Dividend Hike: I Got a Raise!

Disney Dividend HikeThis upcoming March, I will reach my 10th anniversary at the law firm where I’m employed in the marketing department. Every year I’ve “made the cut” for a salary increase, and every year that increase has fallen short of the inflation rate.

Even a hamster doesn’t move backward the harder he runs in the wheel. I’m basically moving backward at my job in terms of paying for the basic necessities in life. That won’t change no matter how much effort I put into the work.

One of the many benefits of dividend growth investing is that middle word: “growth.” Strong companies who continually increase their earnings and are willing to share that success with shareholders, usually on an annual basis. It’s like getting a hefty raise without sitting through a dreaded annual review.

I deliberately used the word “hefty” as that’s the perfect adjective to describe what happened today, the one-year anniversary of Disney’s (DIS) last dividend raise of 15 percent to $0.86 per share. The House of Mouse was widely expected to raise their dividend today ahead and wow, they sure did.

Today Disney announced a dividend increase of 34 percent to $1.15 per share, blowing away even the most aggressive estimates that would have pushed it to $1.00 a share.

Here’s what Robert A. Iger, Chairman and Chief Executive Officer, had to say about the Disney dividend increase:

“Disney delivered the highest results in its history in Fiscal 2014, reflecting the extraordinary quality of our creative content and the unparalleled strength of our brands. We achieved record revenue, net income and earnings per share for the fourth year in a row, and we are delighted to be able to increase our shareholder dividend by 34 percent while continuing to invest for future growth.”

I currently own 50 shares of Disney stock that were set to pay me $43 in January as the company unfortunately pays their dividends once per year. With the 34 percent raise that payout has increased to $57.50. That’s great news, especially in conjunction with my advantageous Black Friday splurge.

Let me say that again in case you thought it was a typo: 34 percent.

Here’s one of the many reasons Disney’s stock and earnings continue to surge and should do so for many years to come.

As Yoda might say, “A happier shareholder I could not be.”

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