Dividend Increases December

We are cruising towards the end of 2020. What a year it has been. The stock market continues to climb towards record highs, with the prospect of a vaccine and more stimulus around the corner. The positive news, along with another strong earnings seasons, has had a direct impact on dividend payouts and more importantly, dividend increases. That is why we love dividend increases and spend so much time reviewing them!

With a new month coming, you know what that means? The next installment in our monthly dividend income summary series. Each month, we predict the expected dividend increases and review last month’s actual results. November was an INSANE month for dividend increases. Hopefully, December will be even crazier!

Dividend News and Dividend Increases in November 2020

Before looking ahead to the upcoming dividend increases, I like to discuss the actual dividend increases from the previous month. I stated earlier that November was a crazy month for dividend investors. You are about to see why shortly. There we many, unexpected dividend announcements that are going to bring HUGE amounts of income to YOUR bank account.

In this section of the article, I will discuss dividend increases, and changes, from November. Rather than simply list each dividend increase, I will split the dividend increases into different, self-identified categories. The categories are:

  1. Featured Dividend Increases – This section will summarize the increases for some of the companies listed in last month’s article
  2. Surprise Dividend Increases – This section will cover dividend increases that came out of left field!
  3. The Surprise “No Dividend Increase Announcement” – This section will feature any companies that did not announce a dividend increase as expected
  4. The Best of the Rest – This section will briefly list any remaining dividend increases that have not been covered.

Let’s dive in and review some dividend increases!

(adsbygoogle = window.adsbygoogle || []).push({}); Featured Dividend Increases

TJ Maxx (TJX) – This could have been classified as a featured and surprise dividend increase!  TJ Maxx delivered some amazing news for dividend investors. At the onset of the pandemic, TJX suspended its dividend to preserve capital. The move was prudent at the time and one that most investors understood.  Management made several statements as well, citing their desire to reinstate the dividend as soon as possible.

The time to reinstate their dividend came in November.  TJ Maxx reinstated its dividend. However, the company did not stop there. To put the cherry on top, TJ Maxx announced a 13% dividend increase. Not only did the company reinstate its dividend; the company reinstated its dividend at a higher rate.  How freaking awesome is that!

TJ Maxx dividend Increase

Nike (NKE): The apparel giant with some of the most iconic shoes (Jordans) and athletes under its umbrella (LeBron), delivered a strong 12% dividend increase to investors. This dividend increase was hard to estimate entering the month. Why? Retail stores shut down due to the pandemic.  To counteract that point, people have been working out at home and were still requiring new shoes, equipment, and other items. I could have seen the dividend increase go both ways for Nike. Clearly, Nike was able to push through store closures and still announce a dividend increase in line with its five-year average!

McCormick (MKC): Last month, we talked about McCormick’s consistent dividend increase history. The company’s five-year average dividend growth rate was 9.2% entering the month and the company’s 2019 dividend increase was 8.8%. As dividend investors, we respect the consistency. Especially when the increase is close to double digits annually.  In November, you guessed it, MKC announced a strong dividend increase in line with its history. MKC increased its quaterly dividend by 9.7%.

Read: Dividend Aristocrats – Who & What are They

Surprise Dividend Increases and Announcements

Costco (COST): Costco rocked the investing world in the middle of November. No, the company did not announce a dividend increase. Instead, Costco announced a $10 per share special dividend! That alone will result in a $4+ billion payout to shareholders.

To help understand how large of a special dividend this is for shareholders, let’s compare the special dividend to the company’s regular dividend.  Annually, Costco pays shareholders a $2.80 per share dividend. The $10 per share special dividend is almost 4x as large. Clearly, this wasn’t some run of the mill small payout. I love dividend increases and would typically prefer a regular dividend increase versus a one-time special dividend. However, this special dividend left me speechless.

Costco Special Dividend

Aflac (AFL): The Dividend Aristocrat in the insurance sector delivered a nice surprise to shareholders in November. This was a surprise for a couple of reasons. First, Aflac typically increases its dividend at the end of January or early February. Thus, the timing of this dividend increase was shocking on its own!

