When I first started investing in 2010, the financial crisis and ensuing Great Recession was a fresh memory.
This was the worst financial cataclysm the US had experienced since the Great Depression. And many of us saw it as the yardstick for measuring business durability. The line of thought was this: If a company could make it through the Great Recession without major harm, it could probably make it through anything.
Well, how wrong we were.
A once-in-a-century global pandemic has tortured humanity over the course of 2020, testing modern society in ways we’ve never seen before.
The COVID-19 pandemic has made the financial crisis look like child’s play in some respects.
And we now have a new yardstick.
The COVID-19 pandemic has become the ultimate litmus test for business durability and dividend resiliency.
I’ve been advocating for and personally using the strategy of dividend growth investing for a decade.
It’s worked out tremendously well.
My real-money dividend growth stock portfolio produces enough passive dividend income for me to live off of – while I’m still in my 30s.
I’m so fond of dividend growth investing because it just plain makes sense.
This strategy practically forces you to invest in world-class enterprises. Only really high-quality businesses can manage to pay out increasing dividends for decades. You cannot run a poor business and still pay out ever-larger cash payments to your shareholders for years on end. It doesn’t work like that.
This pandemic has been a real eye-opener.
And I mean that in a good way.
The vast majority of the businesses I cover and invest in have not made unfavorable changes to their dividends (like cuts or eliminations).
In fact, it’s been quite the opposite.
Most of these businesses have been increasing their dividends throughout 2020, as if this year was just like any other.
The dividend growth strategy generally, and my portfolio specifically, has never faced a test like COVID-19.
They’re both passing with flying colors. This is great news when you’re relying on these dividends to pay your bills.
A dividend increase in normal times is impressive and a vote of confidence by management.
But a dividend increase during a pandemic?
It’s particularly remarkable.
Well, be prepared to be stunned as we kick it up another notch.
I have a list of 10 companies for you that increased their respective dividends at a double-digit rate this year.
This kind of dividend growth during the toughest possible test I could think of proves out an incredible business model.
If you’re looking to sleep well at night, knowing your dividends will flow and grow no matter what, these 10 businesses should be looked at.
Aflac Incorporated (AFL)
The insurance company announced a 17.9% dividend increase on November 18.
AbbVie Inc. (ABBV)
This healthcare giant announced a 10.2% dividend increase on October 30.
Williams-Sonoma, Inc. (WSM)
A high-end home furnishings business, they announced a 10.4% dividend increase on October 12.
Service Corporation International (SCI)
The funeral goods and services company announced a 10.5% dividend increase on November 11.
Nike Inc. (NKE)
The global athleisure behemoth announced a 12.2% dividend increase on November 20.
Texas Instruments Incorporated (TXN)
This major semiconductor company announced a 13.3% dividend increase on September 17.
Broadcom Inc. (AVGO)
Another major semiconductor player, they announced a 10.8% dividend increase on December 10.
Abbott Laboratories (ABT)
This multinational healthcare company announced a 25% dividend increase on December 11.
Crown Castle International Corp. (CCI)
This infrastructure real estate business announced a 10.8% dividend increase on October 21.
Carrier Global Corp. (CARR)
The global HVAC specialist announced a 50% dividend increase on December 9.
But wait. There’s more.
I’m even including a special bonus round in today’s piece.
If double-digit dividend increases during a global pandemic isn’t already impressive enough, there were numerous companies out there announcing special dividends over the last few months.
Here are three examples:
Costco Wholesale Corporation (COST)
The wonderful warehouse announced a $10.00/share special dividend on November 16.
Southside Bancshares, Inc. (SBSI)
This Texas-based regional bank announced a $0.05/share special dividend on November 10.
Fastenal Company (FAST)
The industrial supply company announced a $0.40/share special dividend on November 20.
Dividend growth investing is a wonderful, time-tested investment strategy. And I think it’s become even more wonderful and time-tested after passing through what can almost certainly be considered the ultimate litmus test for business durability and dividend resiliency.
The above examples (along with many others that I didn’t include) only serve to prove that out.
I’m happy to report that the dividend growth investing strategy is just as fantastic as it’s ever been.
What do you think? Impressed by these dividend raises and special dividends? Why or why not?
Thanks for reading.
P.S. Make sure to check out some excellent resources for making better investment decisions, becoming financially free, and living off of dividends.