Expected September Dividend Increases

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.

september-rally

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

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.

Source of Images:

Calendar

Facebooktwitterredditpinterestlinkedinmail

11 thoughts on “Expected September Dividend Increases

    • Aren’t we all? This will be a really interesting announcement ocnsidering everything that has happened over the last couple of months. A strong dividend increase could go a long way to boost investor confidence.

      Thanks for stopping by.
      Bert

  1. Don’t own any MCD yet (well other than in an index fund), but it is probably something I will want to add in the future if the price is right at the time!

    • Have you considered adding it now or do you have other investments you would perfer at the moment? It could be a great time to catch MCD at a discount if it meets your valuation metrics! It has been on my radar for a while now.

      Bert

    • This should make for a pretty exxciting month for you. Hopefully each week you will be able to benefit from a dividend increase. DOV< ITW, and SIAL all intrigue me, I just wish they had a little bit higher of a yield. I am definitely oging to consider them next time I make a low yield, high growth stock.

      Thanks for stopping by. Hopefully September treats you well Henry!

      Bert

  2. Bert,

    Enjoyed that ITW raise. That has been one of my best investments thus far on a total return basis, as have many of the stocks that I own that have lower yields, but faster growth rates.

    Looking forward to seeing what MCD does. I haven’t been particularly interested in adding to MCD here, as it’s already a larger position. Plus, growth has slowed considerably, meaning the P/E ratio compression is warranted. But I do hope we see a raise in the upper single digits, as the payout ratio can handle it.

    Best regards!

    • DM,

      Thanks for stopping by. Congrats on the 15% ITW increase and the overall increase in the stock! You introduced me to the concept of investing in lower yielding high growth stocks a few months ago. Great dividend stocks come in all shapes, sizes, yields, and growth rates. Putting this list together each month exposes me to all the different types of dividend growth stocks since the Dividend Aristocrat merely focuses on increasing dividends. Being introduced to the ITWs and the SIALs of the dividend world have really helped me build a well diversified watch list and portfolio (Sorry I just went off on a tangent there).

      MCD is a very interesting story. I agree with your conclusion about the P/E compression. Each new report seems to spell bad news for the domestic growth market. Like many companies, a lot hinges on the international growth. The question is will the recent news continue to spell bad news for MCD internationally? My best case scenario is that MCD pulls a Target move from a few months ago. Among all the bad news regarding the store hacking, the company announced a larger than expected dividend increase. Personally I assumed it was to signal the long term prospects of the company and to give investors confidence. Whether my theory is correct or not, I really want MCD to pull a similar move.

      Thanks for stopping by!

      Bert

    • The company would not be where it was today if it did not overcome adversity at some point, right? I am sure the dividend streak will continue, lets just hope the percentage is the same (if not more).

      Thanks again for stopping by!

      Bert

Leave a Reply

Your email address will not be published. Required fields are marked *