Expected September Dividend Increases

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The best month of the quarter is upon us! September adds a wave of capital to our portfolio through DRIPs or the receipt of cash. Tracking my portfolio is particularly fun in this month since many of the companies I own will pay a dividend this month and one of my stocks is supposed to increase its dividend this month. It seems like every two-three days a stock in my portfolio will have a new update for me to follow. It is great! Let’s take a look which Dividend Aristocrats are set to increase their dividend this month.

August Re-cap

Last month we discovered there were four aristocrats set to increase their dividend. Let’s see if they followed through with their historical trend.

Cincinnati Financial Corp. (CINF)- No increase! As it turns out, I should not have been so quick to project an increase. The company does not exactly have a set dividend increase schedule even though prior to 2013, the company had a scheduled increase in August. But last year the broke the trend and announced two increase, throwing off their annual schedule. This quarter they decided to maintain their current dividend of $.44/share I wold expect them to maintain this dividend for another quarter an increase the dividend in the following quarter.
Dover Corp. (DOV).- Similar to the last couple of years, DOV increased their dividend $.025/share to $.40. A solid 6.67% increase.
Illinois Tool Works (ITW). Wow. ITW increased their dividend $.065/share to $.485/share, an increase of 15%. Congrats to any shareholders out there. The pricing is a little expensive for me to consider (P/E of 21.80), but I’ll keep this dividend growth stock in mind in the next correction.
Leggett & Platt (LEG). LEG kept the trend going an increased the stock $.01/share. The increase of 3.33% is much smaller than the others, but the company has regularly only increased the dividend $.01/share. The current yield is now at 3.53%

Lastly, there was one hold-over from our July list, Walgreens (WAG). WAG historically announced its dividend increase in July. We knew something was up with the company since the company still hadn’t announced a thing at the beginning of August, we just didn’t know what. As it turns out, the company was waiting to announce its plan to keep the headquarters in the U.S and buck the current inversion trend. When the company finally announced the dividend on August 5th, it announce an increase of about $.0225/share, or 7%.

Expected September Dividend Increase

Now it is time to look forward. Going into this article, I expected a ton of dividend increases. My assumption was that companies would begin announcing their dividend for the final quarter in September. Well I was wrong. At least I will have a lot to write over the next three months! Below are the companies that are expected to announce an increase in September.

McDonalds (MCD). Can the Golden Arches shake the funk they have been in recently with the announcement of a strong dividend increase? I sure hope so as I own 12.4 shares. Many dividend investors have taken the recent slump as a buying opportunity to invest in this Aristocrat and have either initiated a position or increased their position. Unfortunately I have passed on the opportunity for myself due to my stretched capital. I was getting ready to set my automatic investment and then Scotts Miracle-Gro announced their $2.00 per share special dividend increase. That was too great of a opportunity to pass up. MCD has increased their dividend 10% on average over the last five increases, so I would expect an increase in that neighborhood.
Sigma-Aldrich Corp (SIAL). I’ll be honest with you, I am not too familiar with this company. From morningstar.com, “Sigma-Aldrich Corp is a life science and a technology company that develops, manufactures, purchases and distributes various chemicals, biochemicals and equipment available internationally.” The dividend yield is currently .88% and trading at a P/E ratio of 24.64. The company is not my cup of tea, but it is a Dividend Aristocrat that may appeal to a DGI investor that favors higher-growth lower yielding stocks. SIAL has increased their dividend 10% over the last five increases, so similar to MCD I would expect another double-digit increase.

That concludes another round of projecting dividend increases. What has been most surprising to me is each month an aristocrat seems to break an increase trend. Wen I began this activity, I assumed that the dividend announcements would be formulaic considering the long history of increases and the maturity of the companies involved. It is always a reminder of how things can change and that the past is not always the best indicator of the future. Hopefully you all will benefit from a few increases this month and receive a ton of dividend income!

Bert