Dividend Increases Expected in October

As the calendar prepares to turn, it is time once again to review one of the Dividend Diplomat’s favorite investing topics:  dividend increases.  Each month we compile a list of Dividend Aristocrats that we anticipate will announce a dividend increase and reward their shareholders by increasing their annual return!  Lets see which aristocrats increased theirs in September and those that are expected to have a dividend increase in October!

Dividend Increases

 September Recap

Before jumping into October’s expected dividend increases, let’s recap September.  We projected two companies would increase their dividend last month, the question is….did they deliver?

  • McDonalds (MCD)-  This one has a fun back story.  Lanny was all over this dividend increase like a hawk and it was a very entertaining day for me.  I received a text every hour from him getting updates about when they would release and how much he thought the increase would be.  Let’s just say that once Lanny figured out the release was coming around 4:30, he did not leave his house for the preceding hour until he knew just how large the increase was.  Maybe a career in news reporting is in his future?  As it turns out, MCD did increase its dividend by $.04/share, or 5%, to $.85/share.  Not bad and the increase is still greater than inflation; however, the increase was below their average and our expectations.

  • Sigma-Aldrich Corp (SIAL)- Not so fast my friends!  SIAL did not announce a dividend increase this month.  After peeling back their dividend history and reviewing multiple years  of dividend history, it turns out the company announces this increase in either September or November.  It looks like 2014 is shaping up to be a November year!  I apologize if I got any shareholder’s hopes up!

October Dividend Increases

With September behind us, let’s take a look at which companies we expect to announce dividend increases in October.

  • Aflac (AFL)-  Aflac is a very popular stock among the dividend growth investor community and for good reason.  The company has a low payout ratio, strong earnings, low P/E, and a history of growing dividends.  What’s not to like about the stock?  I recently purchased shares in August and Lanny has held the stock for a long time now, so we are pretty familiar with the company.   The company historically announces all dividend increases towards the end of the month and has increased the quarterly dividend $.02/share 3 of the last 4 times, so I would expect a similar announcement towards the end of the month.  Who knows, maybe Aflac could shock us all by breaking the trend and announcing a $.03/share increase? (Lanny’s Note: I am going to project October 28th for this)
  • Cintas Corp. (CTAS)-  CTAS is the industry leader in providing corporate uniforms (via morningstar.com) and the company is a low-yielding, high dividend growth stock.  The interesting thing about CTAS is that the company only pays dividends annually, which is a first for the Dividend Aristocrats since I have been covering during the series.    In the past, CTAS barely increased their dividend;  however, the last three years could not have been any more different than their past.  Their dividend has increased annually from $.49 in 2010 to $.54 in 2011 to $.64 in 2012 and finally to $.77 in 2013.  Predicting a specific increase will be very difficult due to their unpredictably large increases, so I will take the easy way out and say that I expect a large increase to be announced this month.
  • VF Corp. (VFC)- The apparel giant is set to announce another dividend increase.  Similar to all the companies on this list, VFC has been rewarding its shareholders very well over the last couple of years.  Over the last five dividend increases, the annual increase has averaged 12.5%.  The number is deceiving considering the last three increases have averaged 18.60%!  With that being said, I want to take a guess at projecting this increase.  I will project an increase of $.04/share to $.3050, or a 16.19% increase.  Hopefully for the shareholders I am correct!  If not, let’s at least hope I am under and not over.

Lanny’s Note: Visa (V) will increase their dividend this month, though not an Aristocrat, a huge company that trends for October.  I am predicting a 25% increase in their dividend from $0.40/quarter to $0.50/quarter.  I’ll be crazy, why not?  Also – October 22nd.  Let’s get wild here.  How is that for expected dividend increases?

Do you own any of the stocks listed in the list?  If not, are you planning on investing in any of the companies soon?  Any thoughts about McDonalds lower than expected increase?  Any other dividend increases you are pulling for that aren’t aristocrats?  As always, thanks for stopping by!



7 thoughts on “Dividend Increases Expected in October

  1. Hey guys. I enjoyed McDonald’s increase as well. As you said, it’s below their historic average…..but the company’s sales are being hampered somewhat by geopolitical issues. I’m happy to continue owning MCD shares at these levels.

    I look forward to an Aflac raise in October. I also hope the price falls, because I only have about half the position I’m hoping to have. Time will tell, but I believe Aflac’s Japanese fears are overblown. Enjoy the rest of your weekend!

    • Bryan,

      Well for your sake hopefully the price of AFL drops so you can increase your position! I am in a similar boat with AFL. My first purchase was just an entry position and I am hoping to add more in the future. Regardless of the Japanese fears, the company is still solid and will do well in the long term. So let’s take advantage of the fears and increase our position! Hopefully AFL shocks us all with a larger than expected increase!

      Thanks for stopping by and enjoy your weekend as well.

  2. I own AFL as well and am looking for something a bit more than the $0.02 we got last year. While AFL jumped in price during 2013, it hasn’t really seen a big run in 2014. I would be comfortable adding to my position at today’s prices. Since my first buy in was around $50 per share, I’d be averaging up, but still looking at a solid average cost basis overall.

    As for the others, I’m hoping to pick up a few shares of Visa over the next few months, so lets hope things depress a bit! 🙂

  3. Bert,

    Looking forward to seeing what AFL and V have in store for us. I’m hopeful that Aflac gives shareholders a slightly more generous raise than what we’ve seen over the last few years. And I agree with Lanny in that Visa will probably announce a 25% raise. They can easily afford it, and it would give further support to the investment thesis there for a dividend growth investor.

    I think we’ll have a great October! 🙂


    • Mantra,

      Thanks for stopping by. I hope you are right with AFL. Even though they are down ~14%, I don’t see why they would not reward their shareholders a little more than they have in the past. With such a low payout ratio and, they have the room and earnings to do so. It would be nice if this increase were $.03 or $.04 as opposed to the typical $.02 increase. If they are in your middle class of DGI stock (lower ielding but higher growth stocks), they better step up their game!

      This will be a great month. Congrats on all of your big events. Cheers to many great days and new memories in Sarasota.


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