I used to play the Monopoly board game as a kid. And I remember sometimes drawing the Chance card that said “bank pays you a dividend of $50”.
In fact, I have a framed version of that Chance card right next to me on my desk. So even as a kid, I had a dream of living off of dividends.
I imagined walking out to my mailbox a few times per month to pick up my dividend checks. Well, it’s a lot better than that in reality.
First, my dividends are digitally deposited automatically into my brokerage account. I don’t even need to walk to a mailbox. Second, these dividends are routinely increasing.
That’s because I invest in high-quality dividend growth stocks. What could be better than totally passive dividend income?
Totally passive dividend income that’s increasing all by itself. And that’s what this article is all about.
Today, I want to tell you about three dividend growth stocks that just increased their dividends. Ready?
Let’s dig in.
Dividend Increase Stock #1: American Tower (AMT)
American Tower just increased their dividend by 2.4%.
I know. You might be asking yourself, what’s so exciting about a 2.4% dividend increase? Well, American Tower tends to increase its dividend every quarter. That’s right. Quarterly dividend increases. Gotta love it. And these quarterly increases add up – the stock’s five-year dividend growth rate is 19.1%.
This is the 11th consecutive year of dividend increases for the cell tower company.
American Tower is a fantastic infrastructure business. And as the 5G rollout continues, this company’s infrastructure will only become more critical and necessary. This sets them up for a long growth runway, which naturally should bleed down into many, many more dividend increases to come. Meanwhile, the stock yields a healthy 1.9%.
The stock is up almost 20% YTD, but I don’t think the valuation is obscene.
No, it’s not the cheapest stock out there. But you get what you pay for. This isn’t cheap junk. It’s a phenomenal business. Most basic valuation metrics are elevated relative to their respective recent historical norms. Notably, however, the yield is right in line with its own five-year average. A dip would be great. But if you don’t already own this name, you might want to put it on your radar.
Dividend Increase Stock #2: Clorox (CLX)
Clorox just increased their dividend by 4.5%.
Not the biggest dividend increase in the world. But it does beat inflation. And this increase is yet another in a very long line of dividend increases.
The consumer products company has now increased its dividend for 44 consecutive years.
How’s that for reliability? Your bills are very reliable. And you want your passive dividend income to be just as reliable, if not more so. Clorox is one of those steady-eddy stocks that can be a ballast in a portfolio that steadily chugs along, no matter what’s going on in the world. That’s because the company’s product lineup – from trash bags to disinfectants – are part of everyday life. And they have some of the most trusted and well-known brands out there, including Clorox and Glad.
Unlike many other dividend growth stocks, this one is actually down on the year.
The stock saw a massive pandemic-induced spike, as people rushed out to stock up on cleaning supplies. The stock has come back down, though, and is down more than 11% YTD. Many of its basic valuation metrics are in line with, or even slightly below, their respective recent historical averages. The stock now yields 2.6%, which is 20 basis points above the stock’s own five-year average. Could be a good time once again to stock up on this name.
Dividend Increase Stock #3: LyondellBasell Industries (LYB)
They just increased their dividend by 7.6%.
This is a pretty strong dividend increase, especially considering that the stock yields 4% right now. The stock gives you a compelling combination of yield and growth. It’s a nice balance between the two.
This marks the 11th consecutive year of dividend increases for the chemicals company.
The stock has been on a tear over the last year, up by about 50%. And it hasn’t slowed down into 2021, either. It’s up 23% YTD. But this was one of those stocks that got so beaten up during the pandemic crash last spring, it’s basically just rebounded back to where it probably should be.
Even after that huge run, it doesn’t look outrageously valued.
It’s only slightly above where it was in late 2019. And we’re almost two years on from that point. The stock’s five-year average yield is 4.2%, so there’s not a huge delta there. I wouldn’t say it’s undervalued, but it is a higher-yielding chemicals stock to consider, especially if it were to dip back down to the $100/share level.
— Jason Fieber
P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.
Source: DividendsAndIncome.com
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