With the S&P 500 index offering an average dividend yield of just under 2%, investors are still starved for yield.
Dividends matter, there’s no question about that. Over the last 10 years, the S&P 500 is up 71%. But when you include dividends along with the price appreciation, the S&P is up 111% on a total return basis.
But it’s not so much about finding stocks that offer huge dividend yields as it’s about finding companies that have the resiliency to reward shareholders through thick and thin.
These are the stocks that are upping their dividend payments on a continuous basis.
Along those lines, let’s have a look at the Vanguard Dividend Appreciation ETF (NYSEArca: VIG), which tracks stocks that have a history of consistently upping their dividend payments. Its top holdings are Procter & Gamble (NYSE: PG), Microsoft (NASDAQ: MSFT) and Johnson & Johnson (NYSE: JNJ).
The Vanguard Dividend Appreciation ETF has outperformed the S&P 500 by 32 percentage points since its inception in 2006.
With all this in mind, here are the top five dividend increases this month.
No. 1 August Dividend Increase: The J.M. Smucker Co. (NYSE: SJM)
Smucker is upping its quarterly dividend by 5% to 67 cents a share this month. The stock offers a 2.4% dividend yield. Smucker has upped its dividend for 13 years in a row and is one of the more underrated players in the packaged food business.
With its purchase of Big Heart Pet Brands earlier this year it’s now more than just a coffee and peanut butter company.
Smucker trades ex-dividend on Aug. 12.
No. 2 August Dividend Increase: Target (NYSE: TGT)
Target is increasing its quarterly dividend by 8% to 56 cents a share. It’s now paying a decent 2.7% dividend yield. Target has upped its dividend for 47 straight years.
The focus of Target of late has been to streamline its operations. This includes closing its Canadian stores and selling its pharmacy business to CVS (NYSE: CVS). These moves to focus on the U.S. department retail market should help Target continue to outperform other major players.
That includes Wal-Mart (NYSE: WMT). Target shares are up 10% year-to-date, while Wal-Mart is down 17%.
Shares trade ex-dividend Aug. 17.
No. 3 August Dividend Increase: Energizer Holdings (NYSE: ENR)
Energizer Holdings is part of the recent split of the old Energizer, which is now two separate publicly traded companies: Energizer Holdings, a household products company, and Edgewell Personal Care (NYSE: EPC), a personal care products company.
Energizer is quite enticing, with no debt and a relatively high return on invested capital, which clocks in at 20%. Energizer certainly looks to be a great way to profit from the recent wave of spinoffs.
It’s paying its first quarterly dividend as a public company this month, which will be 25 cents a share. Its pro forma dividend yield is 2.6%.
Energizer trades ex-dividend on Aug. 17.
No. 4 August Dividend Increase: Walgreens Boots Alliance (NASDAQ: WBA)
Walgreens is upping its quarterly dividend by 7% to 36 cents a share. Its dividend yield is up to 1.5%. Earlier this year, I profiled Walgreens as the top drugstore stock to own. That remains true, as it continues to be a dividend growth story. Walgreens has upped its dividend for 39 consecutive years.
Walgreens still has growth opportunities in the pharmacy benefits manager space. It’s a market that CVS has successfully penetrated, and which Rite Aid (NYSE: RAD) is just dipping its toes into.
Aug. 17 is a popular day; Walgreens will trade ex-dividend that day as well.
No. 5 August Dividend Increase: Carnival Corp. (NYSE: CCL)
Carnival is the biggest booster on our list. It plans to up its dividend by 20% later this month. It will soon be paying out a quarterly dividend of 30 cents a share, putting its yield at 2.3%.
Late last year, I highlighted Carnival as one of the best beaten down stocks of 2014. This came after a wave of misfortunate events and negative press. Shares are up 60% since then.
But Carnival is still rather interesting. The stock trades at just 16 times next year’s earnings estimates, and it has the best balance sheet among the major cruise line operators.
Shares trade ex-dividend Aug. 19.
Dividends for Every Month of the Year
If you’re looking for just one dividend stock to round out your income stream, consider a little-known company that pays out dividends 12 months of the year.
Click here to see the full details of this company in my Dividend Calendar…