43 dividend increases expected before the end of 2021
The safest and most secure way to double our money on the stock market is to buy the fastest growing dividends.
It doesn’t matter whether the broad market is heading up, down, or sideways. Over time, stock prices eventually follow their dividends. Show me growth payment, and I will show you a stock price that has serious advantages.
Looking beyond current returns for future dividends is a simple but powerful concept. I know you already appreciate the actions that To pay. That’s why we get along so well.
We can also apply our favorite fundamental attribute – a company’s willingness and ability to put money in our pocket – to find the safest growth stocks on the market. Their shares can double in price while paying us a nice dividend.
We are not talking about crypto. Or “meme” actions. Just fundamentally sound payers, with real products and profits, which will make our portfolios worse as they increase their dividends.
Let’s look at an example. L3Harris Technologies (LHX) is a dividend stock that at first glance never seems to pay much.
On January 1, 2010, LHX paid 1.7%.
Fast forward 11.5 years to present and LHX is reporting… 1.7%.
This may seem trivial to “entry level” income investors. (More on them in a moment.) The lack of sizzle is their loss and our future gain.
While they slept downstairs, they missed the action in the payment penthouse. 364% dividend growth propelled by price growth of… wait… 361%.
We’re about to see a bunch of dividend increases – the kinds of increases that have taken LHX higher and higher. Which means now is the time to consider “rolling out” these dividend announcements.
Here is a list of 43 companies that are expected to increase their dividends in the fourth quarter. Let’s go over the most notable lots of them, including an individual review of a few companies that are increasing their payouts at a rapid rate.
Great health care
Featured Action: Zoetis (ZTS)
During the first years after Pfizer (PFE) first yarn Zoetis (ZTS), there weren’t many indications that the animal health pharmaceutical specialist was going to be a dividend growth driver. Until the end of 2015, investors were entitled to a single payout increase, from 7 cents to 8 cents per share.
Zoetis has become more aggressive since then. In total, ZTS increased its dividend to a 17% annual clip since 2013, including a huge 25% increase last year to its current 25 cents per quarter.
You might hear “animal health” and think this is a small niche market. Not so. Zoetis, the largest animal health company, achieved sales of $ 6.7 billion in 2020, a 6.6% revenue growth in a year in which many many businesses have failed. ZTS has been the beneficiary of a sudden swarm of pet adoptions amid the pandemic, but it’s not a surprisingly one-hit theme: the global animal health market (which includes animals from company and livestock) is expected to increase by around 9% per year until 2028.
ZTS is making hay (sorry but I have to say this) with products like the canine dermatitis drug Apoquel and the injectable cattle antibiotic Draxxin. He’s also racking up product gains recently, including an approval for Cerenia (injection to treat vomiting in cats) in China and a green light in Canada for Solensia (another injection, this one to treat feline osteoarthritis pain).
The outperformance in 2021 suggests that ZTS shareholders could get another big paycheck. Let’s keep our eyes peeled for mid-December, when Zoetis typically announces its annual dividend hike.
Real Estate Investment Trust (REIT)
Featured Stock: Innovative Industrial Properties (IIPR)
Those who don’t know space might be wrong Innovative Industrial Properties (IIPR) with a warehouse or logistics REIT, given the name. But the bland nickname veils a specialty in one of the most promising markets of all:
Innovative Industrial Properties is a pioneer in the field of marijuana real estate, with 54 properties in 18 states that are 100% leased to state-licensed medical marijuana growers. It operates primarily on a sale-leaseback model, where it purchases goods from the producer to provide an immediate inflow of capital, allowing them to reinvest it in their operations; they then rent the property to the IIRP.
How is the business going? Let’s take a quick look at how the company has evolved since its IPO in late 2016:
Adjusted operating funds
- 2017: $ 2.4 million
- 2018: $ 9.7 million
- 2019: $ 34.9 million
- 2020: $ 97.8 million
Since the IIRP is a real estate investment trust, it must return 90% or more of its profits as dividends. Which means this marijuana owner is continually increasing his earnings.
It is important to note that the IIPR is a quarterly dividend collector. Its latest increase was over 7%, to $ 1.50 per share. But year over year, it’s about 28% better thanks to a total of four dividend improvements since last September.
Following? Expect an announcement around mid-December.
Featured Stock: Roper Technologies
The dividend aristocrats have of them reputations. One is to be the most reliable of dividend payers – a fair title given that the minimum membership requirement is 25 full years of uninterrupted payment increases, and given that many boast of having much longer sequences.
But the other, less discussed reputation is that many aristocrats can be on the stingy side. After all, if you’ve been improving your dividend for such a long time, there’s a good chance you’re already paying the majority of your profits as dividends. This means that your ability to keep raising the stakes is closely tied to your ability to grow your income, and mature multinationals don’t really blow the doors to growth. It is therefore not uncommon to see certain Aristocrats regularly distributing 3%, 2%, or even 1% increase.
Roper Technologies (ROP) is doing much better.
Roper’s business will frankly put you to sleep. Its various business lines include application software such as laboratory information management solutions offering CliniSys; software and network systems such as the Canadian transport platform Loadlink Technologies; measurement and analysis solutions such as process weighing and packaging equipment manufacturer Hardy; and process technology providers such as engineered pump maker Cornell.
But boring is beautiful. All of these companies make the world go round, and Roper’s diverse assortment means that even when some of its lines are struggling, others are likely to take over. Unsurprisingly, revenues have been growing steadily for years and looks set to see a further improvement in 2021.
Investors have reaped the rewards in more ways than one. In addition to around 50 points outperforming the market over the past five years, ROP stocks have also inflated liquidity. The dividend has grown by more than 13% per year during this period, including an increase of around 10% last year for Roper’s 39th consecutive annual dividend increase.
Given how regular these increases are, Roper’s next hike – which is expected to be announced in mid-November – could sniff at double digits once again.
Featured Stock: Artisan Partners Asset Management (APAM)
Artisan Partners Asset Management (APAM) is a global, albeit mid-range asset management firm with approximately $ 175 billion under management and a market capitalization of $ 4 billion. And its mutual fund offerings currently total rare 20 here in the US, making it a relative minnow compared to Vanguard and Fidelity.
That said, despite all the talk about the decline of mutual funds, APAM is a delightful growth story. Assets under management have increased by approximately 15% since 2009. Revenues improved by approximately 25% between 2016 and 2020, while net income increased by 191% during this period. 2021 has also been extremely beneficial for Artisan Partners: management fees for its Artisan funds and global Artisan funds increased 52% year-over-year in the first six months of the year.
And APAM has rewarded investors in two ways.
On the one hand, he has increased his regular payout by over 13% per year on a compound basis since 2017. He also supplements these payouts with a special dividend every year. The 2021 payout, for example, takes APAM’s yield from around 7% to 7.8%.
It should be noted that Artisan Partners’ commitment to dividend growth is a relatively recent thing, and it is not very consistent. The payout was stuck at 60 cents per quarter from 2015 to 2020, with a few slightly lower dividends in between. Even recently, its latest dividends were 83 cents, 97 cents, 88 cents and $ 1.00 most recently, although the latter is almost 50% better than the previous year.
A long way of saying: APAM may not increase its dividend at the end of October… but it could, and it could a lot, if the story is to be believed. At the very least, this stock is worth watching on a quarterly basis, as its dividend arrow is broadly pointing in the right direction.
Brett Owens is Chief Investment Strategist for Contrary perspectives. For more great income ideas, get your free copy of his latest special report: Your early retirement portfolio: 7% dividends every month forever.