The beauty of dividend growth investing is…well, the dividend growth.
Most companies reward their shareholders with predictable yet modest (think low single digit) dividend raises every year. Nothing wrong with that, and there are plenty of those companies to choose from on David Fish’s list of Dividend Champions, Contenders and Challengers.
However, this month something different happened.
In the span of about a week three companies in my portfolio announced significant double digit dividend increases.
In this post I go over these companies and their dividend increases, their ex-dividend dates and what these raises mean for my forward dividend.
The first company that delivered a positive dividend surprise for me was T. Rowe Price (TROW). The company boosted their dividend from $0.57 to $0.70, a 22.8% increase (see the purple bar in the figure below).
With my 25 shares of TROW, this means that my yearly dividend income will go from $57 to $70. The company will trade ex-dividend on March 14.
My second February dividend booster came from Cisco Systems (CSCO). Encouraged by the new US Tax Law, the company started to repatriate some of it’s overseas billions. Shareholders like me are benefiting from this move as some of this cash gets deployed in the form of buy-backs and dividend raises.
Cisco Systems - already a hefty dividend payer as compared to the broader tech sector - raised their dividend from $0.29 to $0.33, a 14% increase.
As I hold 100 shares of Cisco in my portfolio, this boost makes for easy math. My yearly payout will go from $116 to $132. The company will trade ex-dividend on April 4.
The last dividend boost I want to highlight here is the one from Abbvie (ABBV). The company, famous for it’s best selling drug Humira, declared a quarterly dividend of $0.96 per share, a 35% (!) increase compared to it’s prior dividend of $0.71.
Going forward, this monster dividend raise make my 40 shares of Abbvie yield $153.60, quite a jump from the prior $113.60. Abbvie will trade ex-dividend on April 12.
Three fantastic dividend increases bodes well for the rest of 2018. Just these raises alone provided a $69 dollar increase of my yearly forward dividend income. As their ex-dividend dates are still a few weeks away, investors are able to benefit from these increased pay-outs.
How is your February so far, and its dividend increases? Leave a comment/reply to share your thoughts!