I have usually projected my dividend increases to be 10% per year, but I generally got more than 12% on average. However, I doubt I will see such high dividend increases in the future. I have lowered my projection of dividend growth to 8% per year, but I wonder if that is not too high also.
The latest high increases I got were in 2006 and 2007 when they were 24% and 23% per year. The low point for this latest recession was 5.3% in 2010. This is the lowest increase I have had. Last year was better at 9.2%, but I wonder if this year will be higher.
Currently, year to date my dividend increase is 8.5%, but we seem to be going back into a recession or at the very least a slow growth time. To date my 5 year median dividend increase growth is at 9.2%.
There seems to be a lot of stocks where the 5 year dividend increase is less than the 10 year dividend increase. This is because dividends increases are declining. In some cases, there have been no recent increases. Bank of Montreal (TSX-BMO) still has not raised their dividends. Insurance companies are in the same position. There has been no recent increase in Power Financial (TSX-PWF) or Sun Life (TSX-SLF) dividends. Manulife has decreased their dividend and have not yet raised it again.
Some stocks seem to be holding up well like SNC-Lavalin (TSX-SNC) which has 5 and 10 year dividend growth of 23% and 24% per year. However, there seems to be a lot more like Saputo (TSX-SAP) which has 5 and 10 year dividend growth rates of 13% and 34% per year, and Leon's Furniture Ltd (TSX-LNF) which has 5 and 10 year dividend growth rates of 7.6% and 13.7% per year.
And just to prove my point, in July 2012, no stock of my raised their dividends. I usually have at least one or two every month, at a minimum, raising their dividends.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
Sorry if this sounds kind of blond (no offense to you blonds out there, my best friend is one and that is her favourite comment when asking for an explanation) But are not dividend increases the same as getting a "pay raise"? Except you get to keep more of your money than if it was salary?
ReplyDeleteRob
Yes, Trader Rob, dividend increases are like pay raises and I expect mine to be lower in the future than they have been in the past.
ReplyDeleteSusan
Thanks, that's what I figured. Noticed elsewhere that Bell just increased thier dividend!
ReplyDeleteAlso do you have your portfolio listed anywhere?
ReplyDeleteMy index is at http://www.spbrunner.com/stocks/indexport.htm. Under column "O" of own is stocks I own.
ReplyDelete