Second, I was blown away by the size of the dividend increase. Aflac announced a 17.8% dividend increase. That is a HUGE dividend increase. Now, the company pays a $.33 per share quarterly dividend, compared to a $.28 per share dividend increase previously.  Rarely, in 2020, have companies exceeded their previous dividned increase. Aflac blew its average dividend growth rate out of the water.  This is WHY we love dividend investing.

Read: Dividend Stocks are Back! | Reinstating & Rising from the Dividend Cuts!

HP (HP)

Hormel (HRL): This is a surprise, for a different reason. Overall, I was very disappointed in Hormel’s dividend increase announcement. Entering the month, Hormel’s five-year average dividend growth rate was 13%+.  I was expecting a similar dividend increase due to the fact that the company’s products are canned, consumer staples. This sector has performed very well during the pandemic. However, instead, Hormel announced a 5.2% dividend increase. That was a pretty weak increase for this low dividend yield, high dividend growth rate stock.

Rockwell Automation (ROK): Rockwell, like Hormell, announced a smaller than expected dividend increase.  Rockwell’s $.05 per share increase in its quarterly dividend represented only a 5% dividend increase.  The compan’ys five-year average dividend growth rate is around 10%.  Unfortunately, the dividend increase was much lower this year.

The Suprise “No Dividend Increase Announcement”

Sysco (SYY): Surprisingly, Sysco did not increase its dividend as expected during the month. While dividend increases may be back for many, there are still other sectors that have some work to do. It would make sense a that a company that provides foods to restaurants, large office buildings, etc., may not be in the position to increase its dividend at this time.

The Best of the Rest

Emerson Electric (EMR): Emerson is one of my 5 stocks to buy now, always, and FOREVER. I have had a love/hate relationship with Emerson lately. The company’s dividend history is fantastic. They are a Dividend King, after all. However, Emerson’s average dividend growth rate has been pathetic recently. Their 5 year average dividend growth rate is only 1.3%.  Sadly, in 2020, their dividend increase was below their average.  Emerson announced a 1% dividend increase in November. It is time to start re-evaluating if this company deserves a spot on my 5 always buy stocks.

ADP (ADP): The payroll processing giant announced a 2.2% dividend increase during the month.

Dividend Increases Expected in December 2020

With the previous month behind us, let’s jump right in and start reviewing the expected dividend increases in December. Let’s hope that December will be filled with as many surprises as November!

Company #1: AT&T (T) – Let’s start this article off in style. First up, we have one of our Top 5 Foundation Dividend Stocks for your porftolio. AT&T is the telecom giant that is near and dear to our hearts. I know that I have been adding to my position, as the company’s stock price has remained below $30 per share for the majority of 2020. AT&T’s dividend increase pattern is very consistent. The company increases its quarterly dividend by $.01 per share on an annual basis. I do not see a reason why that would change this month. Therefore, that is my expectation for the upcoming dividend increase.

T Dividend Increase last year –  1.96%

T Five-year average DGR –  2.04%

Expected timing of Dividend Increase Announcement –  Middle of the month

Company #2: Mastercard (MA) – We discuss Visa stock a lot on this website and our YouTube channel. However, we don’t often discuss the company’s main competitor, Mastercard. Mastercard is the other major player in the credit card industry that goes toe to toe with Visa. They are also a low dividend yield, high dividend growth rate stock that has benefitted in the 2020 economy. Interestingly, Visa announced a 6.7% dividend increase earlier in the year, which is well below its historical average. Based on this, it would not surprise me if Mastercard announces a similar, smaller dividend increase.

MA Dividend Increase last year –  32.0%

MA Five-year average DGR –  20.28%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Company #3: Pfizer (PFE) – This one will be a fascinating dividend announcement. In addition to announcing promising results of its COVID-19 vaccine, the company also completed its spin-off. At the time, the company committed to maintaining its current dividend post-split.  Now, we are getting ready for the first dividend declaration post split.  December is typically the month where the company announces a dividend increase as well. So who knows exactly what the new dividend will look like. The only thing I do know is that we are going to be watching this undervalued dividend stock closely.

