TRN - 7 Upcoming Dividend Increases Including The 'Abbott's' And A Dividend King

2024-01-04 12:56:42 ET

Summary

• Seven stocks are expected to increase their dividends next week, including Hormel, Mastercard, Abbott Laboratories, and AbbVie.
• Abbott Laboratories is increasing by 7.8%, while AbbVie is growing by 4.7%.
• Dividend King Hormel extends its 57-year streak with a 2.9% increase.

Let me wish you a Happy New Year once more! We have a hot list of seven stocks increasing their dividends next week on tap. This week is bolstered by Dividend King Hormel (HRL), Mastercard (MA) and the "Abbott's," Abbott Laboratories (ABT), and AbbVie (ABBV), the drug company spinoff from Abbott in 2012. For the sake of the discussion, the streaks refer to each company's growing annual dividend. I know that Abbott's history goes back over 50 years, but the rules for inclusion on the "US Dividend Champions" list are slightly different than other S&P methodologies. Pound for pound, this is one of the strongest weeks of the year.

As a dividend-growth investor, I can't get enough of my dividends, especially increases. Not only that, but companies that consistently increase their payouts tend to perform significantly better than those that don't. Since I closely monitor these companies, I'm happy to share my insights on upcoming dividend increases. With these lists, you can confidently expect to see the top stocks expected to raise their dividends in the upcoming week. I use this analysis for my portfolio construction and for timely buys.

How I Created The Lists

The information presented here is a result of merging two sources of data - the "U.S. Dividend Champions" spreadsheet from this website and upcoming dividend data from NASDAQ. The process combines data on companies with a consistent dividend growth history with future dividend payments. It's important to understand that all companies included in this list have consistently grown in dividends for at least five years.

Companies must have higher total dividends paid each year to be included in this list. Hence, a company may not increase its dividend every calendar year, but the total annual dividend can still grow.

What Is The Ex-Dividend Date?

The ex-dividend date is when you must purchase shares to be eligible for the upcoming dividend or distribution. To qualify, you must have bought the shares by the end of the preceding business day. For instance, if the ex-dividend date is Tuesday, you must have acquired the shares by the market close on Monday. It's important to note that if the ex-dividend date is a Monday (or a Tuesday following a holiday on Monday), you must have bought the shares by the previous Friday.

Dividend Streak Categories

Here are the definitions of the streak categories, as I'll use them throughout the piece.

• King: 50+ years.
• Champion/Aristocrat: 25+ years.
• Contender: 10-24 years.
• Challenger: 5+ years.

The Dividend Increasers List

Data has been sorted by the ex-dividend day (ascending) and then by the streak (descending):

Field Definitions

Streak : Years of dividend growth history are sourced from the U.S. Dividend Champions spreadsheet.

Forward Yield : The new payout rate is divided by the current share price.

Ex-Dividend Date : This is the date you need to own the stock.

Increase Percent : The percent increase.

Streak Category : This is the company's overall dividend history classification.

Show Me The Money

Here's a table mapping the new rates versus the old rates. It also reiterates the percentage increase. This table is sorted similarly to the first (ex-dividend day ascending, dividend streak descending).

Additional Metrics

Some different metrics related to these companies include yearly pricing action and the P/E ratio. The table is sorted the same way as the table above.

Tickers By Yield And Growth Rates

I've arranged the table in descending order for investors to prioritize the current yield. As a bonus, the table also features some historical dividend growth rates. Moreover, I have incorporated the "Chowder Rule," which is the sum of the current yield and the five-year dividend growth rate.

Historical Returns

My investment strategy involves finding stocks combining increasing dividends and consistently outperforming the market. I use the Schwab U.S. Dividend Equity ETF ( SCHD ) as my dividend growth benchmark. This ETF has a remarkable track record of exceptional performance, a higher yield than the S&P 500, and a proven record of growing dividends. I prefer to invest in the ETF if a stock cannot beat the benchmark. I've added companies to my personal investment portfolio based on this analysis. I also routinely use this analysis to choose timely additional purchases.

I'm comparing everyone on the list versus SCHD. I've chosen the 10-year dividend growth rate as the comparator, as that is one of the key metrics to be included in SCHD. It's also a proxy for success, as it is hard to continually grow a dividend over long periods without the share price following. Here are the results.

SCHD returned a very respectable 188% as our reference point. Mastercard was the top performer, with a 436% total return. Not far behind is ABBV, coming in at 363%. I will mention there's a reason both of these companies are in my portfolios.

ABT and MAA also beat SCHD with respectable performances of 244% and 203%, respectively.

Finally, NWFL, HRL, and TRN brought up the rear.

Please do your due diligence before making any investment decision.

For further details see: