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6 Stocks Expected to Grow Their Dividends in 2013

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December 31, 2012 – Comments (0) | RELATED TICKERS: MMM , MCD , XOM

In this space we normally look at companies that have recently raised their dividends. However, as the year draws to a close there were very few companies of note increasing their dividends this week. With that, I thought it would be interesting to see who were the big dividend raisers in 2012 and what we might see in 2013. Here are six companies for your consideration:

3M Company (MMM) in February 2012 increased its quarterly dividend 7% to $0.59 per share. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 54 consecutive years.  Based on its current free cash flow payout and historical increases, I would expect 2013's increase to be in the 4-5% range. The stock is currently yielding 2.5%.

Johnson & Johnson (JNJ) in April 2012 the company increased its quarterly dividend 7% to $0.61 per share. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 54 consecutive years. Based on its current free cash flow payout and historical increases, I would expect 2013's increase to be in the 5-6% range. The stock is currently yielding 3.5%.

McDonald's Corp. (MCD) in November 2012 raised its dividend 10% to $0.77/share from $0.70/share. In 2011 it raised its dividend 11.9%. The company has paid a cash dividend to shareholders every year since 1976 and has increased its dividend payments for 36 consecutive years. Based on its current free cash flow payout and historical increases, I would expect 2013's increase to be in the 6-8% range. The stock is currently yielding 3.4%.

Exxon Mobil Corporation (XOM) in April 2012 increased its quarterly dividend 21% to $0.57 cents per share.The company has paid a cash dividend to shareholders every year since 1882 and has increased its dividend payments for 30 consecutive years. Based on its current free cash flow payout and historical increases, I would expect 2013's increase to be in the 5-8% range. The stock is currently yielding 2.6%.

Genuine Parts Company (GPC) in February 2012 increased its quarterly dividend 10% to $0.495 per share. GPC has paid a cash dividend every year since going public in 1948, and 2012 marks the 56th consecutive year of increased dividends paid to shareholders.  Based on its current free cash flow payout and historical increases, I would expect 2013's increase to be in the 8-10% range. The stock is currently yielding 3.1%.


Target Corp. (TGT) in June 2012 raised its dividend 20% to $0.25/share from $0.37/share. In 2011 it raised its dividend 27%. The company has paid a cash dividend to shareholders every year since 1965 and has increased its dividend payments for 45 consecutive years. Based on its current free cash flow payout and historical increases, I would expect 2013's increase to be in the 15-20% range. The stock is currently yielding 2.4%.

Obviously, the above increases are pure speculation on my part. But in a world where cash is king, somehow great companies always find a way to increase their dividends each year.

Full Disclosure: Long MMM, JNJ, MCD, GPC. See a list of all my dividend growth holdings here.

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