Expected July Dividend Increases

Hey everyone.   It’s that time again, to guess which companies will announce a Dividend Increase!  As a dividend growth investor, I enjoy seeing which companies increase their dividend and attempting to guess the announced increase.  As we approach the final business week of the month, we will project which Dividend Aristocrats will announce a dividend increase in July based on their dividend history.

Summary of June Projections

Last month, we published our first article projecting which Dividend Aristocrats would announce an increase in their dividend payment (We used the Wikipedia list of companies that are considered Dividend Aristocrats for our monthly series).  In the article, we projected three companies would increase their dividend and  22 days into June, I can gladly say that each company did in fact announce an increase!  Here is a brief recap of each company’s dividend increase.  increases are as follows:

  • Target (TGT) announced a 21% increase.  The recent pullback in the stock, the announcement of the increase, and a stock analysis led one Diplomat to initiate a position in the retail giant.  Read more about his purchase of TGT here.
  • CR Bard Inc. (BCR) announced a 4.7% increase.
  • Medtronic (MDT) announced a 8.9& increase.

Pretty nice increases, right?  All three companies increased their dividend at a rate greater than inflation, which is something I always consider when researching a new DGI stock.  The raise I found the most interesting was Target’s.  The company has many reasons to maintain their current dividend or announce a lesser increase; however, the new management decided to stay the course and continue their streak of ~20% dividend increase annually.  For MDT and BCR, the companies announced dividend increases that are in line with  recent years.  MDT continued their trend of increasing their dividend by $.02-$.025 cents per share (over the last 5 years) and BCR continued their annual $.01 increase.   While the increases were much more low-key than Target’s, the company’s continue to show why they earned the label “Dividend Aristocrat.”

Expected Increases in July

Similar to June, only a handful of companies have historically announced their dividend increases in July.  Based on our analysis, we will expect the following companies to increase their dividend in July.  In addition, to add a wrinkle to this guessing game, I will take my best guess at projecting how large the increase will be! Don’t hold it against me if I am wrong, it is all in good fun.  As always, the final decision will rest in management’s hands.

1. Stanley Black & Decker (SWK).  Okay, SWK has had an interesting stretch of dividend increases. From 2010 – 2013, the stock increased the dividend from $.34 – $.50 and only increased the dividend three times.  Interestingly enough, the last dividend increase was a small $.01 to increase the dividend per share from $.49 to $.50 per share.  Due to this, I will forgoe projecting a dividend increase due to the large swings in the total dividend increase from year to year.

2. Walgreens Co. (WAG).  Unlike SBW, WAG only increase their dividend once a year.  The company has had some pretty solid increases in the past, averaging an increase of about 23% each year over the last five years.  Even with the stong increases, increase that large are difficult to maintain over the long-run and in the last year, the company only increased their dividend by 14.5%.  Thus, when setting my expectations, I will expect the increase to be slightly below the 5 year average to factor in the prior periods decrease.  I predict that WAG’s will increase their dividend by 19.05%, or $.06/share.

Again, these projections are all fun and games.   I am in no way creating an expectations that investors should use in their independent financial decisions.   Let’s see how close I can get to the company’s actual increases in the upcoming months.

~Bert

 

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9 thoughts on “Expected July Dividend Increases

  1. Nice, I own MDT and didn’t even realize they increased the dividend!

    The TGT increase is a nice surprise given all the publicity surround the company.

    Thanks for the updates, cheers!

    – Henry

    • Henry,
      Thanks for stopping by. I was also surprised by the tgt increase. They had every reason not to buy still stuck to their dividend philosophy. I’m also glad to here that you are getting a nice bump from mdt.

      Bert

  2. I’m happy with the BCR raise. I know BCR is a dividend stock that doesn’t get a lot of love among the dividend bloggers because of it low yield but I have been happy with it and they have been raising dividends for decades. Thanks for sharing.

    • No problem! BCR is a stock I have now added to my watch list for the reasons you mentioned. One of my favorite things about publishing the dividend increase article monthly is it helps me identify stocks like BCR that I would normally not consider.

      Thanks for stopping by!

      Bert

        • Great article. I just finished reading about it. I wonder how much of the lack of publicity is due to the fact that the company’s stay out of the headlines and do not operate in high profile industries. Unlike the TGT and ARCP you mentioned in the article, the stocks are not making the headlines that a popular consumer brand would make or an aggressive, high0yielding REIT would make. They just continue to perform, raise their dividend reguarly, and stay the course. Nothing sexy. That’s just a theory though. I am sure some it has to do with a higher PE ratio and a low yield, or some combination of all three factors.

          What’s interesting about the stocks that you mentioned in the article is that they all have very high dividend growth rates. I don’t know how closely you follow Dividend Mantra’s blog, but he recently wrote an article about how a well-rounded dividend portfolio should contain a mixture of high-yield, lower growth stocks, and low-yield, high dividend growth stocks. The stocks in your article fall into the latter category.

          http://www.dividendmantra.com/2014/06/a-multistage-rocket-model-for-a-dividend-growth-stock-portfolio/

          Again, great article. Thanks for bringin attention to the aristocrats. I will keep them on my watch list.

          Bert

  3. Glad you enjoyed the read. I have seen the DM article as well and can see the reasoning for trying to find a mix of high dividend growth, low yield stocks and high current yield, low dividend growth stocks as well and everything in between. I like to talk about many great dividend companies that don’t often get the attention they deserve. Have you seen my water resources article? There are many great long term payers listed there as well.

    http://divhut.com/2014/06/dividend-stocks-quench-thirst/

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