2 Stocks That Could Raise Dividends In November
We’re entering the final stretch of 2021. Earnings season is underway, and I’m particularly interested to see how many times the words “supply chain” and “inflation” make an appearance in transcripts of earnings calls.
In the meantime, as I mentioned recently, we’re also entering into the time of year when companies typically announce dividend raises.
While there are many ways to fight back against inflation, I can think of few better methods than a pay raise.
Each month, over at my High-Yield Investing premium newsletter, I make a point to screen for stocks that are likely put more cash in your pocket. It’s part of my job. Ideally, I’m looking for hikes that could happen over the next four to six weeks. I also highlight noteworthy special distributions on the horizon.
We don’t do this just for fun. In a perfect scenario, we find great ideas for consideration in our premium portfolio… Companies posting outsized double-digit increases, and reliable dividend-payers that have been steadily growing payouts for a decade or more. I flag these stocks first for my premium readers so that they can research them and get a head start. Then, I share them with the public.
This month, I have two stocks I’d like to highlight. If you’re looking for a potential addition to your income portfolio, I can’t think of a better place to start. Here’s what I’ve found this month…
2 Upcoming Dividend Hikes
1. McCormick (NYSE: MKC) — Want to spice up your portfolio? Try this packaged foods vendor, whose products are found in millions of kitchen pantries in over 160 countries worldwide.
This is the corporate parent behind popular brands such as Lawry’s, French’s, Old Bay, and Zatarain’s. The product portfolio spans everything from barbecue sauces and marinades to cornbread mix. But the company is best known for its full line of spices, which receive prominent placement on just about every supermarket shelf nationwide.
Add it all up, and the company rakes in more than $5 billion in annual sales. Regardless of economic cycles or interest rates, demand for food tends to be steady. That explains why MKC has been able to raise dividends for 35 straight years — an impressive streak that dates back to 1987. That track record was unscathed by Covid, with the company announcing a healthy 10% bump last November.
McCormick is capitalizing on the trend of increased at-home meal preparation, which has outlasted the Covid lockdowns and appears to be a permanent shift. Management is eying a solid 12% to 13% increase in sales this year. Like many, it’s dealing with inflationary pressures and supply chain issues, which have taken a bite out of gross margins. But these trusted brands have pricing power, and the company expects to fully pass the increased costs on to consumers (a common scenario).
On a year-to-date basis, earnings are running about 20% ahead of last year’s pace. With a conservative payout ratio, I expect this Dividend Aristocrat to treat shareholders to another hike by the end of November.
2. Mid-America Apartment Communities (NYSE: MAA) — Mid-America is the nation’s largest apartment owner, with a portfolio of 300+ complexes containing more than 100,000 units. Most are located in desirable markets from Florida to the Mid-Atlantic region. Particular emphasis is placed on cities with strong population growth and job creation such as Orlando, Nashville, and Washington, DC.
Mid-America has enjoyed steady occupancy, rising rental rates, and an expanding portfolio. This has given the company the financial fortitude to dish out well over 100 consecutive quarterly dividend payments over the past quarter-century.
Over that time frame, distributions have more than tripled.
Back in 2019, I predicted an increase in the quarterly payout from $0.96 to $1.00 per share. And the company delivered — to the penny. Last year, it tacked on another $0.10 to the annual distribution, despite the challenges of collecting rent during a pandemic.
While Mid-America wasn’t immune to the issues plaguing many property owners, it has since made a full recovery. Citing robust occupancy and rent growth, the company outperformed Wall Street targets last quarter. It also just received a credit rating upgrade, and the development pipeline has expanded to accommodate strong leasing demand.
In turn, management has just raised its 2022 outlook and is now forecasting adjusted funds from operations (AFFO) of $6.07 per share next year. That should pave the way for another dividend hike in the near future.
Action To Take
We’ve had a pretty good run of finding solid ideas from this exercise, so it pays to follow along each month. Some of them end up paying off big time. So if you’re looking for a potential addition to your income portfolio, then I can’t think of a better place to start your research…
But remember, just because I highlight stocks that are likely to increase dividends doesn’t necessarily make them “buys.” These are merely ideas to get you started in the hunt for high yields.
With that said, the two candidates mentioned above each have a solid long-term track record of rewarding shareholders. But if you want to know about my absolute favorite high-yield picks, you need to check out my latest report…
In it, you’ll find 5 “Bulletproof Buys” that have weathered every dip and crash over the last 20 years and STILL handed out massive gains. And each one of them carry high yields, with dividends that rise each and every year. Go here to check it out now.