LetsGrow (@LetsGrow) on getquin

7Mon·

Falls with American Tower another dividend growth darling? American Tower $AMT (+1%)
cut a few days ago cut the dividend by just under 5% compared to the last payout. According to the earnings call in 2024 also no quarterly dividend increases will no longer take place.

AMT is thus apparently following the fate of its direct direct competitor. Crown Castle $CCI (+0.44%) has announced the dividend increase in October 2023 skipped
skipped and, according to the earnings call, will only in 2026 again increase.

In contrast to Crown Castle, however, the CEO of AMT signaled that this is a one-off effect. one-off effect effect. The dividend is to be 2025 therefore increased again again in 2025.

At the same time, it cannot be denied that the coincidence of the "freezing"/cutting of the dividend at AMT and CCI is due to short- to medium-term problems of both companies in the mobile phone mast business business.

Both AMT and CCI are larger positions in my portfolio, which is focused on dividend growth. My conclusion: I remain invested in both as I see medium to long term again stronger growth in the in the core business in the medium to long term, which should then also feed through to the dividends. For me, the dividend freeze represents a short-term headwind that does not fundamentally shake the investment hypothesis for the mobile expansion. However, I will take a particularly close look at the next earnings calls in order to recognize possible alarm signals.

LetsGrow

@LetsGrow

10Mon·

Is Dividend Growth dead?

The more I look at the development of dividends from popular growth stocks, the more often I notice a negative trend. Companies that were known for consistently announcing double-digit percentage increases in their dividends have been increasing them in ever smaller steps for around two years.

I have therefore all the shares in my portfolio under this aspect. To do this, I compared the long-term growth rate over 10 years and the last announced dividend increase.

My entire portfolio is heavily geared towards dividend growth, so the results should be representative. These are the examples of recent dividend increases that I could find to support my hypothesis:

[Share: Last annual dividend increase (10Y: 10-year annual dividend increase)]

AbbVie: 4.7% in October 2023 (10Y: 14.1% p.a.)
Amgen: 5.6% in December 2023 (10Y: 16.3% p.a.)
Apple: 4.3% in May 2023 (10Y: 8.5% p.a.)
Best Buy: 4.5% in March 2023 (10Y: 18.4% p.a.)
Blackrock: 2% in January 2024 (10Y: 11.5% p.a.)
Corning: 3.7% in February 2023 (10Y: 11.1% p.a.)
Crown Castle: 0% in October 2023 (9Y: 14.4% p.a.)
Huntington Ingalls: 4.8% in November 2023 (10Y: 25.9% p.a.)
LCI Industries: 0% in May 2023 (7Y: 17.0% p.a.)
Lockheed Martin: 5% in October 2023 (10Y: 9.8% p.a.)
Prudential Financial: 4.2% in February 2023 (10Y: 11.2% p.a.)
T. Rowe Price: 1.7% in February 2023 (10Y: 12.4% p.a.)
Texas Instruments: 4.8% in October 2023 (10Y: 16.7% p.a.)
UPS: 6.6% in January 2023 (10Y: 10.1% p.a.)

Of course, I also have some counterexamples found in my portfolio: American Tower, Bank OZK, Broadcom, Canadian Natural Resources, CME Group, Darden Restaurants, Federal Agricultural Mortgage, Morgan Stanley, Packaging Corporation of America, Skyworks Solutions, The Home Depot and Visa.

Do you notice similar developments in your portfolio/watchlist?

3 Comments

GeldGenie@GeldGenie

7Mon

Great contribution 👍 I'll take a look at some of them separately.

For me 3 points:
- Payout ratio: Divi. For me, growth is only healthy if the payout ratio remains stable. How did this behave with your shares?
- Investment opportunities: Divi. should only be distributed if the UG itself cannot invest the profits attractively enough. Imo, some of your listed companies have invested intelligently. In the long term, this can be more profitable than the dividend.
- Perpetual growth: the compound interest effect we all love makes it almost impossible to maintain double digit divi growth long term 15y +). The other thing is exceptions & unicorns - which sooner or later have to slow down too. Btw see China. 2-digit growth at any cost - to the limit and beyond.

Happy start to the week
GG

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