When you write about investing as much as I do, sometimes it takes a little divine intervention to come up with ideas. Sometimes, I’ll borrow an idea from another writer. Recently, I saw an article about dividend stocks that have already increased their quarterly payment early in 2019.
If you can’t beat ‘em, join ‘em.
Eric Volkman, the author in question, recommended PepsiCo (NASDAQ:PEP), Walmart (NYSE:WMT) and TJX (NYSE:TJX). All Dividend Aristocrats, I like the latter two. Pepsi not so much.
However, I do appreciate the inspiration.
Now, on to the task at hand.
I’m looking for seven dividend stocks that I’d want to own that have announced a dividend increase in the first 64 days of the year. While they don’t have to be in the S&P 500, nor do they have to be a Dividend Aristocrat, they should have a market cap higher than $2 billion.
To help with diversification, I’ll try to get one stock for seven different sectors. I can’t guarantee that will be the case, but I’ll give it my best shot.
So, without further ado, here are my seven dividend stocks to own now.
EPR Properties (EPR)
On Jan. 16, 2019, EPR Properties (NYSE:EPR) announced a 4.2% increase in its monthly cash dividend. Payable as of Feb. 15, the monthly dividend is now 37.5 cents or $4.50 on an annual basis. It is the company’s ninth consecutive year increasing its dividend.
In February 2018, I recommended the REIT that specializes in experiential real estate, to own in good times and bad. At the time, it was yielding 7.7%. As of Mar. 5, 2019, it’s yielding 6.1%. That’s because it has appreciated significantly over the past year.
I’ve been a fan of EPR stock for a long time. I first recommended it in 2013 when it was trading in the $50s.
In 2019, EPR expects to generate adjusted funds from operation (FFO) of at least $5.30 a share. With all the interesting experiential real estate it owns or is developing, I continue to believe it’s a REIT to hold for the next 20 years.
On Jan. 16, 2019, Fastenal (NASDAQ:FAST) announced a 3-cent increase in its quarterly dividend. Payable as of Feb. 27, the quarterly dividend is now 43 cents or $1.72 on an annual basis. As of Mar. 5, it yielded 2.8%.
The company first paid an annual dividend in 1991. It went to semi-annual dividends in 2003, and finally to quarterly dividends in 2011. It has also paid out special dividends in 2010 and 2012.
Fastenal is a wholesale distributor of industrial and construction supplies. Although I haven’t covered the company in recent years, its results from fiscal 2018 suggest it’s doing just fine.
In 2018, Fastenal grew revenues by 13% to $5 billion. On the bottom line, it increased earnings by 30% to $752 million. Both the company’s fastener and non-fastener products experienced healthy double-digit growth in 2018.
CEO Daniel Florness plans to double company sales to $10 billion. That ought to happen sometime in 2024. Perhaps earlier.
On Jan. 16, 2019, BlackRock (NYSE:BLK) announced a 5% increase in its quarterly dividend to $3.30. Payable as of Mar. 21, the quarterly dividend works out to $13.20 on an annual basis. As of Mar. 5, it yielded 3.0%.
BlackRock CEO Larry Fink has become almost as famous for his annual letter to CEOs as he has for building the owner of iShares ETFs into a global asset management powerhouse. Fink’s 2019 letter was another classic.
Here’s the part that stands out for me:
“Companies must embrace a greater responsibility to help workers navigate retirement, lending their expertise and capacity for innovation to solve this immense global challenge. In doing so, companies will create not just a more stable and engaged workforce, but also a more economically secure population in the places where they operate,” Fink stated in BlackRock’s 2019 Letter to CEOs.
He’s not shy to say what’s on his mind. Some people don’t like it. I do. I believe it’s what sets BlackRock apart from other asset management and financial services firms.
Stand up for the little guy, and the little guy will give it his or her all for management. It’s a contract Fink believes should still exist within companies.
I couldn’t agree more.
