Dividend investors understand the power of dividends in boosting a portfolio’s overall returns, and that power is only amplified by stocks that enjoy annual increases to their dividend payments.
Whether or you use your dividends as income, or use them to reinvest in the underlying security, annual dividend increases make a huge difference in the value of any dividend stock.
Dividend increases not only boost a stock’s income, but also serves to boost investor confidence in the stock. A company’s management would not vote to boost the dividend payment if it was not confident in the company’s ability to grow and afford the higher dividend payment. This is a big reason why dividend stocks are viewed as so defensive during time of market uncertainty.
If you find yourself with some extra cash you want to put to work in the market, you may want to consider these stocks that each have histories of dividend increases and are about to announce their next increase during the month of April.
Semiconductor maker QUALCOMM (QCOM) has an eight year streak of dividend increases, and the stock is currently yielding a handsome 4.3%. QCOM does have a high payout ratio of 79.5%, so investors should not look for a huge increase when the company boosts its dividend mid-April. Last year QUALCOMM lifted its quarterly payout by 8.7% to $0.62, and a similar increase this year would see the distribution rise to $0.67 for an increase of 8%. QCOM sold off in the final months of 2018 before hitting a bottom in January and has trended higher over the last two months. There is fear that the trade war between China and the U.S. will hurt chip demand, and as expectations have risen that the two nations will reach a deal soon the entire sector has begun to recover. Look for the company to announce its next dividend hike during the second week of April with the stock trading ex-dividend in the final week of May.
Procter & Gamble (PG)
Consumer goods maker Procter & Gamble (PG) has enjoyed a strong run over the last twelve months and the stock is currently sitting just shy of its all-time high. The company is a true dividend aristocrat with a lengthy 62-year streak of dividend increases and the stock is currently yielding 2.8%. PG has a current payout ratio of around 65% so it can afford to extend its streak, but investors show not look for a huge increase, especially since the stock is already yielding close to 3%. The company has historically announced its annual increases during the second week of April, and it will likely keep to that timeline this year as well. Last year’s increase was a modest 3.9%, and this year’s increase will likely be around that same range given the current payout raio and yield. Look for the company to lift the quarterly distribution from $0.717 to around $0.745 for a 4% increase. The stock will trade ex-dividend about a week after the announcement is made.
Exxon Mobil (XOM)
Oil and gas giant Exxon Mobil (XOM) has boosted its dividend each of the last 36 years, and the stock currently offers a 4.0% yield. With a payout ratio of 71% investors should not expect a huge increase, but the company will definitely look to extend its impressive streak of increases. Last year saw the quarterly distribution rise 6.5% to 82 cents per share. This year’s increase will likely be in-line with last year’s, with the payout rising to around 87 cents. This would translate to a 6.1% increase. Exxon will announce its next dividend increase in the latter part of April with the stock trading ex-dividend mid-May.
W.W. Grainger (GWW)
W.W. Grainger (GWW) is another dividend aristocrat, and the company boasts a 47-year streak of dividend increases. The stock has a low 33.9% payout ratio so it can easily afford to extend its streak of increases when it announces its next distribution during the final week of April. Last year the company boosted its dividend by 6.2% and in the previous year by 5%. Look for a similar increase this year with the quarterly payment rising from $1.36 to around $1.44 for a 5.9% increase. The company will announce in the final week of April with the stock trading ex-dividend mid-May.