Apple’s 10.5% dividend bump was a welcome sight in May. I don’t own a ton of individual shares of Apple but it is represented in a lot of my mutual funds and ETFs so I know that will carry through to those as well.
May is another low month as I get ready for June which is one of the four biggest months for dividends for me as a holder of a lot of mutual funds and dividends.
It’s great to see any stocks you own raise their dividends year over year as it’s a key part of long term returns. I’m not an investor who targets dividends specifically but most of the companies I own and am interested in have excellent and consistent free cash flow which generally leads to regular dividend bumps if the company chooses to return value to shareholders in that manner.
June brings another opportunity for a dividend raises as one of my larger holdings, UnitedHealth Group(UNH) generally announces dividend raises in June. Last year, they bumped the dividend 25% after raising it 33% for two years in a row before that. The company has excellent free cash flow and is growing earnings at a solid pace and even with those big increase, their payout ratio is 33% and that’s off an earnings base in 2016 that’s expected to increase quite a bit in 2017. The yield has fallen recently to 1.39% due to strong performance in the stock so I’m hopeful we see another 25% bump here as the company definitely has the room to keep giving out big increases yearly if it chooses to continue its shareholder return strategy.
I’m excited to see how June looks and am hopeful it’s a bigger month than last September and shows good growth against last June. I saw a 26% bump in March dividends y/y so it’d be awesome to see something close to that in June and would help a lot in getting to my goal of at least 8k in dividends this year.
That’s enough about June. Let’s take a look at how the dividends looked in May and where I sit YTD. Continue reading “May dividend update”