11 Upcoming Dividend Increases Including A 50% Hike

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Includes: AAN, ADC, AVGO, ECL, FMBI, GAIN, GTY, JJSF, TTC, UHT, VAC
by: Dividend Derek
Summary

All stocks have at least 5 years of dividend growth history.

A drop to 11 from 23 companies last week.

7 have at least a 10% increase.

Introduction

I love stocks that grow their dividends year in and out. You probably do too! If so, you are in the right place. I've created a list of stocks that are increasing their dividend next week.

This list is a trimmed-down version only covering dividend increases. A full upcoming dividend calendar is available here. If you know how this was built and the caveats, feel free to jump down to the lists themselves.

How It's Assembled

The information presented below was created by combining the "U.S. Dividend Champion" spreadsheet hosted here, with upcoming dividend information from Nasdaq. This meshes metrics about companies with dividend growth history with upcoming dividend payments (and whether those payments are increasing). These companies all have a minimum 5-year dividend growth history.

Why Should I Care?

Dividend increases are one of the most outward signs by management as to how business is going. Dividend yields also don't live in isolation; share prices tend to follow increases, as investors will move into a stock to claim the new payments. All else being equal, a 10% dividend hike should see an approximately 10% share price appreciation over time as the market adjusts to the higher payment. This produces a great flywheel effect whereby an investor can increase their income and see the face value of their investment increase.

Especially for retirees not receiving paychecks, dividend increases help cushion the never-ending force of inflation. As an added bonus, companies that grow their dividends by a rate greater than inflation can help investors improve their wealth over time.

What these lists provide is an opportunity for an investor to buy more shares prior to the dividend increase. An investor could start a position or increase their position size prior to the market readjusting to the new and higher dividend rate.

What Is The Ex-Dividend Date?

The "ex-dividend" date is the day you are no longer entitled to the dividend or distribution. You need to have made your purchase by the preceding business day. If the date is a Tuesday, you need to have purchased (or already owned) shares by market close on Monday. Be aware that for any stock going ex-dividend on a Monday (or Tuesday, if Monday may be a holiday), you must own it by the prior Friday.

Dividend Streak Categories

Here are the definitions of the streak categories as I'll be using them throughout the piece:

  • King: 50+ years
  • Champion/Aristocrat: 25+ years
  • Contender: 10-24 years
  • Challenger: 5+ years

Fun Facts

Category Count
King 0
Champion 2
Contender 2
Challenger 7

The Main List

The data is sorted by the ex-dividend day (ascending) and then the streak (descending):

Name Ticker Streak Forward Yield Ex-Div Date Increase Percent Streak Category
Ecolab Inc. (ECL) 26 1.19 17-Dec-18 12.20% Champion
J & J Snack Foods Corp. (JJSF) 14 1.26 17-Dec-18 11.11% Contender
Universal Health Realty Income Trust (UHT) 33 3.88 18-Dec-18 0.75% Champion
Broadcom Inc. (AVGO) 8 4.16 18-Dec-18 51.43% Challenger
Aaron's, Inc. (AAN) 16 0.32 19-Dec-18 16.67% Contender
Toro Company (The) (TTC) 9 1.54 19-Dec-18 12.50% Challenger
Gladstone Investment Corporation - Business Development Company (GAIN) 7 8.22 19-Dec-18 13.33% Challenger
Getty Realty Corporation (GTY) 7 4.51 19-Dec-18 9.38% Challenger
Marriot Vacations Worldwide Corporation (VAC) 5 2.46 19-Dec-18 12.50% Challenger
First Midwest Bancorp, Inc. (FMBI) 7 2.22 20-Dec-18 9.09% Challenger
Agree Realty Corporation (ADC) 6 3.66 20-Dec-18 2.78% Challenger

Field Definitions

Streak: This is years of dividend growth history sourced from the U.S. Dividend Champions spreadsheet. Here are some definitions to clarify the fields.

Forward Yield: This is the new payout rate divided by the current share price.

Ex-Dividend Date: This is the date by which you need to own the stock.

Increase Percent: This is the amount by which the dividend is being increased.

Streak Category: This is the overall dividend history classification of the company.

Show Me The Money

I received several requests to show the old and new rates, so here are those figures. It also reiterates the increase percentage. This table is sorted the same way as the first table (ex-dividend day ascending, dividend streak descending).

