Expected Dividend Increases in January 2019

Wow.  I had to take a second to stop when I typed the title of this article out.  I cannot believe it is already 2019.  Time continues to fly by and before I know it, I’ll be turning 30 in July.  2018 was such an incredible year for dividend investing and it was unique to watch from a investor’s perspective.  We started with the incredible surprise dividend increases at the beginning of the year and ended with a turbulent market (to say the least).  Lanny and I were talking about it, but I can’t remember the last time there were so many wild swings on daily basis.  But as always, we are prepared and ready to take a methodological approach to investing.   I’m starting to ramble, so let’s get back to the task at hand. Each month, we do our best to highlight as many companies that are expected to announce a dividend increase that month.  Since we love dividend increases and follow them so closely, we love trying to share the news with you!   Here is our listing of expected dividend increases in January 2019!

Actual Dividend Increases in December 2018

Before looking ahead, I always like to review the actual results from the prior month.  After all, what fun would it be if we didn’t follow-up on the results?  In December, we predicted that five companies were going to increase their dividend during the month.   And for once, all of the companies have made their announcement by the time I started writing this article! Victory! On top of it, I have three bonus dividend increases that were not included in last month’s article that I am adding to the list. However, as a preview of the results, here is a tweet that I authored one day because I was so pumped up about the crazy dividend increases that were being announced this month!

  • Company #1: AT&T (T) – You know what’s funny?  Every year, Lanny and I try to convince ourselves that AT&T is going to increase their quarterly dividend by an amount greater than $.01/share.  And each year, the company proves us wrong.  2018 was no different and AT&T stuck to the plan.  Their quarterly dividend increased to $.51/share from $.50/share.  Maybe next year will be the year the company changes things up!  Still, couldn’t be happier this company is in our dividend stock portfolios.
  • Company #2: Pfizer (PFE) – In my article last month, I mentioned that PFE has a 7.2% 5-year average dividend growth rate and the company’s previous dividend increase was 6.25%.  PFE must understand something about consistency here, because the company announced a 5.9% increase in their quarterly dividend.  Sure, this is lower than their average; however, it is pretty darn close and in line with the company’s recent history.  PFE lost their Aristocrat status during the financial crisis; however, the company is slowly clawing its way back.
  • Company #3: Boeing (BA) – Boeing has absolutely CRUSHED it with their dividend increases in recent years.  Guess what, 2018 was no different.  Boeing announced yet another 20% increase in the company’s quarterly dividend.   What’s funny is that this is actually below the company’s 5-year average dividend growth rate.  Go figure, right?
  • Company #4: Abbott Laboratories (ABT) –  We mentioned that ABBV announced a huge dividend increase earlier in the year and were curious if ABT would follow the other half of the formally consolidated company’s lead.  While ABT announced a great dividend increase, ABT’s increase certainly wasn’t at the same level as ABBV after considering their multiple dividend increases.  However, can you really complain when a company increases their quarterly dividend by 14.3%??  Congrats ABT shareholders!
  • Company #5: ABM Industries (ABM) – The company buried their 2.9% dividend increase in their earnings release.  The company’s dividend yield is currently around 2.25% at the time of the article, so I would have expected that the company’s dividend increase would have been a little larger for this low yielding dividend growth stock.
  • Bonus Company #1:  Norwood Financial Corp (NWFL) –  Lanny and I own several community banks based on our background.  One of those banks announced a surprise dividend increase this month and the two of us were pretty excited about this one.  NWFL increased their quarterly dividend 9.1%, to $.24/share from $.22/share.  It is always fun receiving a dividend increase.  But it is THAT much more fun receiving a surprise dividend increase!
  • Bonus Company #2: Realty Income (O)  –  I’m kind of kicking myself for not including this dividend increase in my last article. Maybe I’ve just become so accustomed to receiving the quarterly dividend increase from Realty Income that I never expect it to come.  Or, it could be the fact that the dividend increase is usually a fraction of a penny and the increase adds a dollar or two to my forward dividend income.  Regardless, I still need to remember to include them going forward.  This month, Realty income increased their monthly dividend to $.221/share from $.2205/share.   Interestingly, that was the 99th dividend increase since the company’s inception and it looks like they will enter the triple digit club in the first quarter of 2019.   Get pumped!
  • Bonus Company #3: Waste Management (WM) –  To be honest, Waste Management is not a company that I closely follow.  The only affiliation I have with the company is that I see the company’s trucks leaving my company’s parking lot regularly.   But I was in the zone one day, researching companies, and I saw that Waste Management increased their dividend by 10%.  That had to be welcomed news for the company’s shareholders, as the company’s dividend increases have been less than stellar.

Expected Dividend Increases in January 2019

If you all recall, January 2018 was really when the madness started to happen.  Post-tax reform, companies were announcing surprise dividend increases left and right.  While I’m certainly not expecting companies to announce these kind of dividend increases annually, I will be curious to see what companies do in Year 2 of the lower corporate tax environment, countered by an increasing interest rate environment.   Will we revert back to normal?  Or will we still see generous increases to shareholders?   Who knows?  But let’s start with trying to predict some of the companies that are expected to announce dividend increases in January!

