Expected Dividend Increases in November

I can’t believe this, but there are only two months remaining in 2014.  Holy cow has it been a great year.  As October turns to November, we will once  again review which companies we expect to announce dividend increases in November.  For those of you who are new followers, each month we compile a list of Dividend Aristocrats that we anticipate will announce a dividend increase.  Let’s review the results of our October dividend increases projections and take a look ahead to November!

dividend increases in November

 

Dividend Increases in October

Last month we projected the following Artistocrats would announce a dividend increase.  Did they deliver the great news to their shareholders?

  1. Aflac (AFL)-  TBD.  Since I am writing this article a few days before November, the article will be published before AFL announces their increase.  For the most part, each year they have announced their dividend increase in the last week of October.   So we will be learning about their increase at some point this week.  And trust me, the Diplomats will let you know when the increase arrives because we both are shareholders!  For me, I am especially excited about this increase since I re-upped my position when I purchased $540 in additional stock last week.   As it stands, I currently will received ~$45 of dividend income from AFL.  If the company announces a $.03/share increase like I am expecting, my income will jump to $48.63.  Let’s hope I am right or if I am wrong, I under-estimated the increase!
  2. Cintas Corp. (CTAS)-  CTAS, the industry leader in providing corporate uniforms (via morningstar.com) that pays an annual dividend, announced a 10.3% dividend increase.  Shareholders will now receive a $.83/share annual dividend compared to $.77/share.  The ex-dividend date is coming right around the corner (11/5/14).  So if you were planning on investing because of the dividend, I would recommend pulling the trigger sooner than later.  Overall, a very nice increase for shareholders.
  3. VF Corp. (VFC)- Last month, as we projected VFC’s dividend increase, we mentioned that the apparel giant has been rewarding its shareholders very well over the last few years.  The company had increased its dividend by an average of 18.60% and 12.5% over the last 3 and 5 years, respectively.  Boy did VFC deliver  a great dividend increase again this month as they announced a dividend increase of $.0575/share, or 21.9%!  Another great increase for the low-yield, high dividend growth stock.  Congrats to all the current shareholders!
  4. Visa (V)- Lanny threw Visa into the article behind my back last month!  While the company is not an Aristocrat, V is another great dividend growth stock with a tendency to reward its shareholders with large dividend increases!  Lanny was feeling pretty ambitious and predicted a 25% increase.  While his projection ultimately proved to be too generous, Visa did announce a great increase of $.08/share, or 20%.  Nice job Lanny! (From Lanny to Bert – I at least had the date & timing of the release right, not too upset by 20%, but 25% would have been even better!)
  5. American Electric Power (AEP)– Alright you caught me, this stock was not included on my article last month and is also not an Aristocrat.  However, I am a proud shareholder of AEP and the company announced a 6% dividend increase last month.  The Columbus, Ohio  company is a great utility stock with a 3.76% yield and has been on a tear this year (up 24.46% YTD).  Luckily, I bought shares in the company before this year!

Expected Dividend Increases in November

Wow, the list of Aristocrats that announced a dividend increase last month was filled with a low of low-yielding, high dividend growth stocks.  What I think is most interesting about the fact that so many Dividend Aristocrats are lower yields stocks is that when most people think of dividend investing, the first thought is finding a stock with the highest  yield.   Finding a strong, high-yielding stock is important during the income accumulation stages of your portfolio and is critical for getting the dividend snowball rolling.   That was my first focus when I began building my dividend growth portfolio and my first purchases were stocks such as PM, RDS-A, AEP, KRFT, T (even if some of them make our top 5 dividend stocks for a beginning portfolio).  Purchasing these stocks really jump started my efforts to accumulate dividend income and packed a very nice punch for my portfolio.  As time went along, I started adding lower-yield stocks such as AFL, DEO, DOW, and SMG that provide their shareholders with large dividend increases annually.   See our portfolios here.  As my portfolios matures I will continue to enhance the blend of dividend stocks.  For a great read on this topic, view Dividend Mantra’s article back in June about this very topic.   It helped inspired me to diversify my  dividend portfolio between the classes of dividend stocks.

So I just went off on a little rant.  It is time to bring the focus back to the main topic of this article, expected dividend increases in November.  Which Aristocrats are expected to announce an increase in the upcoming month?

