April Showers Bring... Dividend Growth, Joy And Fun!

Includes: BAX, BCE, CVX, GE, JNJ, KHC, KO, MO, O, PG, PM, SO, XOM
by: Mike Nadel


This month underscores why Dividend Growth Investing is not only financially rewarding but also fun.

Numerous major corporations are announcing dividend raises in April.

Every time a dividend hike occurs, milestones are met, goals grow closer and happiness ensues.

April is a happy month. The crack of baseball bats can be heard from cavernous Major League stadiums to tiny T-ball parks, college basketball crowns its champions, a green jacket is fitted at the Masters, flowers bloom, trees fill out, tax season finally ends and spring cleaning finally begins.

Oh, and then there's the happiness experienced by me and many other practitioners of Dividend Growth Investing: Some of the world's largest, most-respected corporations increase their payouts to shareholders.

Procter & Gamble (NYSE:PG) got things rolling this week, hiking its annual dividend 7% to $2.5744 per share. It's the 58th consecutive year that this iconic manufacturer of 25 billion-dollar brands has raised its dividend and the 124th straight year it has paid divvies.

Of course, I mostly care about what that means for me and my wife, Roberta: another $69 to invest back into our portfolio over the next 12 months.

Before April ends, Johnson & Johnson (NYSE:JNJ), ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) also will announce dividend increases. If each merely matches PG's 7% hike -- probably an underestimation, given the recent double-digit-raise history of XOM and CVX -- that will mean additional $220 in income.

So by partnering with these great American corporations -- four of my nine DGI Champions -- the total annual dividend income of our portfolio will increase by more than 1%. Pretty neat.

But wait (as they say in the infomercials), there's more! Southern Company (NYSE:SO), one of my "Role Players," also is expected to announce a divvy hike this month, and there's a good chance Kinder Morgan Inc. (NYSE:KMI) will do likewise.

And if that isn't enough, Coca-Cola (NYSE:KO) and Philip Morris (NYSE:PM), two more DGI Champions, pay dividends in April. So do Role Players General Electric (NYSE:GE), Realty Income (NYSE:O), Altria (NYSE:MO), Baxter International (NYSE:BAX), Kraft (KRFT) and BCE (NYSE:BCE).

OK, each dividend event isn't quite as special as a walk-off home run or Masters-winning putt, but each is still worth celebrating... and I do.

I keep detailed records of the dividend payouts for each company we own. When PG announced its hike, I changed the annual income it will produce over the next year from $989 to $1,058. I happily will make similar changes as JNJ, XOM, CVX and SO announce their increases.

There was no joy in Mudville when (spoiler alert!) Mighty Casey struck out, but there was joy in Mikeville when KO and BAX paid their divvies on April 1. And there will be plenty more when other companies follow suit this month. Because I am a serial dripper -- I reinvest payouts right back into the companies from which they come -- I calculate how the payments will affect future dividends... and I smile every time!

I'm all about charting progress toward our next goal: $36,000 in annual dividends streaming into the portfolio. Just last month, we raised our glasses to celebrate reaching the $25K milestone. Thanks to dividend growth and dripping, that figure will exceed $26,000 by the end of April, even with no "new money" being invested.

Keeping records and noting each change helps make investing rewarding, satisfying and, yes, fun. I highly recommend every investor do the same.

It's fun to see our divvy dollars increase quarter after quarter, year after year. It's fun when milestones are met and new goals are established. It's fun that tangible evidence of success is presented, recorded and updated in a positive direction.

Of the many reasons I like DGI, I think the fun factor ranks No. 1.

Disclosure: I am long BAX, BCE, CVX, GE, JNJ, KO, KRFT, MO, O, PG, PM, SO, XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.