As a dividend growth investor, one of the primary objectives I seek is passive dividend income from my investments that increases over the rate of inflation, annually. It’s always wonderful news when companies decide to reward loyal, long-term shareholders with a dividend raise. A dividend raise typically means operations are doing well, and management is confident enough about cash flow to give shareholders a raise. All in all, it’s a very good sign.
In addition, dividend raises from companies I own a stake in means my personal dividend income is increasing, thereby speeding the effects of compounding since I’ll be able to reinvest larger dividend payouts back into dividend growth stocks that are also regularly paying and raising dividends. It’s a truly wonderful cycle. And it just brings me that much closer to financial independence.
I try to keep my eyes peeled for dividend raises from companies I’m invested in, as well as companies on my watch list. Some recent dividend increases include:
Phillips 66 (PSX) has been on an absolute tear since being spun off from ConocoPhillips (COP) in April 2012. They’ve raised their dividend four times since then, and most recently raised their dividend by a whopping 28.2%. The new quarterly payout of $0.50 per share is a nice boost over the old dividend of $0.39. This refiner has been a dividend growth investor’s dream, and I’m a very happy shareholder here. The yield on shares after accounting for the new dividend is 2.39%.
Baxter International Inc. (BAX) recently boosted their quarterly dividend by 6.1%, upping it by $0.03 from $0.49 per share to $0.52. The yield now stands at 2.76%. I’m a huge fan of this healthcare company, and they’ve now managed to raise their dividend for eight consecutive years. Although shares aren’t overly cheap here, I’m happy to continue holding a position in the company. They plan on spinning off their biotech business in 2015, and I plan on remaining a shareholder in both companies post spin-off.
The Clorox Co. (CLX) just gave shareholders a 4.2% raise, increasing the quarterly per share dividend by $0.03 from $0.71 to $0.74. Overall, this was a disappointing increase, but not completely surprising considering some of the headwinds they’ve faced, specifically relating to currency issues. I initiated a position in the company just before the dividend raise, hoping it would be a little larger. However, I’m still a happy shareholder considering this consumer goods company has managed to raise its quarterly dividend for the past 37 years. The yield on shares is now 3.32%, which is attractive in this market.
Southside Bancshares, Inc. (SBSI) recently announced a 5% dividend increase, raising the quarterly dividend from $0.20 to $0.21 per share. This is now the 20th consecutive year in which the company has raised the dividend. Pretty impressive stuff from a small bank out of Texas. In addition, they traditionally pay a special dividend in December, and also reward shareholders with annual stock dividends. Overall, I’ve been a very pleased shareholder with this bank. And the yield of 3.22% looks pretty good here.
Full Disclosure: Long PSX, COP, BAX, CLX, and SBSI.
Are you a shareholder in any of these businesses? Pleased with these raises?
Thanks for reading.