Micro Blog #15: My 2018 Early Dividend Growth Update

For a dividend investor, it is important to track dividend growth as well as when a company is expected to announce its dividend increase.

A slowing or frozen dividend growth rate could indicate a problem with company's business or an overall industry slowdown. An increasing dividend growth on the other hand, indicates improving business and cash flows.

I track both dividend growth and the actual/expected announcement dates for all my stocks and here is how I'm doing so far:

Mr. ATM's spreadsheet showing actual/projected dividend growth till June 2018

highlights companies that have already announced dividend increases, Yellow companies have at least one increase this year, but dividend is frozen for rest of the year. The red companies have completely frozen their dividend for the year and there have been no increases this year.

OHI and HCN are two companies in my portfolio that have recently frozen their dividends. Both are in the Healthcare REIT business and are facing industry wide headwinds. In Q1, OHI did increase its dividend by 1.5% and that's why I'm showing it as yellow and not red. Normally, OHI increases its dividend every quarter. I'll continue to hold these two companies as their yields are more than enough to compensate me, while I wait for the storm to pass.

On the positive side, there have been several double digit dividend growth announcements this early in the year:

 ABBV  35.2%,
 VLO  14.3%,
 CSCO  14%,
 INTC and D both 10%.

I know it's too early to celebrate, but given the tailwinds of corporate tax reform and the fact that economy is doing great and companies' earnings are growing, I expect 2018 to be a great year for dividend growth. Any corrections, like the one we just had, should be a buying opportunity in high quality dividend stocks. At least that's how I see it.

How is your dividend growth looking so far?


  1. Hi Mr. ATM. I agree. I think we are seeing the impact of corporate tax cuts trickle into higher than recent trend dividend increases. Hopefully that will continue. Nice spreadsheet. I have something similar that I use. Tom

    ps. sold all my GE today right when the market was at it's peak. wish I would have done it in early January, but I didn't. Have not yet decided where to deploy the cash, but I'm sure I can increase yield and dividend growth by spreading it among 2 or 3 of my existing stocks.

    1. Thanks Tom, yup, that spreadsheet is my lifeblood when it comes to tracking all my investments and knowing what to do next.

      Congrats on selling that toxic waste of a stock. You can move forward without having to constantly worry about it.

      You know there is a saying: "a dividend investor should never have to speculate about dividend income". GE has turned into a speculative stock, no more a dividend stock whose dividend we can count on.

      There are so many choices out there in some great dividend stocks. You can either build up your existing positions or shop for a new ones.

      Let me know what you are looking at, I can tweet you FastGraphs snapshots on stocks you are interested in. It does seem market is finally coming out of the correction, I think it's like 3/4 out already. Oh, and Monday stock market is closed (boring day for me) but gives you another day to think about what you want to buy.

      Oh, I'm so excited about what you are going to buy :)

  2. I'm also looking to make a buy next week for a long term hold. Just curious, what is a good level to get in on Abbvie would you say? Right where it is?

    1. Abbv just had a blockbuster ER and now raises its dividend by 35% which puts the yield over 3%.

      I think it is a godsend opportunity for people who missed its early rise and have been waiting for the yield to get above 3%.

      For me, now would be the right level to add some more regardless of what valuation says. I get to buy a star company that meets my objectives of building up my winners.

      If I were starting a position, l wouldn’t worry about valuations on a company like abbv if it meets my yield and DGR requirements.

      So look at your objectives and ask yourself whether abbv at current level meets your long term objectives.

  3. I expect twin effects from corporate tax break. Increase in dividends and stock appreciation due to buybacks. Every correction is definitely a buy opportunity. I missed out this month due to lack of capital.

    1. You are right dividendgreek, buybacks are increasing as well. Almost everyone of these companies that is announcing a big dividend raise is also announcing a buyback of some sort. I think this is great for both dividend and growth investors.

      Regarding missing out on the correction, well I had the opposite problem, I unloaded cash too fast and ran out of money pretty quickly in the correction, but still got a couple of good deals.

      You know as they say, it's hard to time a market, so stay on your long-term plan, keep buying high quality companies and keep increasing that cash flow regardless of what market does. And then if and when market throws in a another correction and you have some cash and know what to buy next, then don't freeze and put in some of that cash to good use :)

  4. Thanks for sharing, Mr. ATM! I really like the chart you created to track dividend income. I used to track more of the dividend growth rate and yield on cost but haven't paid as much attention to it recently. This is a really good reminder for me on the importance of tracking dividend growth. I had a few recent dividend increases towards the end of 2017 on ENB, T, and 3 of the financial institution equities I hold. The financial institutions typical increase twice per year so a few shows be coming soon. Hope you're doing well.

    1. Thanks for stopping by RTC, yup keep track of those dividend increases.


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