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. Dividend raises typically mean operations are doing well and management is confident enough about cash flows to give shareholders a raise. All in all, it’s a good sign.
I try to keep my eyes peeled for dividend raises from companies I’m invested in, as well as companies on my watch list. Some recent dividend increases include:
Harris Corporation (HRS) recently hiked its dividend by 13.5%, now paying out $0.42 quarterly per share. This is a nice increase from the old rate of $0.37 per share. I’m a happy shareholder in Harris, and I may even think about increasing my position as operations continue to do well and shares are currently attractively priced with a P/E of 14 and a yield of 2.90%. Harris now has 12 years of consecutive dividend raises under its belt. Great stuff!
Philip Morris International Inc. (PM) gave shareholders a nice raise, increasing its quarterly dividend by 10.6%. The new quarterly rate is $0.94 per share over the old dividend of $0.85. This is the 6th year of consecutive dividend raises, after being spun-off from Altria Group Inc. (MO) in 2008. Although PM is my biggest single position, I had seriously considered adding to it as shares had lingered for a few months. I decided against it as I’m trying to further diversify my portfolio, and going forward I’d like no one company being more than 5% of the portfolio. Nonetheless, this is a great holding and extremely shareholder friendly.
Altria Group Inc. (MO) joined its corporate cousin in handing out a generous dividend raise. They recently increased the dividend by 9.1%, now paying out $0.48 quarterly per share over the old rate of $0.44 per share. People keep counting MO out, and management keeps surprising investors and detractors alike. I recently increased my position in MO because I knew a dividend raise was on the way, my allocation to this company was relatively light and I thought it was attractively valued. This is the 45th year in a row that MO has raised the dividend, which is saying a lot about the management and culture of this company.
Realty Income Corp. (O) recently announced its 64th consecutive quarterly dividend raise, which is the 73rd dividend increase overall. The new rate adds up to $2.182 per share annually over the old rate of $2.179, which amounts to a .02% increase. Realty Income Corp. pays its dividend on a monthly basis. Although not much, this follows a much larger raise earlier this year and is on the back of an already above-average yield at 5.56%. O has 19 years of consecutive dividend raises, a mark it reached much earlier in the year. I’ve been aggressively building a position in this company, most recently adding to my position just earlier this month.
BHP Billiton plc (BBL) increased its semi-annual dividend by 3.5%, now paying out a new rate of $1.18 per share over the old rate of $1.14 per share. BBL now has 11 years of consecutive dividend raises it can brag about. BBL, like many foreign-based companies, pays its dividend on a semi-annual basis with an interim dividend payable in March and the final dividend payable in September. Although this raise wasn’t overly impressive or nearly as large as some of the raises it has given in recent years, it is a nice increase in the payout on the back of softening commodity prices. BBL’s profits have taken a hit lately, but the dividend is still well-covered and the company is showing its true colors by increasing the dividend during a rough patch in the business cycle.
The Bank of Nova Scotia (BNS) raised its dividend for the second time this year, recently announcing a 3.3% increase to $0.62 CAD quarterly per share over the old quarterly rate of $0.60 CAD per share. This raise comes on the back of a 5.3% increase earlier this year. Obviously, shareholders should be very happy with this second raise and with BNS being the most international of all the Canadian banks, business should continue to do well and allow dividend increases for the foreseeable future.
Toronto-Dominion Bank (TD) raised its dividend in kind for the second time this year as well, which shows the Canadian bank’s willingness to return cash to shareholders in meaningful ways. The recent dividend raise amounts to 4.7%, with the new payout of $0.85 CAD quarterly per share a nice increase over the old rate of $0.81 CAD per share. This raise comes after a 4.9% increase earlier this year. I’m a happy TD shareholder and plan on remaining so for as long as they continue this type of behavior.
How about you? Own a piece of any of these companies? Are you happy with these raises?
Full Disclosure: Long all aforementioned securities.
Thanks for reading.
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Edit: Corrected HRS dividend increase information.