Apple, 10 Other Companies To Announce Dividend Increases

This is the latest in my series of articles where I provide predictions of annual dividend increases for a variety of long-term dividend growth companies. Back at the end of March, I provided predictions for 10 dividend growth companies that have historically announced annual payout increases in the first half of April. In this article, I’ll look at another 11 dividend growth companies that I expect will announce their annual dividend increases in the latter half of April.

Here are the results from my last article (the original predictions are available here), followed by my predictions for the dividend increases that I’m expecting to be announced in the second half of April:

(All yields are based on stock prices at the market close on Thursday, April 14th.)

Results for Dividend Increase Announcements from the First Half of April

AptarGroup (ATR) – 28 years of dividend growth

Prediction: 3.9 – 7.9% increase to $1.58 – $1.64

Actual: 0% increase to $1.52

Forward yield: 1.29%

Dispensing products producer AptarGroup has until the end of the year to boost its dividend to keep its status as a dividend growth company.

American Water Works Company (AWK) – 12 years

Prediction: 7.9 – 10.0% increase to $2.60 – $2.65

Actual: Deferred to second half of April

New Jersey-based utility American Water Works will probably announce its dividend increase during the third week of April.

Costco Wholesale Corporation (COST) – 18 years

Prediction: 13.9 – 17.7% increase to $3.60 – $3.72

Actual: 13.9% increase to $3.60

Forward yield: 0.61%

The warehouse store chain rewarded investors with another double-digit boost in line with the company’s decade-long dividend growth average.

H. B. Fuller (FUL) – 53 years

Prediction: 7.5 – 11.9% increase to $0.72 – $0.75

Actual: 13.4% increase to $0.76

Forward yield: 1.08%

The specialty chemical company made up for last year’s 3% boost with a good double-digit increase.

Johnson & Johnson (JNJ) – 59 years

Prediction: 6.6 – 8.0% increase to $4.52 – $4.58

Actual: Deferred to second half of April

The health care giant will announce its 60th annual dividend boost in the second half of April.

Lindsay Corporation (LNN) – 19 years

Prediction: 4.5 – 9.1% increase to $1.38 – $1.44

Actual: 0% increase to $1.32

Forward yield: 0.90%

The irrigation and infrastructure equipment company is at risk of losing its status as a dividend growth company. Lindsay has until the end of the year to increase its dividend to retain it.

The Procter & Gamble Company (PG) – 66 years

Prediction: 3.0 – 5.0% increase to $3.5836 – $3.6532

Actual: 5.0% increase to $3.6532

Forward yield: 2.30%

This year’s increase from the consumer products company is right in line with its 10-year growth average.

The Southern Company (SO) – 20 years

Prediction: 2.3 – 4.5% increase to $2.70 – $2.76

Actual: Deferred to second half of April

The electric utility should announce its annual dividend increase in the latter half of the month.

The Travelers Companies (TRV) – 19 years

Prediction: 9.1 – 11.4% increase to $3.84 – $3.92

Actual: Deferred to second half of April

Insurer Travelers should announce its annual dividend increase when it releases first quarter earnings results on April 19th.

Value Line (VALU) – 7 years

Prediction: 4.5 – 6.8% increase to $0.92 – $0.94

Actual: Deferred to second half of April

Financial analysis company Value Line should announce its latest increase in the last week of April.

Predictions for Dividend Increases for the Second Half of April

Here are my predictions for the 11 dividend increases I expect in the second half of April:

Apple (AAPL) – 9 years of dividend growth

The largest company in the United States by market cap is poised to continue building its dividend growth record. Apple saw sales growth across all its business segments, with an overall increase in sales of 33%. This, in turn, resulted in EPS growth of 70% to a net $5.61. Apple continues to deliver in fiscal 2022, with EPS growth of 25% in the first quarter, despite the potential for supply chain issues from manufacturing plants in China. Investors can expect to continue to be rewarded after 2020’s stock split and last year’s 7% increase with a boost around the company’s 10% average growth rate as Apple completes its first decade of dividend growth.

