Hey guys it has been a while since my last dividend increase article. The reason is quite simple there were just not that many increases to write a whole article about. But in the mean time there were four companies which increased their dividend in the last two months.
Being a dividend investor has two major advantages, first of all you do not rely that much on the changes of the share price and when the stock price is on a very low level you just collect the dividends and maybe take advantage of the low share price and buy even more stocks. As I mentioned already since I have started to invest in dividend stocks I have not experienced one dividend cut so far and this time the following companies have increased their dividends:
- PEP: Yearly dividend from 3.01 to 3.22 USD 6.98% increase, this is the 44th year with a dividend increase. PEP is now yielding at 2.83% based on a current share price of 113.75 USD.
- CMI: Yearly dividend from 4.10 to 4.32 USD 5.37% increase, this is the 7th year with a dividend increase. CMI is now yielding at 2.62% based on a current share price of 164.95 USD.
- TGT: Yearly dividend from 2.40 to 2.48 USD 3.33% Increase, this is the 49th year with a dividend increase. TGT is now yielding at 4.93% based on a current share price of 50.31 USD.
- GIS: Yearly dividend from 1.92 to 1.96 USD 2.08% Increase, this is the 13th year with a dividend increase. GIS is now yielding at 3.66% based on a current share price of 53.62 USD.
In general all 4 dividend increases were solid ones and not really spectacular. But in the cases of GIS and TGT I did not expect a large dividend increase, based on their current business development. I think it is even better when the management acts responsible when their business is struggling a little bit. In the case of PEP, the increase is also OK especially as it is the 44th one in a row. There we can not expect that large increases anymore.
I was expecting a little more from CMI but the 5.37% are better than nothing.
Based on the numbers of shares I have of each company and the already published dividend increases it makes now an average dividend increase of 4.41%, which is behind my goal of 7.5%. But I am looking forward to seeing the remaining dividend increases this year MO, T, VZ and some others still have not announced their dividend increases for this year.
How much more income do I generate
In total I am generating now 44.03 EUR more dividend income before tax and based on a constant FX-Rate. If you look at this number, this does not look a lot but considering my current dividend yield before taxes of 3.92% it would mean an additional investment of 1 123.41 EUR. If I am looking at my current interest rate of my saving account of 0.30% I would need 14 676 EUR to generate an income of 44.03 EUR.
So, after all the 44.03 EUR do not look that bad anymore. Nevertheless I have to admit that I am behind my goal to generate an average increase of 7.5%. But let’s see what the other increases for the rest of the year will look like.
My new projected full year dividend income is now at 1 414.81 EUR after tax, that is almost double the income I had one year ago. Of course a lot comes from additional investments, but dividend increases are also a small part of it and the more stocks I have the higher will be the effect of dividend increases in the future.
What is your current dividend increase rate or are you actually tracking it?
Disclosure: Long GIS, TGT, CMI, PEP