I alluded to this fact in my article last month, but I have now officially completed a 12 month cycle in my expected dividends increases article! This has been one of our more consistent articles in our one year of blogging and I have enjoyed summarizing Dividend Aristocrats that are expected to announce dividend increases in the upcoming month. Why? Because it has introduced me to many new dividend paying stocks that I never considered before because either the yield is too low or they do not receive the same coverage as your Walmarts, PGs, JNJs, etc. So now that we completed one 12-month cycle, let’s begin a new chapter and review Dividend Aristocrats that are expected to announce a dividend increase in June 2015!
Dividend Increases in May 2015
As always, let’s review the listing of Aristocrats expected to announce an increase from last month’s article to see if the companies followed through and kept the streak alive!
- Clorox (CLX)– A giant in my favorite dividend industry…consumer staples. You can find CLX products throughout every household, which is exactly why I would love to invest in this company one day. Earlier in the month CLX kept their dividend increase streak alive and increased their quarterly dividend $.03/share from $.74/share to $.77/share, or 4.05%. This increase is disappointing when compared to their 3-year average growth rate, which is ~7%. But a smaller increase could be anticipated considering CLX has maintained a relatively high payout ratio (near 70%), which does not leave management too much room to continue to grow their dividend at a high single digit rate. Could it be done…absolutely, but you don’t want to sacrifice dividend safety in the process.
- W W Grainger (GWW)– GWW is considered one of our Top 5 low dividend yield, high dividend growth stocks and prior to this dividend announcement the company has sported an impressive five year dividend growth rate of 18.64%. Yikes! After looking into the dividend increase, it appears that GWW historically increases their dividend in April, not May! I sincerely apologize everyone and I’ll make sure to make a note of this for the April 2016 dividend increases article. At the end of April, GWW announced a quarterly dividend increase of $.09/share from $1.08/share to $1.17/share, or 8.3%.
- Lowe’s (LOW)– Another one of our top 5 low dividend yield, high dividend growth stocks here. LOW is now on my radar after their recent ~5% pullback from releasing earnings and there is a decent chance I will initiate a position if the price continues to fall. While LOW released their earnings last week, it appears they hold off on announcing their dividend increase until the very end of the month. So it looks like the dividend increase is TBD. I’ll update everyone during the next monthly article!
- Pepsi (PEP)– Man, another prediction that was not my finest. As it turns out, PEP actually announced their quarterly dividend schedule, including the increase, back in a February press release! So from now on, I’ll have to move the Pepsi expected dividend increase to February, not May. Once again, I am sorry everyone! As I mentioned in May’s article, PEP announced a quarterly dividend increase of $.0455/share, or 7.3%, which is right in line with their recent average dividend increase. I can’t wait to own stock in this company one day!
Dividend Increases in June 2015
I had a really fun trip down memory lane for a second and looked at one of the first articles on our blog to help me identify which Dividend Aristocrats are expected to announce a dividend increase in June 2015. See our list below to view which Aristocrats made our list.
- CR Bard Inc (BCR) – I’ll be the first to admit that I am not too familiar with BCR, but as I mentioned earlier, this is exactly why I love preparing this article monthly. It introduces me to a lot of dividend stocks that I am not familiar with, such as BCR. According to Morningstar.com, BCR “CR Bard Inc manufactures, distributes and sells medical, surgical, diagnostic and patient care devices. The Company sells its products to hospitals, individual healthcare professionals, and extended care facilities.” I like the industry in which BCR operates for sure, especially as the baby boomers are set to retire. Over the last three years, BCR has 3 year average DGR of 5.01%, not as high as I would like to see for a company yielding below 1%. It makes sense why the company was not included in our listing of top low yield, high dividend growth rate stocks.
- Medtronic (MDT) – Another business to business company in the healthcare sector. Compared to BCR, MDT sports a high dividend yield and 3 year average DGR at 1.57% and 7.85%, respectively. However, once again, the dividend growth rate is lower than we would like to see fora company yielding under the average S&P 500 yield.
- Target (TGT)– TGT just announced a great quarter, continuing the tear they have been on over the last year. I am very jealous of Lanny, who purchased shares of TGT at the perfect time after the stock price dropped as a result of the security breach. Great pick up Lanny, maybe I should have listened to you when you told me to buy the stock. I’ll have to be less stubborn next time! Not only has TGT’s stock price been impressive recently, but their 3-year DGR is equally, if not more, impressive. Over the last 3 years, the company’s average dividend increase has been ~20%! Amazing. While that may be hard to maintain going forward, the company’s current payout ratio is hovering around 50%, so there is room to grow the dividend by a double-digit percentage without impacting the dividend safety. We shall see!
It has not only been a fun year writing this monthly series, but blogging in general. We recently celebrated our blog’s one year anniversary and I cannot say enough great things about the dividend investing community. My eyes have been opened to so many great dividend stocks and I have learned a ton all of you out there. Heck, without blogging, I would have had no idea that two of the three Dividend Aristocrats on this list (BCR and MDT) were such great dividend stocks. While they are not on my watch list now, they may be after this month if they announce a larger than usual dividend increase. Ideally I am looking for a double-digit increase here! Hopefully you all have learned as much as I have over the last year and have found this monthly article useful! If not, please let me know what else I can do to provide more information!
Do you own any of the stocks on this list? What are your thoughts about CLX, GWW, LOW, and PEP’s dividend increases this month? Did their announcements convince you to buy (Or Lowe’s pending announcement)?