Mongkol Onnuan
Every month we feature the expected dividend increases set to occur that month. Why? Since we are passionate dividend investors, we love seeing our dividend income grow without lifting a finger. Hence why we are always on the lookout for upcoming dividend increases. This article will discuss 5 expected dividend increases in October 2022.
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, because inflation in 2022 continues to soar.
That is why dividend growth is a major deciding factor in all of our stock purchase decisions. It is the 3rd metric of 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.
Actual Dividend Increases in September 2022
Before we look ahead to an exciting month of dividend increases, let’s look back and see if the 8 featured dividend stocks from last month’s article delivered strong dividend increases.
Our article last month featured 8 expected dividend increases projected for September. Here were the results.
- McDonald’s (MCD): No dividend increase as of the time of this article.
- Starbucks (SBUX): 8.2% dividend increase.
- Lockheed Martin (LMT): 7.1% dividend increase.
- Microsoft (MSFT): 10% dividend increase.
- Philip Morris (PM): 1.6% dividend increase.
- Store Capital (STOR): 6.5% dividend increase……and an acquisition.
- Texas Instruments (TXN): 7.8% dividend increase.
- Verizon (VZ): 2% dividend increase.
There were definitely a few surprises from the list above. The most shocking thing is that we STILL haven’t heard from McDonald’s. The fast-food giant is relatively consistent with its dividend increase announcements. Same week. Same day. Even the same time each month. However, here we are….and the company still hasn’t made an announcement. It’ll come in October, but definitely shocking.
Let’s talk about the positive. STORE Capital gave investors a double banger news. First, they announced they were getting acquired. Then, on top of it, they still announced a dividend increase. The acquisition will provide a nice pop and gain for investors. However, it will definitely be interesting to see how people replace the dividend income lost once STORE Capital’s acquisition is complete.
Lastly, Texas Instruments. I’ve been pumped up building my TXN position over the last few months. I now own 8 shares. In fact, it is one of my recent stock purchases. My goal is to increase the position to 20 shares by the end of the year. We knew TXN would announce a dividend increase this month. While the increase was below its 5-year average growth rate, it was very exciting to still receive a high single-digit dividend increase.
Expected Dividend Increases in October 2022
September was an action-packed month. There were some huge dividend increases announced. Now, let’s look ahead to October 2022. The following dividend stocks are expected to announce dividend increases in October.
Dividend Stock #1: AbbVie (ABBV): We are going to start this article off with a potential nail-biter. AbbVie typically announces its dividend increase at the very end of October or beginning of November. The last two years have been October. AbbVie is one of my favorite dividend stock holdings and I could not be more pumped up about the stock’s upcoming dividend increase. They are yielding 4.2% and always announce strong dividend increases. High dividend yield and high dividend growth is always the perfect dividend stock portfolio.
- Consecutive Dividend Increases: 10 Years.
- 2021 Dividend Increase: 8.5%.
- 5-Yr Average Dividend Growth Rate: 17.69%.
- Expected Timing of Dividend Announcement: End of month.
Dividend Stock #2: Exxon Mobil (XOM): Now the fun starts. Last month, Exxon Mobil waited until the last possible second to announce a dividend increase and retain its Dividend Aristocrat status. As a result, the company announced a dividend increase in October instead of its standard April dividend increase announcement. Now, it is looking like October is the new dividend increase announcement. Oil stocks have been on fire this year, up nearly 40% YTD. Hopefully they will announce a stronger increase than their pathetic 1.1% dividend increase in 2021.
- Consecutive Dividend Increases: 39 Years.
- 2021 Dividend Increase: 1.1%.
- 5-Yr Average Dividend Growth Rate: 3.3%.
- Expected Timing of Dividend Announcement: End of month.
Dividend Stock #3: Rockwell Automation (ROK): Rockwell Automation is in the same camp as AbbVie. This announcement could either be at the very end of October or beginning of November. I know Lanny is going to be very pumped up for this dividend increase. Down 36% YTD, Rockwell Automation is now yielding above 2% once again. Couple that with a double-digit dividend growth rate, you have a solid dividend stock to keep an eye on.
- Consecutive Dividend Increases: 12 Years.
- 2021 Dividend Increase: 4.7%.
- 5-Yr Average Dividend Growth Rate: 8.1%.
- Expected Timing of Dividend Announcement: End of month.
Dividend Stock #4: PPG Industries (PPG): Let’s head over to Pittsburgh to talk about this dividend king that is expected to announce a dividend increase in October. The massive paint company just earned its Dividend King status last year. Now, it is time to continue building on the streak. PPG is now yielding 2.25% after falling in 2022. The company’s high single digit dividend growth rate is solid when coupled with a 2.25% dividend yield.
- Consecutive Dividend Increases: 50 Years.
- 2021 Dividend Increase: 9.3%.
- 5-Yr Average Dividend Growth Rate: 7.8%.
- Expected Timing of Dividend Announcement: Middle of month.
Dividend Stock #5: AEP (AEP): I’m pretty amped up for this dividend increase. I’ve owned shares in the Columbus, Ohio headquartered utility company for quite some time now. The company is just a solid performer. The dividend increases are never stellar and never poor, just nice and consistent, exactly what you want from a utility stock. I can’t wait to see what AEP delivers. This should push them halfway towards their journey to becoming a Dividend Aristocrat.
- Consecutive Dividend Increases: 12 Years.
- 2021 Dividend Increase: 5.4%.
- 5-Yr Average Dividend Growth Rate: 5.7%.
- Expected Timing of Dividend Announcement: Middle of month.
Summary – Expected Dividend Increases in October
As you can see, October will be relatively quiet compared to September. Still, there are some solid dividend stocks: one Dividend King, one Dividend Aristocrat, and a few other companies with double digit dividend increases. From this list, I own 3 of the 5 (ABBV, XOM and AEP). I cannot wait for these dividend increase announcements. This is why we love dividend investing. This is what it is all about – seeing your dividend income increase without lifting a freaking finger. Let’s see if these 5 dividend increases happen as expected in October.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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