How do you find good information about dividend stocks?
The thing is, stable dividend payers sometimes tell you what their plans are. Not always, but often enough that it’s important to listen. They might tell you that the dividend is in jeopardy in order to minimize Wall Street’s surprise should a dividend cut be necessary.
On the other hand, they might tell you about their plans to increase the dividend before they’re ready to actually raise it. I’m not sure why they’d do that. Why not just raise the dividend instead of telling us you’ll raise it? I mean, other than the obvious reason that they’re not ready to pay a higher dividend until some point in the future so they can’t announce it until they’re ready to pay it.
Take Spectra Energy for example.
- In January, Spectra announced their plans to raise the dividend at least ¢8/year for “the next several years”. (Look at the paragraph right after the bullets for that juicy bit of news.)
- In June, they announced their plans to increase that increase. The stock liked that news which was a good side-effect too!
- In November, they announced that they’ll increase the dividend in time for the 2014 payments. They made the announcement with their 3rd quarter results. That link opens a PDF, do a search on dividend to see the following:
The drop-down also allows for a significant dividend increase at Spectra Energy and significant increases in Spectra Energy Partners’ distributions to unitholders. The cash to Spectra Energy from its limited partnership and general partnership distributions will support Spectra Energy’s ability to raise its annual dividend by 12 cents per year, effective in the first quarter of 2014, an annual increase of about 10 percent from 2013. Spectra Energy expects to continue annual dividend increases at this level through 2015.
It’s fascinating that they come out ahead of the increase to share details this specific. Is this news priced into the price of the stock? Most likely. Unlike the June announcement, the raise won’t likely cause the stock to jump. However, at ~$35/share a ¢12 raise from $1.22 to $1.34 in January means that the true yield is 3.83% ($1.34/$35) not 3.49% ($1.22/$35). That makes a difference. It’s good to know that your Elephant’s Paycheck will be increasing nicely.
This is the sort of financial news you should be reading, not the crap on TV that makes investing more like a sport than a discipline.
That said, last year Spectra increased their dividend in late 2012, payable in December 2012. This year’s increase (in January or February 2014) payable in March, means the increase is coming a quarter later than it did last year. That’s a little disappointing.