VZ - 7 Expected Dividend Increases In September

2023-08-31 11:05:00 ET

Summary

• McDonald's, Starbucks, Lockheed Martin, Microsoft, Philip Morris, Texas Instruments, and Verizon are expected to announce dividend increases in September 2023.
• McDonald's and Starbucks have strong dividend growth histories and are expected to announce solid increases.
• Lockheed Martin, Microsoft, Philip Morris, Texas Instruments, and Verizon are expected to announce modest dividend increases.

We’re back with another monthly installment of our monthly dividend increase series. We LOVE dividend increases and follow them like hawks. Therefore, we compiled a list of the companies that are expected to announce dividend increases in the coming month. Trust us, you are not going to want to miss some of the dividend increases in September!

Why Dividend Increases Matter

Dividends are the foundation of our goal to reach financial freedom. We continuously invest in dividend growth stocks to grow our passive income. If you haven’t figured it out by now, we eat, sleep, and breathe dividends! In 2023, with high inflation, bank runs, and other major events, buying undervalued dividend stocks that increase your dividend is as crucial as ever.

That is why dividend growth is a major deciding factor in all of our stock purchase decisions. It is the third metric of our Dividend Stock Screener for a reason. For each stock, we review a company’s history of increasing dividends (consecutive annual dividend increases) and a company’s five-year average dividend growth rate!

Actual Dividend Increases in August 2023

Before looking ahead to September, let's check in and see the August dividend increases from the five featured stocks in last month’s article . It was a mixed bag of dividend increases. Some are good, some are bad. Here are the results.

1. Altria Group ( MO ): 4.3% dividend increase
2. Nordson ( NDSN ): 4.62% dividend increase
3. Illinois Tool Works ( ITW ): 6.9% dividend increase
4. Dover Corporation ( DOV ): 1% dividend increase
5. Federal Realty Investment Trust ( FRT ): .9% dividend increase

As a bonus, Deere just announced an 8% dividend increase!

Expected Dividend Increases in September 2023

Now, let's look ahead to the coming month. As promised, we have some big time dividend stocks that are set to announce dividend increases this September! All dividend yields listed below are as of 8/30/23.

Dividend Stock #1: McDonald's ( MCD )

Let’s start this party off with the Golden Arches. McDonald's is one of our Top Five Foundation Dividend Stocks! One of America’s most famous fast food restaurants. McDonald’s has a very strong dividend growth history. Not only have they increased their dividend forever, they have also increased their dividend at a solid dividend growth rate! It always fascinates me that McDonald's stores are always packed with customers when I drive by. I wonder if this will translate to a strong dividend increase, especially since the company has increased its prices so dramatically over the last 12 months.

• Dividend Yield: 2.14%
• Consecutive Dividend Increases: 46+ Years
• 2022 Dividend Increase: 10.1%
• 5-Year Average Dividend Growth Rate: 8.39%
• Expected Timing of Dividend Announcement: End of Month

Dividend Stock #2: Starbucks ( SBUX )

Speaking of stocks that have customer lines out the door or drive thru lines wrapped around the building, we have Starbucks! Starbucks is continuing its journey towards becoming a Dividend Aristocrat. This next dividend increase will put the stock over the halfway mark. The company has a low yield, but a very strong dividend growth rate. Like McDonald's, I’m curious to see if the company announces another strong increase due to strong customer loyalty and increasing revenue from price increases.

• Dividend Yield: 2.14%
• Consecutive Dividend Increases: 12 Years
• 2022 Dividend Increase: 8.16%
• 5-Year Average Dividend Growth Rate: 10.97%
• Expected Timing of Dividend Announcement: End of Month

Dividend Stock #3: Lockheed Martin ( LMT )

Moving away from food, we head to the defense sector. Lockheed Martin (LMT) is one of the best in the industry. The company dominates a sector with high barriers to entry. After all, the government won’t just hand out contractors to new, unknown companies. They will want to hand out the lucrative, multi-billion dollar contracts to Lockheed and the other defense companies. The company’s stock price has recovered from its 2022 lows and is now trading well into the $400s. Like always, I’m expecting another strong $.20 per share increase in its quarterly dividend. After all, they’ve increased it by that amount the last 5 years!

