12% Dividend Increase from Kroger ( KR )

Kroger Co Logo

Dividend Increase Announcement

On June 28th, Kroger announced a dividend increase of 12%. This will increase their dividend per quarter from $0.125 to $0.14. It is payable on September 1st for shareholders of record on August 15th. The new quarterly dividend represents an annualized dividend amount of $0.56 per share as compared to the current annualized dividend amount of $0.50 per share.

Target Dividend Information

Annual Dividend: $0.56
Dividend Yield: 1.95%
Payout Ratio: 26.5%
Dividend Growth History: 9 years

Dividend Increase Effect On More Dividends

I am currently holding 18 shares of Kroger. With this 12% increase it will add $1.08 to my Projected Annual Dividend Income.

Conclusion

Yesterday, Kroger announced this dividend increase. Since I originally initiated this position it has seen some swings up and down. The stock took a pretty big hit back last year when Amazon announced its acquisition of Whole Foods. Since then it has worked its way back to its previous levels. I am currently in the black with this stock. I love the company and I think that it is a leader in its industry.

The company currently has a very low dividend yield but with a payout ratio of 26.5% they would have plenty of room to grow their dividend. Despite this I do worry about the fact that they operate in an industry that has very low margins. Some might try and counter this point with the fact that a lot of their stores sell more than just groceries. In some of my local stores they are even franchisees of Starbucks. Regardless the low margins are a concern to me but at the current time I will just continue to hold the stock.

I like the double digit increase and I welcome many more like it in the future.

Regardless of how large or small, I love all dividend increases. That is how we end up with More Dividends 😉

Do you currently hold any stock in Kroger? What do you think of this dividend increase? Just let me know in the comments.

As always I look forward to reading all of your comments and questions, until then….. happy investing!

-Jason from MoreDividends.com

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