Dividend Increase: KMB, CSCO, RAI, ATVI, INTC, TWX

It’s been one month since my last day sitting in a cubicle.  It’s been a great month despite the market turmoil.  There will be a post coming soon about my withdrawal strategy in retirement, but so far I have not had a need to touch any investments to live off, still living off bonus money and cash that I was building up prior to retirement.  So, I am actually still reinvesting all dividends via DRIP back into the companies purchasing additional fractional shares and building up my future dividend income in the process.  Pretty sweet.  Still investing, even though I’m not working.

Onto dividend news for the week.

Kimberly Clark (KMB) announced a 4.5% increase to their dividend, bringing the new quarterly amount to $0.92 per share, up from the previous $0.88.  This marks the 44th straight year of increasing the dividend and 82nd straight year of paying dividends.  Needless to say, KMB is in elite territory. As long as the human body emits waste from an orifice, KMB will have a product to clean it.  Here is their dividend history going back to 1972.  The increase is pretty much in line with expectations.  I’m happy with a slow burn on their dividend growing around 5%.  It’s a pretty matured market for their products and the most recent break through product would be the introduction of butt wipes to the western world.  Still, incontinence issues in China prove to be a boon.  Like every other company in consumer staples, the strong dollar has hurt earnings.   When the dollar strength reverses course compared to other currencies, I’m expecting a weakened dollar to give a nice earnings boost to all these companies.  Payout ratio is in the neighborhood of 60%, so I expect continued dividend growth going forward at roughly the same pace.  Current Yield at 2.78%

Cisco Systems (CSCO) announce a huge 24% increase to their quarterly dividend.  The world we live in these days, one of many tech companies with a solid dividend yield (CSCO at 3.4%).  The new quarterly dividend will be $0.26 per share from a previous $0.21.  This increase handily beat my expectation of $0.23.  I pretty much expect about a 10% increase in the dividend from CSCO.  The dividend history for CSCO is short, but they have been increase each year since 2011’s initial payment.  Payout is at about 46% based on high estimates.  I’m looking for a 10% boost in the dividend income next year as well.

Reynolds American (RAI), better know as the former RJ Reynolds also announced a huge increase of 17% to their dividend.  I was only expecting close to 8%.  The new dividend will be $0.42 per share from a previous$0.36.  Pretty sure the buyout of Lorillard Tobacco had improved some efficiency, but also menthol sales continue to grow.  RAI has been increasing their dividend since going public back in 2004.  Not much to say about a tobacco company, but I love it for its predictability.  Boring is beautiful.  I’m only expecting a $0.03-0.04 bump for next year.

Activision Blizzard (ATVI) is a video game publisher, think Call of Duty.  Their annual dividend was boosted by 13% from $0.23 annually to $0.26 annually per share (payable in May).  Beat my expected increase by $0.01.  Unfortunately this news was drowned out by the earnings and revenue miss for the quarter, stock got beat up today.  No worries, they’ll bounce back.  Payout ratio is at 19%, so the dividend is safe and I’m looking for a 2-3 cent increase in 2017.

Intel Corp (INTC) I’m slipping in my old age.  I missed this one.  Intel bumped up their dividend by 8% to $0.26 from $0.24 per quarter.  They had a few years of not increasing their dividend after previously having a little streak going for a tech company.  Nothing exciting here.  INTC missed it’s chance years ago to buy Nvidia with their pocket change.  This would have been taking a page from rival AMDs book when they purchased ATI Technologies.  An Intel/Nvidia merger years ago would have been magic for Intel as QCOM and NVDA chips have become 2 of the major players in mobile chips and INTC is still playing catch up.  Also NVDA’s GPU chips have continued to grow at a faster pace the INTC CPU chips.  Man I miss the old tech days of INTC, AMD, ATYT, and NVDA.  Intel’s dividend history.  I expect more or less the same next year $0.02 boost next year and I’m happy.

Time Warner Inc (TWX) announced a 15% boost to their dividend to $0.4025 from $0.35 per quarter.  Nothing exciting here.  Who doesn’t like DC comic movies.  They’ve been increasing their dividend since 2010 and have a dividend history going way further back. I was only expecting about a $0.03 boost and basically the same for next year.

For those keeping score at home the tally sheet shows 14 of my holdings so far this year increasing their dividend payments and 1 with a dividend cut.  So far, it looks like I’m on pace to exceed my retirement years goal of increasing my dividend income by 5%.  Won’t even have to lift a finger for this to take place.  I am in the middle of completing a rollover on my retirement plan and will be investing that in individual stocks.  After that is all settled, it will be interesting to figure out my new total dividend income coming in.  Stay tuned.

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Readers Comments (21)

  1. I have been thinking of buying Activision stocks since they used to take my money monthly in WoW subscriptions…I probably should have back then to offset my subscription…

    • I had some friends introduce me to COD4 way back in the day. That was my reasoning for buying the stock, I thought there was huge potential in that franchise. The stock has been a 5 bagger for me since. Also bought TTWO years ago when the stock tanked to $7 after they rejected an EA takeover bid. I remember their market cap at some point was well under $1B and thought GTA alone is worth that. Not to long ago ZNGA had a larger market cap than TTWO, which blew my mind. They aren’t even in the same league in my book.

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