• • Dividend Yield: 2.68%
  • Consecutive Dividend Increases: 20 Years
  • 2022 Dividend Increase: 7.27%
  • 5-Year Average Dividend Growth Rate: 8.58%
  • Expected Timing of Dividend Announcement: Middle of Month

Dividend Stock #4: Microsoft (MSFT)

Man, how many of us wish we had invested in Microsoft in 2022, right before the company invested in ChatGPT? Naturally, the stock price took off after! Still, we will see what kind of dividend increase Microsoft has in store for shareholders. I can’t think of any reason why the software giant will shift away from its 10% dividend increase strategy (of late). It would be a welcome surprise, but it is highly unlikely. Still, that would be a lot of fun, right?

• • Dividend Yield: 0.83%
  • Consecutive Dividend Increases: 18 Years
  • 2022 Dividend Increase: 9.68%
  • 5-Year Average Dividend Growth Rate: 10.12%
  • Expected Timing of Dividend Announcement: End of Month

Dividend Stock #5: Philip Morris ( PM )

Let’s move over to the tobacco sector now. Philip Morris is the lowest-yielding of the Big 3 (which also includes Altria Group and British American Tobacco). We are both big shareholders of PM on this website and are very much looking forward to this dividend increase announcement. Altria delivered a surprise 4% dividend increase. Well, it was at least a surprise to us, because we were expecting much less. How cool would that be if Philip Morris could deliver a surprise banger? I doubt it's likely. Therefore, I’m expecting a 3% dividend increase for PM.

• • Dividend Yield: 5.28%
  • Consecutive Dividend Increases: 14 Years
  • 2022 Dividend Increase: 1.60%
  • 5-Yr Average Dividend Growth Rate: 3.15%
  • Expected Timing of Dividend Announcement: Middle of Month

Dividend Stock #6: Texas Instruments ( TXN )

Texas Instruments is the latest stock that I’ve been buying. In a YouTube video, I shared that we want to increase our position to earn at least $100 in dividend income annually. Buying more shares is one way to increase our dividend income in the position. You know what another way is? Dividend Increases! Unfortunately, I’m not expecting a large increase. In fact, modest at best. The company just revised its earnings downward and is expecting a tough quarter. This is the time for management to be prudent, not aggressive, with dividend increases.

• • Dividend Yield: 2.91%
  • Consecutive Dividend Increases: 19 Years
  • 2022 Dividend Increase: 8.95%
  • 5-Year Average Dividend Growth Rate: 14.87%
  • Expected Timing of Dividend Announcement: Middle of Month

Dividend Stock #7: Verizon ( VZ )

The wireless and communications sector has taken an absolute beating in 2023. AT&T and Verizon have decreased significantly due to high debt burdens and the impact rising interest rates are having on their bottom lines and cash flow. With the current issues at hand, I doubt Verizon will announce a large dividend increase. In fact, I could easily see them increasing the dividend by 1% or less (if at all). Keep a close eye on this sector for the rest of 2023.

• • Dividend Yield: 7.52%
  • Consecutive Dividend Increases: 18 Years
  • 2022 Dividend Increase: 1.95%
  • 5-Year Average Dividend Growth Rate: 2.03%
  • Expected Timing of Dividend Announcement: Beginning of Month

Summary

I cannot wait for the month of September and to see the dividend increases announced. After all, I own six of the seven featured dividend increases (all but Microsoft). So this could be a game changer for my forward dividend income.

It sucks that I took a pessimistic tone with dividend increases this month. Unfortunately, that is the reality of 2023. Maybe this will be the month it turns around, and the featured dividend increases will blow us out of the water!

How many of the seven dividend increases are you going to receive? More or less than the six I’m expecting? What dividend increases did you receive in August?

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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