Prediction: 9.1 – 13.6% increase to $0.96 – $1.00

Predicted Forward Yield: 0.58 – 0.60%

Ameriprise Financial (AMP) – 16 years

With the stock market hitting all-time highs at the end of 2021, the asset and wealth manager posted massive earnings growth for the full year. Boosted by acquisitions, assets under management hit $1.4 trillion and revenue growth occurred across all of Ameriprise’s business segments. With the businesses firing on all cylinders, Ameriprise nearly doubled adjusted EPS from 2020 to 2021. And although burdened by a heavy debt load, a payout ratio of 20% leaves plenty of room for a dividend increase higher than the company’s 5-year growth rate of 9%.

Prediction: 12.8 – 15.0% increase to $5.10 – $5.20

Predicted Forward Yield: 1.75 – 1.79%

First Financial Bankshares (FFIN) – 11 years

This mid-cap bank serves several different areas across Texas. First Financial’s dividend growth record reaches back to 1994, pausing only in 2010 and 2011 in the aftermath of the financial crisis. Since restarting its dividend growth in 2012, the company has compounded its payout at more than 10%. The company’s payout growth seems to have peaked last year with a boost of 15%. While earnings growth continues at double-digit rates, it’s unlikely that First Financial will beat last year’s dividend increase as EPS growth slowed to a still-good 12% in 2021. Investors can expect a boost slightly less than last year’s increase.

Prediction: 10.0 – 13.3% increase to $0.66 – $0.68

Predicted Forward Yield: 1.58 – 1.63%

W. W. Grainger (GWW) – 50 years

Between continued earnings growth and share buybacks, Grainger is knocking it out of the park when it comes to EPS growth. With the economy recovering in the latter half of 2021, revenues grew 16% for the full year and earnings hit new highs, with adjusted EPS up 23%. Grainger expects the growth to continue, and is projecting another 23% EPS growth in 2022. Although the cash flow supports a good increase this year, the industrial distributor’s dividend growth has slowed in recent years, settling at last year’s 6% boost. Investors can expect an expansion from that level, but not much beyond 10% as this conservatively managed company starts its second half century of dividend growth.

Prediction: 6.8 – 10.5% increase to $6.92 – $7.16

Predicted Forward Yield: 1.41 – 1.46%

IBM (IBM) – 26 years

Although the technology consulting and software company recently completed a quarter century of dividend growth, IBM’s dividend growth has been minimal as it focuses on debt reduction. Last year’s annual boost was 4 cents – less than 1%, and the company’s 5-year growth rate is below 5%. So even though IBM produced 16% EPS growth in 2021 – even after accounting for the spin-off of its infrastructure subsidiary, Kyndryl – investors won’t see fast dividend growth until the company can pay down more of its debt.

Prediction: 0.6 – 1.2% increase to $6.60 – $6.64

Predicted Forward Yield: 5.21 – 5.25%

Lakeland Bancorp (LBAI) – 11 years

Like many banks, this New Jersey-based company saw a boost to cash flow and earnings coming out of the pandemic by being able to reduce provisions for credit losses as the economy rebounds. Assets also grew by 7% at Lakeland – in part due to the company’s acquisition of 1st Constitution Bancorp – contributing further to earnings growth. 2021 EPS were up 64% to $1.85, giving Lakeland a payout ratio below 30% and plenty of room for another annual dividend boost. With a 10% average growth rate over the last decade, investors can expect Lakeland to announce an increase potentially larger than last year’s 8% boost.

Prediction: 7.4 – 14.8% increase to $0.58 – $0.62

Predicted Forward Yield: 3.65 – 3.91%

MetLife (MET) – 9 years

Investors in the insurance company can look forward to its 10th year of dividend growth. However, it will probably be a small boost this year. While adjusted EPS were up 42%, the bulk of that increase came from investment returns, which were up 25%. And while growing earnings are good, companies generally want to see them come from the core business and not from non-repeatable events. Given the slow growth in premiums, I think we’ll see an increase along the lines of last year’s 4% boost.

