Expected Dividend Increases in August 2019

Another month is in the books here.  July was a fun month for us.   We celebrated some birthdays and some All Star festivities in Cleveland.  As the summer heats up, so are the dividend increases.  While overall dividend growth continues to slow in 2019 compared to 2018,  Lanny and I continue to receive dividend increases from our holdings frequently.  We freaking love dividend increases.  That’s why each month, we summarize the dividend increases from the month and look ahead to see which companies may increase the next month.  Here are the expected dividend increases in August 2019:

Actual Dividend Increases in July 2019

Before looking ahead, let’s check in on how the companies included in last month’s article performed.  DId the increase their dividend as expected?  How did the increase compare to their history?  Let’s find out!

  • Company #1: Stanley Black & Decker (SWK) – We recently performed a dividend stock analysis on SWK on Seeking Alpha.  We ultimately concluded on passing on investing in SWK due to the fact that the company’s dividend yield was too low  (<2%) for the recent dividend growth rate (5 year average <6%).   The article was written prior to SWK’s dividend increase.  Sadly, SWK’s measly 4.5% dividend increase only helped validate my conclusion about the company, rather than prove me wrong.
  • Company #2: Walgreens Boots Alliance (WBA) – This is the second consecutive company in this article announcing a 4% increase in their quarterly dividend.  Despite the fact that there is no correlation between the two, whatsoever, it is interesting.  I know it’ll take a couple of years, but I’d love to see CVS match that dividend growth this year.  But hey, they are focusing on paying down debt from the Aetna acquisition instead.
  • Company #3: J.M. Smuckers (SJM) – Woah, woah.  The dividend increases definitely slowed for SJM in 2019.  The 3.5% dividend increase is WAY less than their recent 5-year average dividend growth.  My gut tells me that the company is not immune to the current environment, the one that is taking a toll on the large, consumer giants.  But for some reason, I was still expecting a larger dividend increase.
  • Company #4:  Norfolk Southern Corporation (NSC) – NSC continues chugging along.  The company’s 9% increase is pretty darn consistent with their dividend increase from last year.  I was shocked about this increase, given the whispers about the rail industry in the current economic environment from other companies.  NSC continues to be one of my best investment purchases.
  • Company #5: Delta Airlines (DAL)  – Lanny was all over this 15% dividend increase when it was announced.   DAL continues their streak of impressive dividend growth in a tough industry.  The company is performing much better than two of the company’s peers in 2019, United, American Airlines, and Southwest.  Things just continue to go right for this airline.
  • Bonus Company #1: Occidental Petroleum (OXY) –  This was the most surprising dividend increase of the bunch.  After OXY announced their deal to acquire Anadarko that include a lot of debt, I expected the company to hold off on increasing their dividend for a while.  My assumption is that the deal would be similar to CVS.  The company would add a lot of debt, freeze the dividend, and use all excess cash flow to pay down debt.  Imagine the shock we had when reading about OXY’s 1.3% increase in their quarterly dividend.  Was the increase tiny?  Sure.  But this  was a statement dividend increase to me.  So much so that OXY is back on my watch list one again.
  • Bonus Company #2: Aqua America Inc (WTR) – The under the radar Dividend Aristocrat just announced a 7% increase in their dividend.  WTR doesn’t do anything flashy.  They just dominate in an industry that’s a part of our daily lives.  As the DRIP from the faucet continues to grow, so does the DRIP hitting our investment account.