  • Company #1: Consolidated Edison (ED) –  This is one of our favorite companies.  Hence, Consolidated Edison is one of our Top 5 Foundation Dividend Growth Stocks.  The company has been around forever and increased their dividend for a long-time.  On top of it, they are a major player in a highly regulated utility sector.  What’s not to like?  Their 5-year dividend growth rate isn’t terrible, 3.06%, and we have no reason to believe that ED won’t continue their impressive annual dividend increase streak!
  • Company #2: Kimberly-Clark Corporation (KMB) –  I do love consumer staple stocks.  I own a lot of them and on top of it, I added Smuckers to my last watch list.  KMB was a company I should have paid closer to in October; however, their price has jumped up since then.   Like ED, KMB doesn’t have the best dividend growth rate (5-year average is just over 4%).  Hopefully this is the year KMB reverses the trend and knocks their shareholders’ socks off.
  • Company #3: Air Products and Chemicals, Inc (APD) –  APD is a Dividend Aristocrat that I have not followed closely over the years. However, APD’s yield is under 3% and their 5-year average dividend growth rate is close to 9%.   If the company can deliver a double-digit percent increase, I’ll start paying closer attention to them.   They operate in a sector that is under-represented in my dividend portfolio.
  • Company #4:  AO Smith Corp (AOS) – AOS is another company that is off my radar.  Their performance in 2018 has not been stellar, as the company is down over 30% year-to-date.  Now, AOS is yielding over 2%; much higher than their historical dividend yield.   The company announced an impressive 22% dividend increase last year.  I’m curious if that will continue after the company’s stock price fell so much this year.
  • Company #5: 3M Corp (MMM) – This is a potential dividend increase.  Typically, 3M increases their dividend in February.  However, last year, 3M jumped the gun and announced their dividend increase at the end of January.   Last year, 3M’s dividend increase was strong and their competitor ITW announced a huge increase in the third quarter.  Will 3M deliver once again for shareholders?  I sure hope so, as 3M is one of my favorite holdings!
  • Companies #6 –  The Banking Industry –  Last, but not least, the banking industry.  Last January, there were a lot of banks, both large and small, that increased their dividend in January.  We’ve seen banks continue to deliver strong increases throughout 2018.  With rising interest rates and a rising cost of deposits, how will banks respond in 2019?  Will they continue to grow their dividend or reign in their dividend increases based on this new operating environment?

summary

Hopefully 2019 will start off in the same manner as 2018.  If so, we are going to be in for quite the roller coaster of the ride.  Dividend increases are such an important aspect of our investing strategy and we love following them closely.  Sometimes it makes us anxious, other times it makes us excited, and other times, we leave angry that the increase wasn’t quite as large as we were expecting.  That’s part of the game, and that is why we love playing the game.  Let’s have a safe and happy new year and start 2019 off on the right foot!

-Bert

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16 thoughts on “Expected Dividend Increases in January 2019

  1. Happy New Year Guys. I have a few others on my list for January increase announcements that I’m looking for.
    CINF
    MDP
    INTC
    And usually we get the largest dividend increase annoucement from O in January of their quarterly increases.
    Tom

    • Tom,

      Happy New Year to you as well! Let’s make 2019 count and get us that much freaking closer to financial freedom! Great list for increases right there. I don’t own INTC, unlike Lanny, so they aren’t on my radar in terms of dividend increases. Thanks for letting us and the remainder of the readers know.

      Bert

  2. Amazing guys – so many great quality companies to consider! I’ll certainly be having a closer look at some of these in 2019. Hope next year is another great dividend income year for you guys!

    Cheers, Gary

  3. December was a great month for dividend increases! I can’t wait to see ED’s dividend increase. They just billed me for my electricity for the month. The bill was $29.62 and but they also paid me $41.47 in dividend income! It is like having free electricity for the month plus bonus pay, lol. Thank you for the post Bert! And have a Happy New Year! 🙂

  4. Although I’m only expecting 3 dividend increases in January, these raises are expected to increase annual forward dividends by $0.874. Moreover, I’m expecting at least 3 strong increases in February, with more of my increases actually coming in the spring months.

  5. APD is the steadiest company I know of in the Materials sector. However, I’m not happy with their decision to build a fancy new headquarters – the current campus has plenty of space.

  6. December was the weakest dividend raise month of the year for me – only O and WPC (which are rather small increases since they raise quarterly instead of annually). A tad disappointing given all the dividend increase activity you noted, Bert. However, I hope that Jan. and Feb. make up for it, as they were huge for me in 2018.
    In January, I’m expecting the raise from APD, as you noted, but also planning to see an increase from Aflac (AFL), I suspect I’ll also see increases from Blackrock (BLK) and Fastenal (FAST) unless they change their normal dividend increase announcement month due to having two dividend raises last year. As Tom noted, O should deliver their largest dividend increase of the year, too. Not sure what I’ll see from Bank OZK (OZK) given their bad year, and I suspect nothing from Hanesbrands (HBI) or Omega Healthcare Investors (OHI) given their current dividend freezes.
    The potential is there for something big… we’ll see what transpires!

  7. I am looking forward to a KMB increase, and the MMM increase would be nice too. Other than the MDP and O increases that Tom mentioned, I am also looking for an increase from CMS Energy in January.

    Last year I missed a whole bunch of increases that were early in the year due to when I started my portfolio, so I am really looking forward to having a full 12 months.

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