Dividend Growth Investing at Work - Unexpected Raises are the Best!
Seriously, who doesn't love scrolling through news on the market and your portfolio to see that one of the companies you own decided to raise up their dividend payment? Even better is when you weren't expecting a raise from them at that time so it was completely unexpected. Even better than that is finding out it's a 10.5% increase.
On Friday the Board of Directors at Air Products & Chemicals (APD) did just that by raising the quarterly payout to $0.95 from $0.86. Assuming the dividend is maintained at this higher rate 2017 will mark 35 consecutive years of dividend growth for Air Products placing them firmly as a Dividend Champion. Shares currently yield 2.68%.
Since I own 18.481 shares of Air Products & Chemicals in my FI Portfolio this raise increased my forward 12-month dividends by $6.65. This is the 4th consecutive year of dividend increases that I've received from Air Products since initiating a position in 2013. Cumulatively my Air Products & Chemicals dividends have risen by 33.8% from dividend growth alone! According to USInflationCalculator the total rate of inflation over the same period is just 3.0%.
A larger version of the chart can be found here.
As I mentioned earlier Realty Income typically gives investors multiple raises throughout any given year. So looking at any one raise in particular could paint a much different picture than examining things over a longer time frame. I prefer to look at dividend growth rates across various time periods to encapsulate the various fluctuations and the multiple raises over time.
|Air Products & Chemicals (APD) Annual Dividend and Rolling Dividend Growth Rates|
An interactive graphical version of the previous chart can be found here.
My forward dividends increased by $6.65 with me doing nothing. That's right, absolutely nothing to contribute to their operations. Based on my portfolio's current yield of 2.91% this raise is like I invested an extra $228 in capital. Except that I didn't! One of the companies I own just decided to send more cash my way.
That's how you can eventually reach the crossover point where your dividends received exceed your expenses. That's DIVIDEND GROWTH INVESTING AT WORK! The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.
Thus far in 2017 I've received 3 dividend raises from the companies that I own increasing my forward dividends by $18.57.
My FI Portfolio's forward-12 month dividends increased to $5,575.57. Including my Loyal3 portfolio's forward dividends of $67.12 brings my total taxable accounts dividends to $5,642.69. My Roth IRA's forward 12-month dividends remain at $243.18.
Previous Raises This Month
Omega Healthcare Investors (OHI)
Realty Income Corporation (O)
Do you own shares of Air Products & Chemicals? Do you enjoy surprise dividend increases as much as I do?
Please share your thoughts below.