Man the year is flying by! I can’t believe it is almost June and the fact that my daughter is now two months old! As you know, each month is an exciting new chapter in the story of dividend increases. And we summarize and discuss it here on our website. June is going to be a fun month, as there are a lot of names that are expected to announce an increase. Let’s start the process of reviewing and predicting the expected dividend increases in June!
Actual Dividend Increases in May 2019
Before looking forward to June, we like to look back at the previous month’s results. It is nice to check in and see if the companies that were expected to announce a dividend increase actually delivered. May didn’t forecast a ton of dividend increases, especially compared to April. So my expectations are low. Here are the results!
- Company #1: Caterpillar (CAT) – CAT had actually already announced a 20% dividend increase at the time the previous month’s article was released. But this was an excellent way to start the month, that’s for sure! Unfortunately, it did not keep up.
- Company #2: Chubb Limited (CB) – Last month, I noted that CB has a history of increasing their quarterly dividend by $.02 per share. Look at their recent history if you don’t believe me! Unsurprisingly, CB stuck to their plan and increased their quarterly dividend to $.75 per share from $.73 per share. You have to appreciate their consistency, right? Even if it wasn’t a largest percent increase.
- Company #3: Lowe’s Companies, Inc. (LOW) – LOW has not announced their dividend increase at the time the article was released. We will provide an update once the dividend is announced.
- Company #4: Leggett & Platt, Incorporated (LEG) – LEG announced their dividend increase early in the month last year. In fact, they announced a 5.3% dividend increase on the date the article was published. So readers of the previous month’s article were already aware of this dividend increase. Much like CB, LEG’s dividend increase was consistent with their recent history. Would I have liked a much larger dividend increase? You bet! But I am much happier that the dividend increase wasn’t smaller than their average. Which is an excellent transition to the last company on this listing.
- Company #5: Cardinal Health (CAH) – CAH retained their status as a Dividend Aristocrat….barely. The company announced a very low, disappointing 1.01% increase in their quarterly dividend. Born in the buckeye state, I’ll always have a soft spot for Aristocrats headquartered in Ohio. However, as an investor, I was obviously hoping for a larger dividend increase. But times are turbulent in the industry they operate, and that is why I invest for the long haul!
Expected Dividend Increases in June 2019
Some great, some average, and some less than stellar dividend increases were announced in May. It is interesting, there is not a consistent pattern among companies announcing increases. By that, I mean that there hasn’t been a correlation between which companies announce large and small dividend increases. But now that May is in the books, we are ready to look ahead towards June. I am particularly excited for the expected dividend increases in June because I hold many of the companies on the listing. Let’s jump right in!
- Company #1: Kroger Co. (KR) – KR entered my portfolio years ago. It has been a roller coaster of a ride since my initial investment. The company seems to always be in the news, whether it is announcing a new way to combat online shopping or battle against their larger, non-grocery store competitors. The results generate optimism at times, causing the stock price to soar. And cause uncertainty at others. Currently, KR is experiencing a cycle in the latter category. The company is down nearly 12% YTD at the time of this article. The company’s five-year dividend growth rate is 11.75%. It’ll be really interesting to see what management does this year. I’ll be following this dividend increase and earnings announcement closely to determine if I should add to my position.
- Company #2: Target Corp. (TGT) – Target, Target, Target. Now that we have a baby, we have been adding to Target’s bottom line frequently. Luckily, we are shareholders, so I would rather buy our baby supplies at TGT compared to a competitor. And lucky for us, TGT has some awesome deals on baby items and incentivizes consumers to save. But this article isn’t about saving on baby products, it is about dividend increases. Target is constantly battling Amazon and Walmart in the quest to win consumers hard earned capital. Both Amazon and Walmart now offer one-day shipping, so it’ll be interesting to see how Target responds. The company’s dividend growth has slowed after a massive dividend increase in 2014. So reviewing their three-year average dividend growth rate seems more appropriate. Based on the company’s performance this year, I don’t see why their dividend increase will deviate too much from their three-year average of 4.57%.
- Company #3: Realty Income (O) – I always talk about how I forget to include Realty Income in this article. But this month, I finally remembered! The increase will be pennies; however, it is still worth mentioning.
- Company #4: Starbucks Corp (SBUX) – SBUX changed the month they paid their dividend last year. They announced a huge dividend increase in June 2018. The company’s stock price has been on a TEAR in 2019 to-date. My expectations are that the company announces a large dividend increase to follow. Their five-year average dividend growth rate is nearly 24%. If they matched that growth rate in 2019, their quarterly dividend would be between $.44 -$.45 per share. That growth may be tough to duplicate. But as large shareholder, I’d be very excited if that happens!
- Company #5: Medtronic PLC (MDT) – A quiet Dividend Aristocrat is set to increase their dividend in June. The company is a low-yielding, moderate dividend growth company. So I’m not expecting anything to “wow” me to the point of investing in MDT. However, for shareholders, it’ll be a nice dividend increase!
Phew, what a list right there. It turns out more companies are announcing a dividend increase in June than I remember. This article shows why I love dividend investing and why it can be such a powerful tool. Heck, Lanny shows why it is powerful each quarter. Dividend increases added $80+ to his forward dividend income total during the first quarter! It is a lot of fun building an income stream that grows organically. One that grows without lifting a finger. Hopefully these five companies deliver some strong increases in June.
What are your thoughts about the five dividend increases expected in June? How many companies from the list do you own? Did you benefit from strong dividend increases in May? What increases did you receive that were not included on the listing above?
Bert