We are back with another exciting article featuring everyone’s favorite topic…dividend increases! Each month, we look ahead to forecast which dividend stocks are expected to announce dividend increases. September will be an exciting month, as there are many great dividend growth stocks set to increase YOUR passive income (if you own them). Here are the expected dividend increases in September 2021!

Why Dividend Increases Matter

Dividends are the foundation of our goal to reach financial freedom. We continuously invest in dividend growth stocks to grow our passive income. If you haven’t figured it out by now, we eat, sleep, and breathe dividends!

Read: 5 Reasons WHY Dividend Investing is the EASIEST Form of Passive Income

If the goal is to produce a passive income stream that will one day cover our expenses, making sure that income stream GROWS is critical. Without growth, your dividend income stream will lose purchasing power to inflation. Inflation is typically between 2%-3% annually; although, it has been higher the last few months (4.2% in April and over 3% in May). Therefore, if you cannot achieve average dividend growth of at least that percentage, your income stream will be able to cover less, and less, over time.

That is why dividend growth is a major deciding factor in all of our stock purchase decisions. It is the 3rd metric of our Dividend Stock Screener for a reason. For each stock, we review a company’s history of increasing dividends (consecurtive annual dividend increases) and a company’s five-year average dividend growth rate!

We cover dividend news extensively on our Youtube Channel. Each week, we discuss the major dividend increases from the week before. Heck, each month, we even bring this article to life and cover the major expected dividend increases of the coming month.

Actual Dividend Increases in August 2021

Interestingly, the month of August was supposed to be relatively quiet from a dividend investing standpoint. Last month, we wrote about how 3 companies were expected to announce dividend increases. The three companies delivered, as expected:

• Altria (MO) – 4.7% dividend increase (beats last year)
• Illnois Tool Works (ITW) – 7% dividend increase (in line with last year)
• Dover Corporation (DOV) – 1% dividend increae (in line with last year)

For the companies that we expected increases from, it was interesting that two of the giants maintained the same dividend growth compared to last year. With how the stock market has boomed, I would have expected the company to juice up their dividend a little.

Now, for Altria, I was pumped up with their nearly 5% dividend increase. The company doubled the dividend increase compared to last year. Plus, with their 7%+ dividend yield, it was a fantastic treat to see how Altria rewarded their shareholders. Maybe the company is turning the corner and getting beyond the Juul issues that have plagued the company over the last few years.

The best dividend increases for the month though, were from companies that were not featured in our article. John Deere (DE) annoucned a 17% dividend increase at the end of the month. Dick Sporting Goods (DKS) announced a double digit dividend increase…and a $5.50 special dividend. On top of it, companies like Wendy’s (WEN), WIlliams Sonoma (WSM), and others CRUSHED it from a dividend perspective. It turned a boring month of August into an exciting one!

Expected Dividend Increases in September 2021

Let’s move into September now. August ended with a bang, thanks to Deere and others of course. We are pumped up to share the September results. Why? There are some heavyweight dividend stocks up there. Buck up. Get ready. Let’s jump in and read about the expected dividend increases in September 2021.

Dividend Stock #1: Lockheed Martin (LMT) – The aerospace giant continues to stay on our radar. Not just because they are expected to increase their dividend this month. Rather, they are continuing to show signs of undervaluation. Lockheed Martin has a strong dividend yield, perfect payout ratio, and fantastic dividend growth rate. Their 5 year average dividend growth rate is 9.52%, which is fantastic. With a massive defense budget, the company’s revenue, earnings, and dividend should continue to grow for a long, long time. If you want to see why we like them so much, watch one of our latest YouTuube videos on the stock!

Last year’s dividend increase –  8.3%

Five-year average DGR –  9.52%

Expected timing of Dividend Increase Announcement –  End of the month

Dividend Stock #2: McDonalds (MCD) – McDonalds is one of our Top 5 Foundation dividend stocks for a reason. The fast food chain has taken it up another notch once again, as they continue to dominate the fast food wars. The company has transformed its menu offerings, along with its ordering experience, introducing new, innovative ways to order your fast food. Typically, McDonalds dividend increase is in September. However, much to our chagrin, 2020’s increase was in October. My expectation is that McDonalds returns to their annual September dividend increase. See you at the end of September McDonalds.

Last year’s dividend increase –  3.2%

Five-year average DGR –  7.71%

Expected timing of Dividend Increase Announcement –  Middle of the month

Dividend Stock #3: Microsoft (MSFT) – The software giant should announce another consistent, high single digit dividend increase in September. Microsoft is a cash cow that benefited mightly from the pandemic. Their stock price reflected this and their market cap continues to soar. Despite the Salesforce acquisition of Slack, which will allow Salesforce to better compete with the Microsoft suite, Microsoft has a wide moat with corporate america and its use of all Microsoft products. It will be exciting to see this dividend increase.

Last year’s dividend increase –  9.8%

Five-year average DGR –  9.24%

Expected timing of Dividend Increase Announcement –  Middle of the month

Dividend Stock #4: Phillip Morris (PM) – Altria ended the month wit ha ~4% dividend increase. Now, lets see how their arch-rival responds. After their split, Phillip Morris sells products internationally while Altria Group sells products internationally. Both companies, even though they have historically relied on tobacco products, are aggressively pursuing alternative products to bolster revenue long into the future. Revenue and dividend growth have been slow lately, and I don’t expect that to change in 2021 for PM.

Last year’s dividend increase –  2.56%

Five-year average DGR –  3.31%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Don’t Miss: Our Dividend Stock Portfolios – We both own PM! 

Dividend Stock #5: Starbucks (SBUX)  Love this coffee chain. Everytime you drive by a Starbucks, it is packed. Whether you are passing by and looking at the drive thru or looking at the Starbucks counter in Target. People love their coffee and specialized drinks for the iconic coffee chain. The company continues to pursue strong international growth as well! Their dividend growth has been on a tear over the last five years, which is further evidence that the company is ON FIRE!

Last year’s dividend increase –  9.75%

Five-year average DGR –  17.79%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Dividend Stock #6: General Mills (GIS)  The consumer staple, breakfast champion FINALLY returned to dividend growth in 2020. GIS completed a pet food acquisition several years ago, leveraging debt to do so. As a result, the balance sheet needed to be cleaned up and de-levered, resulting in the company maintaining (and not increasing) its annual dividend. Now, that dividend growth resumed last year, we are expecting low dividend growth on an annual basis.

Last year’s dividend increase –  4.1%

Five-year average DGR –  2.34%

Expected timing of Dividend Increase Announcement –  Beginning of the month

Summary

There we have it. 6 big time dividend stocks that are set to announce dividend increases. From the group, I am most excited about McDonalds and Starbucks. To me, both of these companies are true wild cards and could potentially announce larger than expected dividend increases. If there are any dividend increaess that you are expecting that were not included in this article, please let me know too. I know there will be others that I was not able to include!

How many dividend increases did you receive in August? What was your largest increase? Which company are you looking the most forward to in September?

Bert