- Looks like Coke continued their trend of only announcing a $0.01 per share increase in their dividend.
- This has been a roller coaster year for Walmart. The stock has not been able to find a consistent footing, especially after their earnings release and dividend announcement.
- Despite the coronavirus news and the subsequent red days in the market that ensued, Home Depot released strong earnings and a very nice dividend increase.
Originally published on February 27, 2020
Each month, we summarize the dividend increases from the previous month and highlight the expected dividend increases in the coming month! February had a lot of dividend increases, which was a blast to follow. Things will slow down in March before ramping up again. One thing I would like to note is that I made some formatting changes this month compared to last months. I'll discuss the changes in each section; however, each change was made to hopefully bring more valuable information to YOU while reading. I'm excited for your feedback. Here are the expected dividend increases in March!
Before we jump into the dividend increases, I wanted to briefly explain how we build our dividend income streams. We build this income stream by finding undervalued dividend growth stocks that have a history of INCREASING their dividend using the 3 simple metrics of our Dividend Stock Screener. We're both building the foundations we need to reach financial freedom, one day and one step at a time. See the foundations here:
Our Dividend Stock Portfolios showing each individual holding and the dividend income each produces.
Our Dividend Income page showing each monthly dividend income total.
One other thing to mention about our dividend income streams. Dividend income is extremely tax efficient, especially compared to regular wages. See some articles we have written about the tax impact of dividend income here:
Dividends Tax Rate - A deep dive into how dividends are taxed.
The Power of $50,000 in Dividend Investing, Explained - This article compares $50,000 in dividend income to wage income. The results are shocking.
Actual dividend increases in February 2020
Before jumping ahead to the dividend increases, I always like to review the expected dividend increases from the February article and discuss the actual results. There were a ton of companies that announced dividend increases in February. So, unlike most months, this section is going to be rather large. In the introduction, I mentioned there will be a few formatting changes in this article. The tweaks are small for this section. Here, I am going to show the percent dividend increase and notate whether it was an increase or decrease compared to last year. This is a small change; however, I realized I wouldn't always share those two pieces of information in the recap.
Company #1: Archer-Daniels-Midland (ADM) - ADM announced their dividend increase at the end of January. It is always funny to me when companies are "off" their schedule. As we mentioned, the dividend increase was not exactly lighting up the scoreboard.
Actual Dividend Increase - 2.8%
Greater than Last Year? - No, their dividend increase in 2019 was 4.4%
Company #2: Coca-Cola Co. (KO) - Both soda giants that are Dividend Aristocrats announced their dividend increase in February. I don't own shares of Coke; however, I do own shares of their competitor, Pepsi (PEP). Coke has not announced particularly large dividend increases over the last few years, so let's see the actual results.
Actual Dividend Increase - 2.5%
Greater than Last Year? - No, their dividend increase in 2019 was 2.56%
Looks like Coke continued their trend of only announcing a $0.01 per share increase in their dividend. Thus, it is not surprising to see that dividend increase decrease compared to last year.
Company #3: Genuine Parts Company (GPC) - I was very excited about this dividend increase due to the fact that my wife, and I have been building a position in this Dividend Aristocrat. GPC has been increasing their dividend for over 60 years. That sounds like a Dividend King in my book. What's nuts is that they are not the only Dividend King that announced an increase in February.
Actual Dividend Increase - 3.5%
Greater than Last Year? - No, their dividend increase in 2019 was 5.9%
Company #4: T. Rowe Price Group (TROW) - T. Rowe Price came out swinging in February. T. Rowe had the highest dividend increase on this list (maybe we need to create an award for the highest increase….). T. Rowe continues to deliver strong results, a strong balance sheet, and excellent returns to shareholders. That is why it is one of our favorite investments.
Actual Dividend Increase - 18.4%
Greater than Last Year? - YES! Their dividend increase in 2019 was 8.6%.
Company #5: Walmart (WMT) - This has been a roller coaster year for Walmart. The stock has not been able to find a consistent footing, especially after their earnings release and dividend announcement. The company is not a high yielding dividend stock. Worse yet, the company never breaks from their historical precedent of increasing their quarterly dividend by $.01 per share. So, unfortunately, their results are a lot like Coke's above.
Actual Dividend Increase - 1.89%
Greater than Last Year? - No, their dividend increase in 2019 was 1.92%
Company #6: PepsiCo - We have already covered Coke's lackluster dividend increase above. Pepsi's recent dividend history has been stronger than their competitors. Did they once again top them in the "Battle of Dividend Increases for Soda Giants?" You bet they did!
Actual Dividend Increase - 7%
Greater than Last Year? - YES! Their dividend increase in 2019 was 2.9%
Company #7: The Wendy's Company (WEN) - I predicted that Wendy's would increase their dividend in February, like last year. However, I neglected to consider that Wendy's had already increased their dividend in October….ahead of schedule. While it would have been awesome for them to announce another increase, I understand why they didn't. Plus, with launching breakfast, that surely requires a lot of cash.
