Last year, investors were concerned about dividend cuts. This year? If a company doesn't announce a dividend increase within 30 seconds of releasing its quarterly reports, there's panic.
After Johnson & Johnson reported on Tuesday an increase in its first quarter earnings, trimmed its full-year forecast because of foreign exchange concerns and omitted any reference to its dividend (full disclosure: I own shares in Johnson & Johnson), Think Dividends posted this blog item:
"It appears as if Johnson & Johnson's (JNJ) 47 year streak of consecutive dividend increases has come to an end. For the past five years, JNJ has raised their dividend in April. Today, in all of the earnings releases and articles that I have read, there was no mention of the word increase, let alone dividend," the blogger wrote.
That's because Johnson & Johnson releases information about dividend hikes about a week or so after it reports its first quarter results. In 2009, the company reported on April 14, but announced a 6.5 per cent dividend boost nine days later, on April 23. In 2008, it reported on April 15 and announced a 10.8 per cent dividend boost on April 24 - also nine days later.
If Johnson & Johnson keeps its dividend-hiking record intact this year, Think Dividends (and others) can expect an announcement next Thursday. According to Bloomberg, analysts estimate the quarterly payout will be raised to 53 cents (U.S.) from 49 cents, which is an 8.2 per cent increase.