It has been some wild ride this month – no doubt. Companies have begun/continued to release their ever so exciting dividend increases and I’m here smiling to receive them, that’s for sure. Some have increased them at a not so high level, some right on where you’d expect and others have had surprisingly nice dividend increases. I’m sadly going to be very conceited and focus on the dividend stocks in my portfolio that have made announcements mid-way through November. I primarily will be focused on the companies, years they have increased, the impact to the portfolio and essentially, bringing it all together to show why we are dividend investors. Okay, enough of this Italian typing away, let’s get to the article.
Notable companies whom have increased their dividend
1. Emerson Electric (EMR): The dividend aristocrat themselves. Bert has purchased them multiple times and, well, I have purchased them not once, not twice, but three times as well. Heck, Bert even considers it one of his 5 Always Buy Stocks…. well, I like the company, but after this increase they gave us, I may question it a bit. They have announced their traditional November dividend increase and for their 58th+ year in a row doing so, they announced what I thought was the weakest dividend increase I have ever seen. They increased their dividend a whopping 0.50 of a cent per quarter. This was a 1.06% dividend increase from $0.47/quarter to $0.475 per quarter… I am tossing this company into my article of – Large Companies who are Increasing their dividends by Small amounts. The impact here was only $1.80 to my forward dividend income… well, I hope they have a better run next year; this keeps their payout ratio around the mid point. I will still take it, but a COLA adjustment would be nice!
2. Kraft – Heinz (KHC): The newly formed company by 3G capital…. yes, yes we all know and love Kraft (Huge special dividend earlier this year after the merger closed, thank you guys!). They kept right on with their consistency, that’s for sure. This will technically be their first year of a dividend increase and it is fairly straight from last year. They increased their dividend 4.54% from $0.55 to $0.575 per share per quarter. This is fairly similar to 2014’s increase from Kraft, when they were public. I am sure right now they are still trimming fat and seeing how the earnings and cash flow will truly be. Heck, they even just announced closing down a few plants and laying off a few thousand workers… tough to see, but I know why they are doing it. Tough, tough to see, I hope they will find new places of employment/time. The increase held only a $2.69 addition to my forward dividend income, I like it and will gladly accept. Thanks KHC! Looking forward to a full year of you guys.
3. Rockwell Automation (ROK): I know I’ve been quiet on these guys and it’s been a while since I have purchased them back earlier this year. However – they stayed true to their strong dividend growth rate, which now will have 5+ years of dividend growth. They increased their dividend 11.53% this year, talk about a jolt to the dividend growth rate for my portfolio! Loving this and was surprisingly given the dismal increases we have seen throughout the year mostly. Still have a great payout ratio in the low 40% range and still have ample room to continue the increases. The 11.53% had an impact of $6.93 added to my portfolio, very awesome! Thank you ROK, keep it coming, no sighs over here, just smiles and getting closer to the goal.
4. McDonalds (MCD): I’m Loving It. Well, well… McDonalds, FINALLY made their announcement, after the long waited debate. I was just browsing their investor news website in the morning and boom there it was. had to show Bert and we were both shocked. Management decided no REIT to be in the plan for them, as they contemplated spinning off their properties into a REIT company. With that decision now made, the increase came next at 4.74% and the aristocrat stands! As you all know, this is one of our foundation stocks for any dividend portfolio. What’s funny, is even with all of the bad press, McDonalds (MCD) is up 20% year to date… how about those apples… err I mean big macs… still making it happen. I think with the changes they have had, they are back on track. Excited for them, that’s for sure. This increase added $6.99 forward to my overall income going forward for the year, again, “I’m Lovin’ It”.
Why do these dividend increases matteR?
Why am I discussing these now and not as I normally do as part of my normal dividend income for the month summary that I post? I wanted to highlight a few things… dividend increases are incredible. They are adding more income to your portfolio and to living, so that you either can reinvest the dividends into more shares or simply to use to purchase food, transportation, shelter, whatever it may be. What did I really do? Nothing, nothing outside of being frugal, saving money and investing when/where I can. Very lucky to say that I have the ability and means to do that. Thank you. However, it’s powerful, it’s powerful as all hell. It’s awesome, $18.41 was just added to my forward income on my portfolio… this just means more reinvestment and more income to break off from that. The clockwork and the hamster wheel for a dividend portfolio is a remarkable thing.
Dividend increases also provide the support or the event of why you invest into dividend companies, and the true benefit of a dividend investor. You have an ever increasing income for very little maintenance at a tax bracket that is currently in your favor (Qualified dividends maxed at 15%/LT capital Gains rates). Further, a dividend increase in a downturn market, as Mr. Market has been sliding down the hill as of late, means more dividend income to reinvest to pick up more than normal share amounts which produce more income that will have increases down the line etc. and etc.. I think it’s one word maybe – magic?
dividend Increase Summary
With the combined dividend increases thus far, this has increased, as stated, my forward income by $18.41. Thank you, thank you strong blue-chip companies. Thank you to those that use their products, work and provide your term/service to them and all of us bloggers for keeping the motivation high. To me, that $18.41 invested at a 4% dividend rate, would have taken a capital contribution of $460… and wow, what a burden to be lifted. Instead, the companies that I own are making it easier to not invest as much, as long as they continue to increase that dividend for me/us.
What is everyone else thinking during this end of the year stretch? Did you benefit from dividend increases this month? Any surprises? What are you expecting now and going forward? Would love to hear, thank you for stopping by and all of the best! Let’s go get em!