AFLAC (AFL) announced yesterday that it has increased its dividend for the fourth quarter to $0.33 per share from $0.30 per share. That’s a 10% increase over the previous quarter, and means AFLAC has now increased their dividend 29 years in a row.
One of the great things about owning dividend stocks is that as companies increase their dividend it is like getting a raise – and in some cases a mighty big one. Last quarter, Microsoft (MSFT) raised their dividend by a whopping 25%. When’s the last time you got a 25% raise at work? Yeah, me neither.
I currently own 60 shares of AFLAC, so I stand to earn about $1.80 more than I would have before AFLAC announced the dividend increase. Doesn’t sound like much, but since I plow those dividend earnings right back into more shares of AFL, it will compound and grow over time.
I’m looking forward to my other holdings announcing their quarterly earnings over the next week or so. It’s a good time to be in dividend growth stocks, but I’m not sure I’d start a position at these levels unless you plan to hold for a long, long time. Things will likely cool off a bit after the first of the year, which could lead to more buying oppportunities then.
Disclosure: Long AFL, MSFT