  1. Automatic Data Processing (ADP)- The payroll processing giant currently yields 2.52% and is set to announce another increase in the middle of the month.  Over the last three years, ADP has averaged a 10% annual dividend increase annually.   The company has a payout ratio of 47.5% and has ~$8.33  cash per share (per www.finviz.com).  Thus, ADP has the room to announce another 10% dividend increase.  The question is…will they?
  2. Becton, Dickinson & Co (BDX)- BDX engages in the product and sale of medical equipment.  Currently BDX boasts a 1.73% dividend yield.  Similar to ADP, BDX has increased its dividend ~10% annually.  BDX is set to announce its increase in the last week of November and I would anticipate the company announces an increase in line with its recent 10% average.
  3. Brown-Forman Corp B (BF.B)- Are you a fan of Jack Daniels or Southern Comfort?  If so, BF.B may be the stock for you.  Of course, Lanny and I own shares in BF.B’s rival Diageo, so we may be a little biased if asked any questions about which company to purchase.  BF.B currently touts a 1.57% yield with a 36.2% payout ratio.   Over the last three years, the company has been increasing the rate it increases its dividend and has averaged an increase of 9.75% compared to the five-year average of 8.68%.  I know that doesn’t seem like a lot, but years 4 and 5 had dividend increases of only 6.66% and 4.33%, respectively.   With a great cash position and a low payout ratio, I would expect an increase close to the 3 year average of 9.75%.
  4. Emerson Electric Co (EMR)-  The industrial giant EMR has increased their dividend by an average of 5.56% over the last five years.   Interestingly, I would have expected a company with a yield below 3% (Currently 2.76%) to have a higher annual increase.  EMR is set to announce its increase in the first week of November, so we will know pretty soon whether the company has some good news hidden up its sleeve.
  5. Hormel Foods Corp (HRL)- HRL is another low-yield, high dividend growth stock.  The company has a current yield of 1.52% and has averaged dividend increases of ~16% over the last five years.   The increases are great considering the company’s low payout ratio of 33%, so there is still room for the dividend to continue to grow.  The company usually announces this increase in the last third of the month, so will have to wait  a few weeks to hear the announcement.  However, I expect the company to grow their dividend at a similar rate to the average.
  6. McCormick & Co (MKC)- Open up your spice cabinet and you should find many of the products offered by the Dividend Aristocrat.  MKC has a current yield of 2.14% and has averaged a dividend increase of 9% over the last 5 years.   MKC has a current payout ratio of 45%, so there is room to grow the dividend if management desires.
  7. Sysco (SYY)-  SYY is a stock that I always have on my Watch List.  I like the company’s line of business (food distribution),  the fact the industry has a lot of barriers to entry, and the company’s yield 3.05%.  However, what prevents me from pulling the trigger is a high payout ratio (72%), a high P/E Ratio (24) and the company’s performance YTD (+8.6%). While  some may debate that SYY may warrant a premium, I think there are better opportunities in this current market (See our October Watch List).  Back to focusing on dividend growth.  SYY has increased their dividend by $.01/share annually over the last five years, a modest growth rate.   With their current payout ratio, I would not anticipate a surprise increase of greater than $.01/share and I expect the company to continue its annual $.01/share trend.

November will be an exciting month for Dividend Aristocrat owners.  Since I started this series in May, November has definitely produced the highest number of Aristocrats that announce a dividend increases.  It will give us something else fun to follow in the next several weeks.  Do you own any of these stocks?  What stocks in your portfolio that are not Dividend Aristocrats are expected to announce an increase?  Are you looking to buy any of the stocks on this list?  If so, why?

Bert

 DISCLOSURE: I DO NOT RECOMMEND ANY DECISION TO THE READER or ANY USER, PLEASE CONSULT YOUR OWN RESEARCH. THIS IS ACTUAL DATA, ANALYSIS, HOWEVER I BASE NO INVESTOR RECOMMENDATION.  THANK YOU FOR YOUR UNDERSTANDING.
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7 thoughts on “Expected Dividend Increases in November

  1. Bert,

    Great rundown here!

    I was happy with that V increase. It was more or less in line with my expectations. I think that kind of growth should continue for quite a while yet.

    I’m excited to see what AFL has in mind. Should be another strong raise for shareholders!

    Appreciate the mention. Glad to see you filling the portfolio out a bit as it matures and grows. Keep up the great work!

    Best regards.

    • Thanks DM. I always enjoy the opportunity to share an article that helped me grow as an investor. It seemed like a natural fit after reviewing a long list of low-yielding, high-dividend growth stocks. I still amazes me how many Artisocrats fit into this category. Very, very eye opening. When I have more capital avialable I will definitely start to take advantage of the stocks I have discovered while compiling these monthly articles.

      V has had some very impressive dividend growth over the past few years. It is crazy that 20% did not meet Lanny’s expectations. I know he his still thrilled iwth an increase, but man does he have high expectations haha.

      Thanks for stopping by!

      Bert

  2. I guess time will tell about our dividend increases going forward. While AFL is my largest holding I don’t expect a stellar raise. I hope I’m wrong but quite frankly I’ll be happy with any raise they give. VFC has been my best performing stock for a long time and I would love to purchase more but I can’t get past the current valuation of the stock. It still has a growth story and I may be missing out but I’d like to see the stock under $60 before I add more. Still, I love it long term. Thanks for sharing.

  3. Bert,

    thanks for the quick overview.
    Although I like most of the companies mentioned.
    I almost initiated a position in AFL today, but choose to go for CSCO.
    Next year I will probably load up on some of the names.

    Thanks for sharing.

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