Friday, April 26, 2013
Recent Dividend Increases
As a dividend growth investor, one of the primary objectives I seek is passive dividend income from my investments that increases over the rate of inflation, annually. It's always wonderful news when companies decide to reward loyal long-term shareholders with a dividend raise. Some recent dividend increases include:
The Procter & Gamble Company (PG) raised its dividend 7%. The new rate of $0.6015 per share quarterly is a nice increase over the old rate of $0.562 quarterly per share. Overall, I love this company. Some investors have questioned some recent moves, lack of innovation over the last few years and management. But, I consider this one of those core dividend stocks that most dividend growth investors would be wise to hold. PG owns 26 billion-dollar brands. Not particularly cheap right now, but does have a yield just north of 3% after the recent raise. A pullback of 5% or more from here might get me interested in adding to my position. PG now has 57 consecutive years of dividend raises. That's a prime example of rewarding shareholders through all kinds of economic cycles and macroeconomic concerns. Great stuff!
Johnson & Johnson (JNJ) recently increased its quarterly dividend from $0.61 per share to $0.66 per share. This is an increase of 8.2%. Simply fantastic. This is Johnson & Johnson's 51st consecutive year of dividend growth. Amazing, right? Like PG, these shares aren't particularly cheap here but JNJ is one of my biggest investments and for good reason. The biggest, and one of the best diversified healthcare companies in the world. I'm glad that JNJ is one of my biggest positions. I don't have plans to add capital here in the short-term, but I love this company long-term.
Exxon Mobil Corporation (XOM) also reported a nice increase in its dividend, up 10.5% from an old quarterly rate of $0.57 per share to the new rate of $0.63 per share. You know, I'm far from perfect and as an investor I'm learning every day. I do somewhat regret my sale of Exxon Mobil shares as I felt the low yield combined with the (then) low dividend growth rate warranted a sale. Looking back on it I feel justified, but not long after I sold my shares XOM decided to start hiking the dividends at a more attractive pace. I may re-initiate a position with this company in the future, as I like the massive scale in an industry where scale is extremely valuable. XOM now has 31 years of consecutive dividend growth.
Chevron Corporation (CVX), another oil supermajor, recently hiked the dividend by 11.1%. The new rate of $1.00 quarterly per share is a fairly substantial increase over the old rate of $0.90 per share quarterly. I'm currently long CVX and find the company very attractive, even at current prices and energy is likely where capital is going to go next month. This is Chevron's 26th consecutive year of raising the dividend and this streak doesn't appear to be ending anytime soon. Oil is still in high demand worldwide, and as middle class consumers rise up from extreme poverty in many developing nations there will only be increased demand on oil and energy in general.
Kinder Morgan Inc. (KMI) raised the dividend for the 6th quarter in a row, from $0.37 per share quarterly to $0.38 per share quarterly. This is an increase of only 2.7%, but this is the second dividend increase so far this year (the first being 2.8%) for KMI and I anticipate similar raises the rest of the year. I love KMI at these prices, and if I had a smaller position I'd be actively increasing it. Heck, I might do so anyway. This is a great business model (energy pipelines and energy storage) and KMI is one of the biggest and best at what they do.
Excited about these recent dividend raises?
Full Disclosure: Long PG, JNJ, CVX, KMI
Thanks for reading.
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