagining the benefits and bundles that the combined entities will be able to offer their customers.

      Bert

  1. Hey Guys, I think you have captured the big ones. I was very happy with the ADP and SYY increases. I am looking forward to T, PFE and ABT like you. So, so sad I have missed out on BA. Looked at it many times and always thought it was too expensive with a low yield. I can say the same about SBUX. Can’t win them all. Tom

    • Tom,

      Glad you were able to benefit from ADP and SYY. Man, you’ve listed five companies that you are excited for. Hopefully you own all five and hold such strong companies in your portfolio. I feel the same about BA, but I’m guessing there will be another opportunity one day. Next time, we will know to take advantage of a dip! Thanks for the comment.

      Bert

  2. Hey Bert
    Great companies providing you with very solid organic dividend income growth. As I see, it has been a very succesful investment year, congrats!
    I particularily like Pfizer and Abott Laboratories on your December list. There is a lot to like with the healthcare/pharma sector.
    I expect December to be a solid dividend month with nice contributions (around USD 300) from holdings in the energy sector such as RDS, CVX and XOM and of some consumer staples like J.M. Smucker and Imperial Brands.
    As the bulk of my investment portfolio consists of Swiss holdings (Nestlé, Novartis, Roche, Swiss Re, Zurich Insurance, ABB etc.), passive cash inflows are heavily concentrated on the second quarter of each year.
    As things stand, I am well on track to hit my “2017 passive income goal” of the total amount of USD 5’000.
    Have a great finish of the year and all the best!
    Cheers

    • Shaper,

      Sounds like you are in for a great month. And congrats in advance for hitting your goal. How exciting I do think it is interesting how Swiss companies pay one large dividend rather than evenly throughout the year. Nestle has a big presence in my city, so I’m always looking at them as a potential investment opportunity! Now, lets see if PFE and ABT can deliver some nice shareholder returns for us 🙂

      Bert

  3. I too am looking forward to the dividend increase of T. I’m currently sitting on 186 shares so a 2% increase is going to hit home pretty nicely. I don’t think we will see any surprise increases however as the company is trying to undergo a radical change and also fighting desperately to get this merger done. If the merger does go through debt is going to be to the ceiling and I don’t think management wants to increase cash flow beyond the normal 2% growth they have been giving us shareholders. Either way, I’m happy sitting in the shadows collecting my 5% yield.
    Cheers.

    • DD,

      Wow. A $.01/share increase in their quarterly dividend will have a HUGE impact for you. I’m sure you are waiting at the end of your seat for that announcement. I’m always optimistic and am hoping for a $.02/share increase, but your assessment is probably the correct one. But I guess you never know haha

      Bert

    • PCI,

      Oh I wish I owned all of these companies. Unfortunately though, I only owe a few. Debt can be troubling if not managed correctly or if there is a sudden decrease in their revenue stream. Do you have a target date for when you think you can add them?

      Bert

  4. Great article and nice summary. I am very much looking forward to SBUX and T increases given my rather large positions in these companies.

    CVS is also a large position but I don’t think I will add on their recent price slump. I think (fear) that their dividend growth will slow significantly in the coming years due to their Aetna plans. Pretty sure it will all work out in say 5 to 10 years though 🙂

    • Thank you very much Tall Investing! That SBUX increase must have been huge for you given your large position. How much additional forward dividend income did you end up receiving? I hope you are wrong about CVS’s stalled dividend growth, but it wouldn’t surprise me given their recent announcement post acquisition and the mountain of debt the company has as a result of the acquisition. As you said, short term it may be rough, but long term it should be okay.

      Bert

  5. I knew a lot of people wouldn’t be happy about the CVS statements in the DGI community. It’s hard to say whether the move was good or bad but it does speak to the changing mindsets in the healthcare industry. Five years from now, it’ll be large companies that encompass every part of the healthcare spectrum. UNH started it and now CVS/Aetna are following suit.

    • TITM,

      This move is so large and so different than other mergers that you are right, it is impossible to see how this is going to shake out or whether this merger will be successful in the long run. Time will tell. And the one thing I hope is that CVS’s dividend growth will find itself again in a few years and we aren’t stuck with a company that sees their dividend flatline during the period. I’ll be interested to see how this one shakes out!