Company #8: United Parcel Services (UPS) - With the poor earnings results from FedEx (FDX), my expectations for UPS had been lowered. Despite their status as an elite shipping company, my mind convinced me that the dividend increase was very weak. It turns out, I should have simply expected that their dividend increase would be in line with history. Because man, their 2020 dividend increase was right on the money with their 2019 dividend increase.
Actual Dividend Increase - 5.3%
Greater than Last Year? - No, their dividend increase in 2019 was 5.5%
Company #9: Home Depot, Inc. (HD) - Home Depot's dividend increase came at the end of the month. It was a bright spot during a very dark week for the market. Despite the coronavirus news and the subsequent red days in the market that ensued, Home Depot released strong earnings and a very nice dividend increase.
Actual Dividend Increase - 10.3%
Greater than Last Year? - No, their dividend increase in 2019 was 32%. Let's be honest, it was going to be very difficult to top their 2019 performance.
Company #10: 3M Company (MMM) - I have never been shy about my love for 3M on this website. The company has a strong history of dividend increases and is a titan in many industries. Looks like we found the other Dividend King on this list, eh? 3M's stock price has fallen over the last several months, so we have taken time to build my position, and my wife's, and lower our cost basis in this company. Thinking long term with this one. Their dividend increase was underwhelming, but not surprising, given the company's performance over the last few months.
Actual Dividend Increase - 2.1%
Greater than Last Year? - No, their dividend increase in 2019 was 5.8%.
Company #11: Canadian Imperial (CM) - Canadian Imperial was not included in the article. However, since Lanny and I both own this Canadian Bank, I thought that they should be added to the article. Canadian Imperial increases their dividend twice a year, once in February and once in August. So, let's compare this dividend increase to their February 2019 dividend increase.
Actual Dividend Increase - 1.4%
Greater than Last Year? - No, their dividend increase in 2019 was 2.9%.
Expected dividend increases in March 2020
Wow, those were a lot of dividend increases. I needed to take a break, get a cup of coffee, and regroup before discussing the expected dividend increases in March. Luckily, there aren't very many expected dividend increases. Like the last section, I am changing up the format slightly. There were a few data points I wanted to highlight: dividend increase last year, five-year average dividend growth rate, and the anticipated timing of the dividend increase. For the last one, I will state whether we are expecting to receive the dividend increase at the beginning, during the middle, or at the end of the month. That way, we can plan our calendars accordingly!
Company #1: Colgate-Palmolive (CL) - The first company on this list is a consumer staple with a long history of increasing their dividend. The company's stock price slumped in November 2019; however, after a strong earnings release, their stock price rose dramatically in January/February 2020. Now, the company trades at a high valuation and a dividend yield below 2.5%. Not the best combination for investors like us. They certainly wouldn't pass our stock screener.
Last year's dividend increase - 2.4%
Five-year average DGR - 3.63%
Expected timing of Dividend Increase Announcement - Beginning of the month
Company #2: General Dynamics (GD) - Lanny has been building a position in General Dynamics over the last several months. They are not a company that I have followed closely, historically. However, their reputation is great. Clearly, they have a strong dividend growth rate based on their consistent, 10%ish average dividend growth rate. Sometimes, the consistency can be appreciated. Especially, this kind of consistency.
Last year's dividend increase - 9.7%
Five-year average DGR - 10.47%
Expected timing of Dividend Increase Announcement - Beginning of the month
Company #3: Oracle (ORCL) - Oracle is a major player that dominates cloud infrastructure and applications. Honestly, I don't have to tell, or sell, you about the merits of this company. Their dividend growth has been impressive over the last few years. After all, look at their dividend increase in 2019. 26.3% will be very tough to beat, as it was way higher than their 5-year average. This is a hard dividend increase to predict, which is why I am excited to see what they have up their sleeve in 2020.
Last year's dividend increase - 26.3%
Five-year average DGR - 15.6%
Expected timing of Dividend Increase Announcement - Middle of the month
Company #4: Realty Income (O) - We all love the monthly dividend paying company. Realty Income frequently increases their dividend, so I am not going to show the same list for them that I did for the other 3. If you are looking for a consistent, predictable REIT, look no further. They are one of the best in class. Their dividend increases are not large, but the frequency of them is very nice. Realty Income will announce their dividend in the middle of the month
While there are definitely more companies out there expected to increase their dividend, these are the four that I wanted to highlight. Man do I love dividend growth investing. All of these dividend increases, large or small, are earned without even lifting a finger. Sure, some are disappointing. But still, even with the disappointment, the increase pushes you one step closer to financial freedom. That's what it is all about and why we will always tell you that EVERY DOLLAR COUNTS. Save every penny you can and find a way to turn it from an expense and into an income producing dividend growth stock.
What dividend increases did you receive in February? Wasn't that TROW dividend increase great? Are you bothered by any of the disappointing dividend increases from the month? Or do you think low dividend increases are the new norm for 2020?
Further, I would love to hear your feedback about the changes in formatting to the article. Was the new information helpful and beneficial? What other information would you potentially like to see?
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
This article was written by