Expected Dividend Increases in August 2019

I love when the previous month’s summary has bonus dividend increases.  Especially when it is one of the companies in my portfolio!  Now, let’s look ahead to the coming month.  Here are the companies that are expected dividend increases in August:

  • Company #1: Illinois Tool Works (ITW) – It seems like yesterday that everyone was scooping up shares left and right of this company.  ITW had a rough 2018; however, they have rebounded well and performed well in 2019.   ITW announced a 28% dividend increase this year.  I sincerely doubt they match that increase in 2019 considering the slowdown in dividend growth.  But I don’t see why there can’t be a 10% dividend increase in the fold.
  • Company #2: Scotts-Miracle Gro (SMG)  – I’m predicting a nice dividend increase here for SMG.  Why?  The company’s performance in 2019 has been just incredible.  At the time of this article, the company’s stock price is up over 67% in 2019.  You read that right….67%!  If there is going to be one company that announces a larger than anticipated dividend increase, that isn’t a bank, my hunch is that it is going to be SMG.
  • Company #3: Altria Group (MO) –  This will be an exciting dividend increase to follow.  MO has been in the news a lot in the last year, led by their joint venture to diversify away from pure tobacco.  Like SWK, we wrote about MO on Seeking Alpha to perform a detailed dividend stock analysis.   Overall, the company’s payout ratio is below his target dividend payout ratio.  Thus, I am expecting a dividend increase in the mid to high single digit during this month.
  • Company #4:  American Water Works (AWR) – A company in an industry for life, as Lanny described so well in an article in the past.  Those are the kind of industries that are built for long-term dividend success.  AWR is one of the best companies in the water industry.  AWR is a Dividend Aristocrat twice over.  The company’s five-year average dividend growth rate is in the mid single digit range (6.32%).  My gut tells me that AWR’s dividend increase will be in line with their historical figure.  One of their competitors, WTR, set the tone in July.  So let’s see if AWR can post better results.
  • Company #5:  Dover Corporation (DOV) – DOV’s dividend history is very similar to Stanley Black and Decker’s.  The company is a lower yielding company (<2%) with a below average dividend growth rate (5%).  Would it check my boxes?  Not necessarily.  DOV announces their dividend very early in the month.  So we should find out soon whether or not the company’s dividend will exceed, meet, or fall below expectations.

Which companies are you expecting dividend increases in August from?  What companies delivered dividend increases for you in July?  Were you surprised by SJM’s 3.5% dividend increase like I was? Do you love dividend increases like we do?

-Bert

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13 thoughts on “Expected Dividend Increases in August 2019

  1. Oh, I like dividend increases like you do, Bert. I was happy to see a 2nd raise of the year (already!) for FAST and UNP. I also got a 13% raise from my newcomer ZION.
    Looking at August, I’m watching for a couple raises you mentioned in ITW and MO. Given MO’s difficulties in 2019, I’m not sure what to expect.

    • ED,

      I’m glad we have the same love of dividend increases ED. I didn’t realize FAST had their second increase. The railroad sector has stuck to consecutive divvy increases for the last few years. Nice job capitalizing on the banking industry as well and those massive dividend increases! I think MO will have a high single digit increase, but nothing too major.

      Bert

  2. Thanks for the heads up on NSC. I missed that announcement on Friday. And since they do not stick to a recurring annual schedule for dividend increases not sure when I would have figured it out. But that’s why I like this monthly article of yours. I always learn something that I would have missed. I also have BB&T on my expected increase list for August. I know you did a bank update recently, but I don’t remember that BB&T was included. Tom

    • Tom,

      Glad I can help you out! I technically have to give Lanny the credit for reminding me about it haha I am glad you find value in the article. it serves as a great reminder for me to make sure I don’t miss any dividends when preparing. I didn’t include BBT; but I mentioned how Big Banks are increasing like crazy. So I listed 6 of the Top 20 banks. I just missed BB&T.

      Bert

  3. Bert,
    I’m rocking some WTR, SJM, and WBA in my portfolio. I also have a few other growers like BMO, UNP, HSY, K, TGT, and DFS that will be hitting in the next two months. Might be more increases ahead for September too. Loving all the hard work they are doing for us!
    – Gremlin

  4. SJM’s announcement was quite the surprise to me. I was expecting a 6-7% increase, but I can understand why they elected for a 3.5% raise. MO is likely to be my only raise for August, so I’m hoping it’s a good one. I’d be pleasantly surprised if the dividend announced is higher than $0.84.

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