We received US$3.15 (35 cents x 9 shares). After starting off with 6 shares, we’ve added 3 more shares in our basket. We are expecting another 35 cents dividend by the next quarter and let’s see afterward if next year’s dividend increase will be above +20%. In the past 10 years, dividend growth has annually increased by +22% and just last year, its dividend growth is +23.5%. It has been increasing its dividends for many decades so it makes us comfortable that at least in the near future, dividends will still continue to grow.
Despite the Dividend Payout is at 0.40, dividend payout has been steady in the last 4 years though it raises some concerns if dividend growth shall still be above 20% in the future.
Remember, if a dividend payout is 1.0 or higher, then we need to question if the dividend amount is sustainable. For Lowe’s (LOW), we mentioned earlier, we are foreseeing that next year, dividends will still be increasing based on historical trends and the dividend payout is below 1.0. Shareholders will be upset if there will be no increase from Lowe’s. What we need to anticipate is if it will still be a +20% growth for next year.
Nevertheless, we still have great confidence with this dividend champion.