The holidays are coming to a close and we are now officially setting out sights on 2020. One December tradition remains in tact, unfortunately. The Browns fired their head coach. One of these days, the team will find the right coach to lead this team to its first Super Bowl. But we will once again have to continue our search elsewhere! I am off topic. The real reason we are here are to learn about the expected dividend increases in January. Let’s dive in.
Before we jump into the dividend increases, we should explain the why. WHY are we so passionate about dividend increases? The name of the game on our website is Financial Freedom. Thus, to help achieve this, over the years, we have been working our tails off to invest every possible dollar we can into dividend growth stocks to build a growing dividend income stream. We build this income stream by finding undervalued dividend growth stocks that have a history of INCREASING their dividend using the 3 simple metrics of our Dividend Stock Screener.
The impact of dividend increases is real. Want proof? Review our Dividend Income page that lists each monthly dividend income total for the two of us. Dividend increases are a huge part of this growth!
We’re both building the foundations we need, one day and one step at a time. See the foundations here:
- Our Dividend Stock Portfolios showing each individual holding and the dividend income each produces.
- Our Dividend Income page showing each monthly dividend income total.
Actual Dividend increases in December 2019
I always like to review and recap the expected dividend increases from the previous month’s articles. If I spend the time researching these stocks, I should follow through and see how the dividend increases unfolded, right? There were some interesting things to highlight, and we tried to discuss some of them on our Twitter profile in real time.
- Company #1: AT&T (T) – Every year, I get my hopes up that there will be a larger than $.01 per share increase in their quarterly dividend. And every year, I read about how the company just increased their dividend by $.01 per share. I’ll always hope for more though. Maybe it will eventually come after the company pays down their debt.
- Company #2: Pfizer (PFE) – PFE , like AT&T, stuck to their standard $.02 per share increase in their quarterly dividend. I did purchase 1 share of Pfizer in my last batch of purchases, so I am excited to receive this nice dividend increase!
- Company #3: Boeing (BA) – With the bad news about the 737 Max, I’m really not surprised that Boeing did not increase their dividend this quarter. The company’s new CEO has some serious issues to address; and I’m not sure the company’s dividend increase is on the top of the list for them.
- Company #4: Abbott Laboratories (ABT) – I was curious if ABT would match ABT’s 10% increase that was announced in November. It turns out, the company exceeded their mark by announced a 12.5% increase in their quarterly dividend. Check and mate ABT.
- Company #5: ABM Industries (ABM) – It is interesting how many companies have stuck with their traditional, predictable dividend increases. Man, I wish we had some more surprises this month! ABM had a dismal five-year average dividend growth rate (3%) for a company with a low dividend yield. Their dividend increase in December was 2.7%. Right on the money with their average. But with that yield and dividend growth combination, you won’t find ABM on any one of my dividend stock watch list anytime soon.
- Company #6: Realty Income (O) – Realty Income increased their dividend for the 104th consecutive quarter. The increase isn’t large. Just a fraction of a penny. Their monthly dividend increased to $.2275 per share from $.227 per share. The company continues to deliver value to shareholders and we love seeing their dividend grow.
- Company #7 – Mutual Fund Families – It is capital gains distribution for mutual funds. Have you checked your distributions? If not, you should, because you are going to like what you are seeing. Vanguard announced some MASSIVE distributions and I cannot wait to detail them in my December dividend income summary.
Expected Dividend Increases in January 2020
The book is officially closed on 2019 and we can tally our dividend increases for the year. It is time to start calculating those 2020 dividend increases. 2019 saw lower dividend increases than 2018, as the economy slowed. So who knows what to expect for the current year. As always, though, we can’t wait for the ride. Here are the expected dividend increases in January 2020.
- Company #1: Consolidated Edison (ED) – The first article of the year will start with the “old reliable” of Dividend Aristocrats…Consolidated Edison. They are one of our Top 5 Foundation Dividend Growth Stocks. and a company that is represented in both of our portfolios. ED has a pretty low dividend growth rate, averaging a dividend growth rate of 3.27% over the last five years. Further, their dividend increases do not stray too far away from this average. Barring a miracle, I’m not expecting a large dividend increase for us shareholders this year.
- Company #2: Kimberly-Clark Corporation (KMB) – 2019 was a solid year for Kimberly-Clark. Which was impressive given the company did not have the best start to the year. KMB, like so many other companies, saw their stock price soar in the second half though and the company now appears to be buzzing. Still, the company has a relatively high dividend payout ratio. This indicates that the company isn’t going to announce a, surprise, large dividend increase anytime soon. For shareholders, I would expect their streak of low dividend growth to continue.
- Company #3: Air Products and Chemicals, Inc (APD) – APD will announce their dividend increase at the end of January. This isn’t a stock we cover closely due to their lower dividend yield (<2.5%). It is nice to see that the company at least posts a strong dividend growth rate (8.73% five-year average) to compliment their dividend yield. I would expect a dividend increase in line with their average.
- Company #4 – Norfolk-Southern Corporation (NSC) – There were a few years where NSC and other companies in the railroad industry did not increase their dividend. NSC started increasing their dividend once again in 2017. In 2018 and 2019, the company has announced two dividend increases annually. One dividend increase in January and one in July. If NSC continues this bi-annual dividend increase streak, they should announce their first dividend increase this month. Their dividend increases have been strong as well. I entered 2019 with a $.80 per share quarterly dividend and am leaving with a $.94 per share dividend. That’s some serious dividend growth right there!
- Company #5: Intel Corporation (INTC) – Tech is underrepresented in my portfolio. I had a chance to purchase Intel a few years ago and passed. Now, I’m kicking myself everyday for not making that investment. Lanny, on the other hand, has enjoyed the fruits of his Intel investment. Intel’s dividend increase of 5% last year was pretty weak for the tech industry. It’ll be interesting to see if they return to large dividend growth rates or this low dividend growth rate is the norm.
Summary
Another month of awesome dividend increases is expected. Hopefully, we will be surprised and can celebrate larger than expected dividend growth next month. In the end, here, we will continue to make EVERY DOLLAR COUNT and continue finding ways to save money, earn more income, and purchase income producing assets. Financial Freedom is the name of the game folks and we are working our butts off to race towards this goal. Time to get after it.
Bert