Ticker Old Rate New Rate Increase Percent
ECL 0.41 0.46 12.20%
JJSF 0.45 0.5 11.11%
UHT 0.67 0.675 0.75%
AVGO 2.33 2.65 51.43%
AAN 0.03 0.035 16.67%
TTC 0.20 0.225 12.50%
GAIN 0.07 0.068 13.33%
GTY 0.32 0.35 9.38%
VAC 0.40 0.45 12.50%
FMBI 0.11 0.12 9.09%
ADC 0.52 0.555 2.78%

Additional Metrics

Here are some additional metrics related to these companies, including yearly pricing action and the P/E ratio. This table is sorted in exactly the same way as the table above. The value investor may find stock ideas with those companies near their 52-week low. For example, VAC could be interesting being down over 50% off its yearly high.

Ticker Current Price 52 Week Low 52 Week High PE Ratio % Off Low % Off High
ECL 154.8 125.74 162.91 28.41 23% Off Low 5% Off High
JJSF 158.69 125.98 162.8 28.81 26% Off Low 3% Off High
UHT 69.51 53 77.81 36.57 31% Off Low 11% Off High
AVGO 255.01 197.46 274.26 8.64 29% Off Low 7% Off High
AAN 43.46 35.62 56 9.99 22% Off Low 22% Off High
TTC 58.46 53.8 67.81 23.29 9% Off Low 14% Off High
GAIN 9.98 8.9 12.19 3.17 12% Off Low 18% Off High
GTY 31.08 22.68 31.76 26.46 37% Off Low 2% Off High
VAC 73.28 71.71 154.14 18.84 2% Off Low 52% Off High
FMBI 21.65 19.67 27.7 18.65 10% Off Low 22% Off High
ADC 60.65 43.74 63 30.68 39% Off Low 4% Off High

Tickers By Yield (With Growth Rates)

Some investors are more interested in current yield, so this table is sorted descending by yield. This also includes some of the historical dividend growth rates as a bonus. Additionally, the "Chowder Rule" has been included (the current yield + 5-year dividend growth rate). That is the current yield, plus the 5-year dividend growth rate.

Ticker Yield 1 Yr DG 3 Yr DG 5 Yr DG 10 Yr DG Chowder Rule
GAIN 8.22 2.8 2.3 5.1 -1.7 13.4
GTY 4.51 12 11.9 17.5 -4.8 22
AVGO 4.16 135.8 57.5 51.1 55.4
UHT 3.88 1.2 1.6 1.5 1.4 5.3
ADC 3.66 5.2 5.9 4.8 0.3 8.4
VAC 2.46 16.7 77.6
FMBI 2.22 5.6 8.2 56.9 -10.7 59.2
TTC 1.54 16.7 20.5 26 19.3 27.6
JJSF 1.26 7.7 9.5 26.4 17.3 27.7
ECL 1.19 5.7 10.4 13.1 12.4 14.3
AAN 0.32 10 8.6 12.9 10.6 13.2

Bonus Charts

You can't have a legit 50% dividend increase and not cover it right? With that I'm going to highlight Broadcom this week. A chipmaker, it plays in the same space as Qualcomm (NASDAQ:QCOM), Skyworks (NASDAQ:SWKS), NXP Semiconductors (NASDAQ:NXPI), NVIDIA (NASDAQ:NVDA) and Micron (NASDAQ:MU). This is its 8th year of consecutive raises and it sports a BBB- rating from S&P. There is a lot of news coming out of this space, and the sector has been hit pretty hard lately. The stock looks cheap per Fast Graphs, but do your own due diligence.

Running a stock return calculation versus the S&P since December of 2010, shares have crushed the market, returning an average of 35% compounded per year. You would have seen over a 1,000% stock return! Even your dividends would have nearly tripled what was offered by the market. This is the type of investment that could make a career.

The return chart quickly scales out of whack starting in 2014. Shares were generally about the same from the end of 2010 until Broadcom pulled away. They have continued to accelerate away from the returns offered by the S&P 500.

(Courtesy: Custom Stock Alerts)

Conclusion

I hope you are able to find this information valuable. Let me know if you want to see additional data points or what may help make this more useful.

As always, do your due diligence on any stock before buying or selling.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.