As part of my review process, I evaluate dividend increases every week. This process helps me to see how my portfolio holdings are doing. It also helps me to uncover and review new candidates for my portfolio.
I look for dependable dividends from companies with a minimum ten-year streak of annual dividend increases, fueled by earnings growth. I look for dependable dividends from companies with dependable earnings, and solid competitive advantages, which I can acquire at attractive valuations.
During the past week, the following companies increased dividends to shareholders. Each company has a ten year streak of annual dividend increases. I review the latest dividend increase relative to the ten year average, and the growth in earnings per share over the past decade. Last but not least, I discuss current valuation. The companies include:
Bristol-Myers Squibb Company (BMY) discovers, develops, licenses, manufactures, and markets biopharmaceutical products worldwide. It offers products in hematology, oncology, cardiovascular, and immunology therapeutic classes.
Bristol Myers Squibb increased its quarterly dividend by 8.90% to 49 cents/share. This marks the twelfth consecutive fiscal year that Bristol Myers Squibb increased its dividend payouts. