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We love dividend increases! We monitor dividend increases like a hawk and are always checking the newswire to see which companies have announced dividend increases. Each month, we publish an article looking ahead to the expected dividend increases in the coming months. In August, we are expecting 5 dividend increases! This article summarizes each and shares each company’s recent dividend history.
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!
If the goal is to produce a passive income stream that will one day cover our expenses, making sure that income stream grows is critical. Without growth, your dividend income stream will lose purchasing power to inflation. In 2022, this is a major problem given the record-setting inflation and rising interest rates.
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!
Each week, we discuss the major dividend increases from the week before. Clearly, as you all are learning, we are passionate about dividend and dividend growth!
Actual Dividend Increases in July 2022
Before jumping ahead to the expected dividend increases in August, let’s look back at the results from July. While there were a few bright spots, not surprisingly, July saw less than stellar dividend increases for some companies that traditionally announce solid dividend increases. Why am I saying that’s not surprising? Well, record inflation, high interest rates, booming gas prices, and recession warnings dominate the headlines.
Our article last month featured 8 expected dividend increases projected for July. Here were the results.
- Cummins (CMI) – 8.3% increase
- Smucker (SJM) – 3% increase
- Stanley Black & Decker (SWK) – 1.3% increase
- Hershey (HSY) – 15% increase
- Scotts Miracle-Gro (SMG) – Not announced in July!
- Norfolk Southern (NSC) – Not announced in July!
- Walgreens Boots Alliance (WBA) – .5% increase
- Cintas (CTAS) – 21.1% increase
Expected Dividend Increases in August 2022
With July behind us now, let’s look ahead to August. Hopefully, all 5 of the following companies crush it and announce 5 strong dividend increases in August!
Dividend Stock #1: Altria Group (MO) – Now, this will be a fascinating dividend increase announcement. Altria Group is down in 2022 and their dividend yield has soared to over 8%. The company’s stock continues to remain stagnant due to the constantly changing news about the company’s terrible JUUL Investment. What started as a promising investment years ago continues to drag the company’s earnings down. What started as a $12b+ investment has now been written down significantly due to lower valuations. Plus, the regulators are flip-flopping on whether to ban the product or not in the US. Altria continues to remain in a holding pattern as these important details get sorted out. We’ve already seen the company’s dividend growth slow down significantly in recent years. I seriously doubt 2022 is the year Altria Group returns to dividend growth glory.
- Consecutive Dividend Increases: 12 Years
- 2021 Dividend Increase: 4.7%
- 5-Yr Average Dividend Growth Rate: 8.23%
- Expected Timing of Dividend Announcement: End of Month
Dividend Stock #2: Nordson (NDSN) – Come on everyone, you know what I love more than anything else, right? A company that is headquartered in our home state. Nordson adds a cherry on top because it is based in Cleveland, Ohio as well! Nordson is a quiet Dividend Aristocrat. The company’s business centers on products and systems that dispense adhesives, coatings, polymers, sealants, and others. The company’s dividend yield, 1.4%, is in line with the market. Couple that with a strong dividend growth rate, you can see why many like this company.
- Consecutive Dividend Increases: 41 Years
- 2021 Dividend Increase: 30.8%
- 5-Yr Average Dividend Growth Rate: 13.95%
- Expected Timing of Dividend Announcement: Middle of Month
Dividend Stock #3: Illinois Tool Works (ITW) – An almost Dividend King is set to increase its dividend this month! We both own Illinois Tool Works and bought it several years ago. We haven’t looked back since. The competitor to 3M Company (MMM) has been a welcome addition to our portfolio. Last year’s dividend increase was lower than its 5-year average dividend growth rate. With the current environment, I’d expect a similar trend in 2022.
- Consecutive Dividend Increases: 46 Years
- 2021 Dividend Increase: 7%
- 5-Yr Average Dividend Growth Rate: 13.75%
- Expected Timing of Dividend Announcement: Beginning of Month
Dividend Stock #4: Dover Corporation (DOV) – Wow. This is a big month for heavy equipment and manufacturing companies. This is the third consecutive company on our list in the sector. Dover Corporation “provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide.” What sets Dover apart from the rest of the companies on this list is the fact they are a Dividend King! In fact, they have one of the longest dividend increase streaks on this list. Unfortunately, the company’s dividend growth history is awful. With a yield of 1.5% and a DGR of 2.6%, it’s not the combination we want to see for our portfolio.
- Consecutive Dividend Increases: 66 Years
- 2021 Dividend Increase: 1%
- 5-Yr Average Dividend Growth Rate: 2.61%
- Expected Timing of Dividend Announcement: Beginning of Month
Dividend Stock #5: Federal Realty Investment Trust (FRT) – Last, but definitely not least, another Dividend King to round out our list. Today though, we are going to head to the REIT sector. FRT owns shopping centers and major complexes in major cities on the coast. They aren’t the highest-yielding REITs and their dividend growth has been slow and steady. However, the company prides itself on its 54+ consecutive years of increasing its dividend. In 2022, I don’t see any reason why they won’t make it 55 consecutive years.
- Consecutive Dividend Increases: 54 Years
- 2021 Dividend Increase: 1%
- 5-Yr Average Dividend Growth Rate: 2.05%
- Expected Timing of Dividend Announcement: Beginning of Month
Summary
I’m not going to lie. This isn’t the most exciting month of dividend increases. Outside of Altria, the group of expected dividend increases in August does not have much name recognition. But that is the point, isn’t it? Dividend investing doesn’t have to be exciting. In our world, boring is great. We want companies to go about their business, grow earnings, and increase its dividend every year. That’s why we love putting this summary together every month and why we are such passionate dividend growth investors!
How many of the 5 expected dividend increases in August are you set to receive? What other companies are set to increase your income this month? What dividend increases did you receive in July?
Bert
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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