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Buckle up, this is going to be a wild month. No, we aren’t talking about the Debt Ceiling negotiations. We aren’t talking about inflation, interest rates or a recession either. Instead, we are talking about dividend increases! We have found 4 companies that are expected to announce dividend increases in June. In this article, we will share the four expected dividend increases and some metrics about each of the companies. Plus, we share our expectations as well!
Why Dividend Increases Matter
Dividends are the foundation of our goal to reach financial freedom. We continuously invest in dividend growth stocks to grow our passive income. If you haven’t figured it out by now, we eat, sleep, and breathe dividends! In 2023, with high inflation, bank runs and other major events, buying undervalued dividend stocks that increase your dividend is as crucial as ever.
That is why dividend growth is a major deciding factor in all of our stock purchase decisions. It is the 3rd metric of our Dividend Stock Screener for a reason. For each stock, we review a company’s history of increasing dividends (consecutive annual dividend increases) and a company’s five-year average dividend growth rate!
Expected Dividend Increases In June 2023
Dividend Stock #1: Kroger (KR)
Kroger is one of the largest national grocery chains in the country. The company is a dividend growth machine. Last year’s dividend increase was over 20% and that crushed the company’s strong five-year average dividend growth rate. Kroger made waves when the company announced the acquisition of Albertsons. The acquisition will be heavily financed with debt. Therefore, I’m expecting the company’s dividend growth to slow down in 2023 and 2024. Rather than focus on strong dividend growth, I could easily see a situation in which the company focuses on improving the balance sheet and integrating the two companies. Plus, add in inflation, and you have the perfect storm of a low dividend growth year.
- Consecutive Dividend Increases: 16 Years.
- 2022 Dividend Increase: 23.8%.
- 5-Yr Average Dividend Growth Rate: 15.77%.
- Expected Timing of Dividend Announcement: End of Month.
Dividend Stock #2: Target (TGT)
Target is one of the largest retailers. We both have large positions in the red bullseye! Target shocked us all with a strong 20% dividend increase in 2022. However, the company is already setting the stage for low expectations in 2023. Low earnings expectations and, most likely, low dividend growth. The company, in its Q1 earnings results, noted slowing consumer spending and the impact inflation, tightening budgets and theft (yes, theft) are having on the company’s financials. With major headwinds in mind, I’m expecting Target’s dividend increase to be a low-single digit dividend increase this year.
- Consecutive Dividend Increases: 54 Years.
- 2022 Dividend Increase: 20%.
- 5-Yr Average Dividend Growth Rate: 11.74%.
- Expected Timing of Dividend Announcement: Beginning of Month.
Dividend Stock #3: Caterpillar (CAT)
Third on this list is Caterpillar. The equipment giant is down 11% year to date. Caterpillar is facing a familiar story as others right now. The stock had strong earnings last quarter, but the price fell due to potential headwinds the company will face for the rest of the year. That seems to be the story of 2023, right? However, Caterpillar is a Dividend Aristocrat in a cyclical industry. The stock has been there before and will continue to find ways to increase its dividend in the down years. The company announced a dividend increase in 2022 that was in line with its 5-year average dividend growth rate. 8% seems achievable this year; however, I could also see Caterpillar taking the conservative route and announcing a smaller dividend increase.
- Consecutive Dividend Increases: 29 Years.
- 2022 Dividend Increase: 8.1%.
- 5-Yr Average Dividend Growth Rate: 9%.
- Expected Timing of Dividend Announcement: Beginning of Month.
Dividend Stock #4: UnitedHealth Group (UNH)
One of the giants in the healthcare industry is on the path to becoming a Dividend Aristocrat. UnitedHealth is a major player in the consumer health space, a great sector to dominate. The cost of care continues to rise… and so do your premiums. UNH is set to continue to benefit from the bump. Luckily, they are also rewarding shareholders as well. The stock’s 5-year dividend growth rate is insane, at 17%. Let’s see what kind of increase the company announces this year. Unlike the last three, I don’t have a strong sense of what direction the company may go!
- Consecutive Dividend Increases: 13 Years.
- 2022 Dividend Increase: 13.79%.
- 5-Yr Average Dividend Growth Rate: 17.08%.
- Expected Timing of Dividend Announcement: Beginning of Month.
Summary
There we have it, 4 great dividend growth stocks that are expected to announce dividend increases in June 2023. Of course, there are plenty of other companies set to announce as well. We couldn’t include them all in this article. Plus, as you all know, there are always crazy twists and turns in the stock market. I’m sure there will be some random, surprise companies that announce dividend increases as well! The name of the game is growing your passive income without lifting a finger. Each one of these companies will allow you to do just that!
How many of the 4 dividend stocks do you own? What dividend increases are you expecting to receive in June? Are you excited for another fun month of investing?
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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