The four stocks detailed here have long histories of hiking their dividend each year, and are rock solid additions to every income investing portfolio. As a company that raises distributions each year pays many more benefits than just the extra cash in your pocket.
One of the best events for income investors to enjoy is when a company declares a new, higher dividend rate. A dividend increase provides several positive reactions besides just a larger cash deposit into your brokerage account.
- A dividend increase announcement can produce a nice share price increase. If you buy into a stock before a new, higher dividend rate is announced you can often end up with a quick and tidy gain compared to your entry price.
- Dividend increases are the surest sign that a company’s dividend is safe. Quality dividend paying companies will not declare a higher dividend rate unless they are very certain that the company will generate enough cash flow over the next year.
- A multi-year stretch of regular dividend increases will result in a yield on investment much higher than your initial yield rate and generate an income cash flow that can be used for reinvestment or as a source of personal income.
Many real estate investment trusts – REITs – have histories of steady annual dividend growth. Also, although a dividend increase can be announced any time during the year, quite a few REITs will increase their dividend rate with or near the fourth quarter earnings announcements which happen in January through March each year.
Listed below are four REITs that should announce dividend increases during the next month. Before I provide that list, consider the example of healthcare REIT Ventas, Inc. (NYSE: VTR), a core holding in The Dividend Hunter portfolio which has a history of an average annual 9% increase in its dividend, and the new rate announced every December. The VTR share price started climbing soon after the third quarter dividend was paid at the end of September. Investors who knew the dividend hike was coming were able to pick up a 20% share price gain over the last 2 1/2 months.
