Another month is upon us as we cruise through 2023. Each month, we look ahead to the upcoming dividend increases. In this article, we will feature 5 expected dividend increases in August. The article will feature 4 Dividend Kings and 1 Dividend Aristocrat!
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 3rd 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 July 2023
Before looking ahead to August, let’s check in and see the July dividend increases from the 7 featured stocks in last month’s article. It was a mixed bag of dividend increases. Some good, some bad. Here are the results.
- Stanley Black & Decker (SWK): 1.2% increase
- Cummins (CMI): 7% increase
- Smuckers (SJM): 3.9% increase
- Hershey (HSY): 15.1% increase
- Walgreens (WBA): NO INCREASE
- Cintas (CTAS): 17.4% increase
- Mondelez (MDLZ): 10.4% increase
Expected Dividend Increases in August 2023
Looking ahead is the fun part, right? Let’s see which dividend stocks are expected to announce dividend increases in August. Dividend Yield’s in this article are as of July 28, 2023.
Dividend Stock #1: Altria Group (MO)
Altria Group continues to be one of the most controversial dividend stocks in the community. While some people love Altria, others avoid this stock like the plague. Whether it is due to personal beliefs about the company’s products (which is understandable) or due to skepticism about the current turnaround story after being burned in the past, people carry strong feelings when they choose to ignore Altria. With that being said, there is one thing you can’t ignore. The company’s dividend yield. Altria is yielding over 8%! The question is, can management announce a strong dividend increase after another tough year? I could see a dividend increase in line with 2022 in the range of 3% – 5%.
- Dividend Yield: 8.27%
- Consecutive Dividend Increases: 53 Years
- 2022 Dividend Increase: 4.4%
- 5-Yr Average Dividend Growth Rate: 6.69%
- Expected Timing of Dividend Announcement: End of Month
Dividend Stock #2: Nordson (NDSN)
Nordson is not a company that we cover frequently on this website. Nordson is a company that acquires and produces coatings, polymers, and other industrial products. The company has a low yield and a high dividend growth rate. However, in 2022, dividend growth slowed significantly when the company only announced a 4.4% dividend increase. Nordson is up 5% YTD; however, it is very tough to gauge the company’s dividend increase. Will they announce another low increase or will they return to historical averages? I’ll say the company is going to split the difference and announce a dividend increase between 8% – 10%.
- Dividend Yield: 1.04%
- Consecutive Dividend Increases: 42 Years
- 2022 Dividend Increase: 4.4%
- 5-Yr Average Dividend Growth Rate: 16.72%
- Expected Timing of Dividend Announcement: Middle of Month
Dividend Stock #3: Illinois Tool Works (ITW)
Illinois Tool Works is one of my favorite dividend stocks! The Dividend King was an additional to my portfolio YEARS AGO and has been on a tear ever since. I’m very excited about this upcoming dividend increase. Why? The stock is up 18% in 2023. 2022’s dividend increase was lower than the company’s average. Even in a down year, the stock still produced high single digit income. Therefore, I don’t see any reason why the company won’t announce a dividend increase between 7% – 10% in 2023.
- Dividend Yield: 2.02%
- Consecutive Dividend Increases: 59 Years
- 2022 Dividend Increase: 7.4%
- 5-Yr Average Dividend Growth Rate: 10.93%
- Expected Timing of Dividend Announcement: Beginning of Month
Dividend Stock #4: Dover Corporation (DOV)
For those keeping score, this is the third Dividend King featured in this article! Like Nordson, we don’t really cover Dover on this website frequently. However, unlike Nordson, Dover is considered a low dividend yield and low dividend growth stock. The company’s 2022 dividend increase was pathetic. Sadly though, it wasn’t that much lower than the company’s five year average dividend growth rate. I wouldn’t expected a surprise dividend increase in 2023. Rather, I’m expecting between 3% – 5% for the company.
- Dividend Yield: 1.39%
- Consecutive Dividend Increases: 66 Years
- 2022 Dividend Increase: 1%
- 5-Yr Average Dividend Growth Rate: 4.67%
- Expected Timing of Dividend Announcement: Beginning of Month
Dividend Stock #5: Federal Realty Investment Trust (FRT)
Lastly…ANOTHER DIVIDEND KING! This time, we are heading over to the REIT sector. Federal Realty Trust, like Realty Income, is known for an insane dividend increase streak. However, FRT’s dividend yield and dividend growth rate are both lower than Realty Income. That is why I have never considered this company for my portfolio, despite the dividend king status. I’m expecting another $.01 increase in the company’s quarterly dividend, just like the previous years.
- Dividend Yield: 4.28%
- Consecutive Dividend Increases: 55 Years
- 2022 Dividend Increase: .9%
- 5-Yr Average Dividend Growth Rate: 1.55%
- Expected Timing of Dividend Announcement: Beginning of Month
Summary
There we have it. 5 dividend increases that are expected in August. We have some high quality dividend stocks this month. 4 Dividend Kings and 1 almost Dividend King. It doesn’t get much better than that, right? Let’s hope there are a few surprises this month as well to make things a little more exciting!
How many dividend increases are you expecting this month? How many of the 5 companies do you own?
Original Post
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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