Prediction: 4.2 – 6.3% increase to $2.00 – $2.04

Predicted Forward Yield: 2.83 – 2.89%

Pool Corporation (POOL) – 11 years

Pool Corporation is a wholesale distributor of swimming pool and other backyard products. The company is knocking it out of the park, growing its adjusted EPS in 2021 by 78% despite issues with its supply chains. The company is also looking forward to 2022 EPS growth of between 12% and 17%. Although the company has a decent amount of debt, earnings growth like this makes it easy to manage. And although the company has established a history of dividend boosts in the teens, Pool Corporation rewarded investors with a massive 38% increase last year. With the earnings growth, investors could see another boost along the same lines.

Prediction: 25.0 – 31.3% increase to $4.00 – $4.20

Predicted Forward Yield: 0.97 – 1.01%

Portland General Electric (POR) – 15 years

The Oregon-based utility recently reaffirmed its long-term goal of growing EPS by 4 – 6% annually. After hitting a bump in 2020 due to the pandemic, Portland GE has resumed its growth trend, reporting EPS of $2.72 in 2021 – compounding earnings by 6.7% over those two years. The company is guiding EPS growth in 2022 to up to 6%; much of this depends on whether the Oregon Public Utilities Commission allows a rate increase that the company is requesting. Like most utilities, Portland GE’s growth tends to be fairly steady. Given the uncertainty with the possible rate increase, look for an increase around the company’s decade-long growth rate of 5%.

Prediction: 4.7 – 5.8% increase to $1.80 – $1.82

Predicted Forward Yield: 3.31 – 3.35%

Tetra Tech, Inc. (TTEK) – 7 years

With the continuing focus on environmental causes, the engineering and consulting company continues to see rapid growth. On top of 35% EPS growth in fiscal 2021, Tetra Tech saw 30% EPS growth in the first quarter of fiscal 2022 which led the company to boost its full year expectations. The fast growth that the company has been experiencing has allowed it to reward investors with outstanding dividend growth – compounding its payout by more than 16% over the last 5 years. And the continued fast growth means that investors can look forward to another big dividend increase.

Prediction: 12.5 – 17.5% increase to $0.90 – $0.94

Predicted Forward Yield: 0.61 – 0.63%

UGI Corporation (UGI) – 34 years

The worldwide natural gas company operates across the entire energy chain – it’s involved in domestic and international distribution, operates midstream assets, owns electrical generation facilities, and owns several natural gas and electric utilities. UGI is continuing to grow and recently acquired West Virginia natural gas distributor Mountaineer Gas Company. With a wide range of businesses, UGI is able to offset drops in one area with increases in others; in 2021, a decrease in natural gas sales in the United States were offset with increased sales in Europe due to colder weather, resulting in adjusted EPS growth of 10%. UGI is also looking to another 6% EPS growth in 2022, consistent with its long-term growth target of 6 – 10%. With EPS growth on track, investors can look forward to a boost this year at the company’s long-term dividend growth rate of 7%.

Prediction: 5.8 – 8.7% increase to $1.46 – $1.50

Predicted Forward Yield: 4.09 – 4.20%

Summary

The first half of April was pretty quiet for dividend growth companies. While I provided predictions for 10 companies, only five announced their annual increases.

And two of those five – AptarGroup and Lindsay Corporation – held their dividend rate flat.

The good news was that of the remaining three companies, two of the increases were in the 13 – 14% range – both Costco and H. B. Fuller announced increases in this range. The remaining company, Procter & Gamble, announced a 5% boost, as expected.

I expect the five companies that deferred their dividend announcements to make them in the latter half of April. They’ll join some widely held companies – like Apple and IBM – in announcing their annual boosts.

Investors can look forward to the announcements. The big one will be from Pool Corporation, which will likely follow up last year’s 30% boost with another one at the same level. There will be several other double-digit boosts in the next two weeks. Tech behemoth Apple, financial companies Ameriprise, First Financial and Lakeland Bancorp, and technology consulting company Tetra Tech will likely all come through with 10%+ increases. Utility companies Portland GE and UGI should come through with mid-single-digit boosts.