Investing is dividend growth companies is a great way to build a passive income portfolio. The term often used is “the snowball effect” they payouts start small but over time they grow exponentially. With patience, discipline and routine contributions you to can enjoy the compounding effect of dividends.
As companies mature and become profitable they can reinvest those profits back into the company for acquisitions, developing new products, expansion or pay it’s shareholders a portion. If they can successfully grow the business then each year the amount given back to shareholders increases. Now that’s not to say a dividend payment will last forever, if a company hits a rough patch it does not make fiscal sense to payout money you do not have and ANY company can suspend or cut it’s dividend.
Of the 500 companies that comprise the S&P over 400 pay a dividend.
Here are some recent dividend increases.
Dividend Increases
| Name | Ticker | Old | New | Increase | Yield | 5 Year CAGR | 10 Year CAGR | Years of Increase |
| Simon Property Group | SPG | 1.70 | 1.75 | 2.94% | 6.47% | 3.50% | 9.41% | 1 |
| Federal Realty Trust | FRT | 1.07 | 1.08 | 0.93% | 4.15% | 1.77% | 4.48% | 28 |
| Dover | DOV | .5 | .505 | 1.00% | 1.52% | 7.08% | 9.01% | 65 |
| Illinois Tool Works | ITW | 1.22 | 1.91 | 7.38% | 2.50% | 13.42% | 12.98% | 58 |
August 1, 2022
Simon Property Group ( SPG ) is a REIT that centers around shopping malls and outlet centers with a quarterly payout. This is their second increase for 2022, they started the year at $1.65 so a nice 6% increase YTD. They cut their dividend during the Covid pandemic in 2020, but have quickly rapidly turned it around and are just about where they were pre pandemic.
August 4, 2022
Federal Realty Trust ( FRT ) yet another REIT that invests in shopping centers albeit a smaller portfolio compared to SPG. They increased from $1.07 to $1.08 for a paltry 0.93%. They do have a 28 year streak of dividend increases, but as you can see from the 10 year CAGR it hasn’t been growing much.
August 4, 2022
Dover ( DOV ) Dover provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. They supply different industries with their vast portfolio of products. They have a 66 year streak of dividend increase making them a Dividend Aristocrat, this last one isn’t much to get excited about but over the past 10 years it has grown at a 9% clip. That along with a 25% payout ratio, the dividend will continue to grow.
August 8, 2022
Illinois Tool Works ( ITW ) manufactures and sells industrial products and equipment to several different industries including automotive, food and construction. Here is a quick glance at their product portfolio. Yet another Dividend Aristocrat with 58 years of increases and a steady double digit CAGR over the last 10 years makes this a compounding machine. If they continue with the double digit increases your YOC (Yield on Cost) would double in 7 years.
Disclaimer * I do not hold any of these positions and this is for information purposes only. Do you own any of these companies? leave us a comment below.