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Expect a Quick 2019 Dividend Increase From These 3 Stocks

By Dan Caplinger - Updated Apr 10, 2019 at 10:39PM

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These companies usually don't make shareholders wait long.

If you want to get reliable income from your investment portfolio, dividend stocks are worth a closer look. By providing regular cash payments, dividend stocks can meet some of your income needs while they give you the chance to participate in the future growth of their underlying businesses.

A handful of elite dividend stocks have put together impressive streaks of regular annual dividend increases, and their investors have relied on them to keep raising their payouts year after year. Among them, a select few make an effort to announce dividend increases as early in the new year as possible. Below, we'll look at 3M (MMM -0.28%), Chevron (CVX -1.50%), and Aflac (AFL -0.23%) to see why investors should have confidence in getting a New Year's gift in the near future.

A blue mosaic background with sector-symbol tiles and the word Dividends in white

Image source: Getty Images.

Dividends that stick

3M is a blue chip conglomerate with a wide range of businesses spanning areas such as consumer goods, industrial products, and healthcare equipment. Perhaps best known as the inventor of the Post-it sticky note, 3M is a member of the Dow Jones Industrial Average and has a long history of innovation and growth.

3M also has a nearly unparalleled track record of dividend growth, with 60 years of consecutive annual dividend increases. With a dividend yield of 2.6%, 3M already pays an above-average amount to shareholders, but it typically announces increases in the first half of January. Last year's boost was a whopping 16%, reflecting the success the company has enjoyed. Such a large increase isn't guaranteed for 2019, but it's a good bet that 3M will deliver something that shareholders will appreciate.

Looking for more energetic dividend growth

Also among the giants of the corporate world is Chevron, one of the largest oil companies in the world. Chevron is also a Dow component, and were it not for its illustrious rival ExxonMobil, the company would likely be the most recognized oil company in the U.S., with a fully integrated set of upstream, midstream, and downstream businesses all supporting the overall business.

For dividend investors, Chevron offers an extremely attractive yield of nearly 4%. Recent choppiness in oil prices accounts for some of that yield, as it's kept the stock from participating when the broader market has been able to rally. Even more impressive, though, is the company's 31-year streak of higher dividends, with last year's 4% boost coming late in January. With production on the rise, investors can anticipate that Chevron will have ample cash flow to support growing dividends for the indefinite future.

This stock gives dividend investors something to quack about

Finally, Aflac has become a household name in the U.S., thanks largely to its commercial advertising campaign. Yet as prominent as the supplemental insurance company is domestically, Aflac does even more business in Japan, where it offers similar insurance products to millions of consumers. The company's trans-Pacific approach has served it well, and dividend income has always played a key part of its overall strategy in managing capital.

Aflac came into 2019 with a 36-year streak of giving shareholders annual dividend raises, although until last year, those boosts usually came toward the end of the year. However, tax reform led Aflac to give investors a second increase around the end of January, and it seems likely that the insurer will stick with its new schedule. Although tax reform was a one-time event, shareholders should still expect to receive around 4% or 5% more in dividends.

Celebrate 2019 with higher dividends

There's no solid guarantee that these three stocks will continue to deliver dividend growth in the same way they have in the past. However, all the same elements are in place now that helped give them the long-term success they've enjoyed for decades. So there's every reason to believe that Aflac, Chevron, and 3M will be able to sustain their streaks and deliver more income to investors this year.

Check out the latest 3M, Chevron, and Aflac earnings call transcripts.

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Stocks Mentioned

Chevron Corporation Stock Quote
Chevron Corporation
$144.78 (-1.50%) $-2.20
3M Company Stock Quote
3M Company
$129.41 (-0.28%) $0.36
Aflac Incorporated Stock Quote
Aflac Incorporated
$55.33 (-0.23%) $0.13

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