Penske Automotive (PAG)
On Jan. 30, 2019, Penske Automotive Group (NYSE:PAG) announced a 1-cent increase in its quarterly dividend to 38 cents. Payable as of Mar. 1, the quarterly dividend works out to $1.52 on an annual basis. As of Mar. 5, it yielded 3.4%.
A penny increase in the quarterly dividend might not seem like a lot, but it adds up. That’s especially true when you’ve increased the dividend for 31 consecutive quarters. That’s not a typo.
There aren’t many companies that are that consistent about their dividend. Of course, would you expect any less from Roger Penske, the King of motor racing?
It hasn’t been smooth motoring for PAG stock over the past 26 months with negative total returns of 5.3% and 12.8% in 2017 and 2018, respectively; it’s nice to see Penske stock is up almost 9% year-to-date.
I recommended PAG stock last August as one of seven dividend growth stocks to buy. Although it has gone slightly backward since then, I see its juicy 3.4% dividend yield as an excellent check to earn while you wait for its stock to revert to the mean.
Brookfield Infrastructure Partners (BIP)
On Feb. 6, 2019, Brookfield Infrastructure Partners (NYSE:BIP) announced a 6.9% increase in its quarterly dividend to 50 cents. Payable as of Mar. 29, the quarterly dividend works out to $2.01 on an annual basis. As of Mar. 5, it yielded 5%.
Google the word “infrastructure,” and you get 718 million results.
Without infrastructure investments, economies wither and die. President Trump ran on an impressive platform in 2016 to grow the nation’s infrastructure, but very little has been done. That’s because America is broke and infrastructure is a costly adventure. It’s not for the faint of heart, hence the 5% dividend yield.
In fiscal 2018, BIP saw funds from operations (FFO) increase by 5% to $1.23 billion. Leading the charge was its energy business, which saw FFO increase by almost 29% in the past year. A significant part of the increase was the result of the company’s investment in a Canadian midstream business as well as a North American residential energy infrastructure company.
Like its affiliated former parent, Brookfield Asset Management (NYSE:BAM), BIP’s goal is to acquire assets at a reasonable price, get them operating both efficiently and profitably, and then sell those assets when prices are high. Then take the proceeds and do it again. Rince and repeat.
Church & Dwight (CHD)
On Feb. 5, 2019, Church & Dwight (NYSE:CHD) announced a 4.6% increase in its quarterly dividend to 22.75 cents. Payable as of Mar. 1, the quarterly dividend works out to 91 cents on an annual basis. As of Mar. 5, it yielded 1.4%.
What the maker of Arm & Hammer baking soda fails to provide in terms of dividend yield, it more than makes up for it with lots of capital appreciation.
Year-to-date, CHD stock is up 0.54%. Off to a slow start in 2019, Church & Dwight stock is in danger of a losing year, the first in more than a decade. Over the past ten years, CHD’s delivered an annualized total return of 19.6%, 250 basis points higher than the S&P 500.
That is why I believe Church & Dwight is the best consumer staples stock for investors to own for the long haul.
Best Buy (BBY)
On Feb. 27, 2019, Best Buy (NYSE:BBY) announced an 11% increase in its quarterly dividend to 50 cents. Payable as of April 10, the quarterly dividend works out to $2 on an annual basis. As of Mar. 5, it yielded 3%.
With the 11% increase, Best Buy has now increased its annual dividend payment for six consecutive years. It has also paid a dividend for 61 straight quarters.
Best Buy’s past issues including its ongoing fight with Amazon (NASDAQ:AMZN) appear to be very much in the rear window.
In 2018, Best Buy grew same-store sales by 4.8%, overall revenues increased 1.7% to $42.9 billion, and earnings-per-share on a non-GAAP basis increased by 20.4% to $5.32 a share. In 2019, it expects to generate at least $5.45 a share in earnings on $42.9 billion in revenue.
It might not be massive growth, but considering its shares were trading around $12 in 2012, it has come a long way. When I wrote about Best Buy in August 2013, it had online sales that accounted for 6.1% of its overall revenue. Today, it’s 21.9% or almost four times as much.
It’s one of the best comeback stories of the 21st century.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.