      Bert

  6. December is looking much quieter for me on the dividend front compared to the last couple of months. The only two raises I was expecting outside of CVS (which won’t as noted above), are WPC and ENSG, both of which already announced small raises. So nothing to get too excited about, but I’ll take it. I wish I was an owner of BA, but like you said, maybe an opportunity will come our way in the future.

    • ED,

      Well, while you are not getting excited about dividend increases, I am sure that I am going to be excited about all the dividends you are receiving along the way 🙂 I would love to look further into BA if an opportunity presents itself. However, that company does not look like it is going to slowdown anytime soon.

      Bert

  7. I was able to reap the benefits of the HRL raise and plan to keep increasing my position. I also look forward to getting an increase from PFE. Only time will tell how much they decide to increase it. Thanks for sharing.

  8. Thanks for your sharing your thoughts. On your questions:

    – (1) we do have exposure to these holdings but all via funds. We’ve recently began looking at individual securities, but 99% of our net worth is currently in funds. This will begin to change shortly. It’s nice to see companies increasing their dividends – especially an aristocrat like Abbott.

    – (2) November was a slow month (most of our funds pay our the 3rd month of each quarter); I won’t only purchase a security for its distribution schedule, but it is interesting to consider utilizing quarterly paying securities with their distributions in the 1st or 2nd month of the quarter.

    – (3) And, yes! We’re very excited for the best dividend month of the year.

    • Mike,

      Thanks for the detailed comment! That’s the benefit of these funds. Sure receiving one off dividend increases is nice, but think of how many dividend increases are built into your funds 🙂 I don’t purchase a security based on when they are paying a dividend. That is never a final deciding factor. But I will use it to influence the timing of a purchase if I determine I want to purchase the company and have to make a quick decision before an ex-dividend date.

      Take care and we look forward to further interactions!

      Bert

  9. The CVS acquisition news changes a lot. The dividend freeze is a bummer but it’s highly warranted considering the amount of leverage the resulting balance sheet would be buried under. As a debt prude, I’m still agnostic about the whole deal. I recently sold a put option on CVS right before the acquisition news was announced. It expired out of the money last week and I’m not sure if I want to renew the contract now considering the debt that’s being projected.

    SBUX probably can’t keep up 25% growth based on their current FCF but double digit raises are well within their means for the foreseeable future.

    If you project the TTM cash flow and CapEx as being FLAT over the next 5 years (low probability IMO), they could easily pay 15% annual raises AND completely pay off their long-term debt. So there’s a cushion there if they don’t have any cash flow growth. Add even a little growth to that equation, and the 20%+ raises come quickly back into play.

    • Catfish,

      Thansk for stopping by and the comment. The dividend freeze is definitely a bummer. The company is taking on a lot of debt in the deal. At least management is focused on paying down their debt now while maintaining their dividend rather than trying to increase their dividend and ultimately have to slash it to pay down their debt (aka KMI). You’re right, a 25% dividend growth rate will be difficult to maintain, unless of course earnings grows by 25% annually. Hopefully they find themselves on the optimistic side of your figures 🙂

      Bert

  10. Loved seeing that 10% increase from HRL. I know a lot of people that have them in their portfolio. Looking forward to seeing if T will raise. That would be huge for everyone that just bought on the last dip. Should be a lot of announcements going into the end of the year as well as the beginning of next. Will just have to wait and see I guess. Thanks for sharing.

    • Daze,

      I’m mad I didn’t hop on the HRL train when the opportunity was right in front of my face. Luckily Lanny did, so at least one of the authors on this website will reap the rewards haha

      Take care and lets hope for a fun December!

      Bert

  11. I agree we’ll only get a 1 cent raise from AT&T. Hopefully we’ll get more next year, but they have a lot of cash tied up until there’s a decision on the Time Warner merger. I got a 15% raise from Amgen and 20% from Zoetis, as well as a special dividend from CME Group. Expecting a small increase from Realty Income as well.

Leave a Reply

Your email address will not be published. Required fields are marked *