PFE Dividend Increase last year –  5.6%

PFE Five-year average DGR –  6.30%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Company #4: Eli Lilly (LLY) – There are so many great pharmaceutical companies out there. We frequently discuss Pfizer (PFE) and AbbVie (ABBV). In fact, we previewed Pfizer’s dividend increase right before this one, and AbbVie was one of our featured undervalued dividend growth stocks. Eli Lilly is another major player in the sector. The company has been around since the 19th century.  Eli Lilly has been paying a dividend for a long, long time. However, the company’s dividend growth streak is small. In fact, the company did not increase its dividend in 2013 as scheduled. LLY’s annual dividend increase streak restarted in December 2014 and has continued since.

LLY Dividend Increase last year –  14.7%

LLY Five-year average DGR –  8.3%

Expected timing of Dividend Increase Announcement –  Middle of the month

Watch: 3 Undervalued Dividend Growth Stocks – Including AbbVie

Company #5: Franklin Resources (BEN)  – The asset management sector has some great, long-term dividend paying stocks. We both own T.Rowe and not Franklin Resource. However, like T.Rowe Price, Franklin Resources is a Dividend Aristocrat. Further, they have ZERO debt on their balance sheet. In tough times, BEN does not have to choose between paying shareholders and debt holders.

Read: Dividend Aristocrats with Low Debt

One unique thing about this company is that they periodically pay a special dividend.  BEN has done so in 2014 and 2018. The question is, will the company do so once again in 2020? With asset prices climbing with the stock market and reaching all time highs, the company may have a surprise special dividend announcement for us!

BEN Dividend Increase last year –  3.8%

BEN Five-year average DGR –  12.6%

Expected timing of Dividend Increase Announcement –  Middle of the month

Company #6: ABM Industries (ABM) – This Dividend King is set to announced a dividend increase in December. ABM is unique. They are a part of the small population of Dividend Aristocrats (25+ consecutive dividend increases) that are not Dividend Kings (50+ Consecutive years). How can this happen? This is due to the fact that the company’s market cap is below the minimum level (Read more here).  ABM may not be a household name; however, they play a major role in your life. Through their commercial cleaning services or the parking management, you have paid money to ABM at some point of your life.

Unfortunately, that never trickles down to shareholders in the form of a large dividend increase. ABM’s dividend increases have been low. In fact, they have been very low.  ABM falls into the rare category of a low dividend yield, low dividen growth rate stocks. That is not the sector I want to find myself investing in this year.

ABM Dividend Increase last year –  2.7%

ABM Five-year average DGR –  2.95%

Expected timing of Dividend Increase Announcement –  Middle of the month

Company #7: EnBridge (ENB) – EnBridge is a darling of the Canadian dividend investor community.  In fact, when reading various stock purchase articles on blogs, this name is often mentioned. The energy transportation giant has a very strong dividend yield that is nearly 8%! When performing research for this article, I was a little shocked with the company’s strong dividend growth rate.

Oil and gas companies have taken a beating in 2020. While Shell rebounded and increased their dividend last month, they are still well below where they entered the year. Further, Exxon Mobil, one of the few oil Dividend Aristocrats, has still not announced its annual dividend increase this year. They are running out of time. Therefore, I am not too confident that EnBridge will announce a dividend increase anywhere close to its 5 year average dividend growth rate.

ENB Dividend Increase last year –  9.7%

ENB Five-year average DGR –  11.75%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Company #8: Bristol-Myers Squibb (BMY) – The pharmaceutical sector is well represented in this article. Let’s be honest, this sector has been in the broader news and on everyone’s mind as we race towards a coronavirus vaccine. Bristol-MYers Squibb is yet another dividend stock in the sector that is set to announce a dividend increase this month. 2019 was a great year for its shareholders. The company’s dividend increase was double its five-year average dividend growth rate. Can the company repeat in 2020? That would be SICK!

BMY Dividend Increase last year –  9.75%

BMY Five-year average DGR –  4.03%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Summary

Hopefully you are as pumped up as I am after reading this article. There will be plenty of dividend increases this month. Further, I didn’t even mention the fact that mutual funds are announcing their year end capital gains contributions. So everyone, let’s roll up our sleeves and get ready for a fun December. Let’s celebrate some AWESOME dividend increases in Dcember.

What dividend increases did you receive in November? What increases are you expecting in December? WEre you as shocked about TJ Maxx and Costco as we were?

Bert

(adsbygoogle = window.adsbygoogle || []).push({});

The post 8 Dividend Increases Expected in December 2020 appeared first on Dividend Diplomats.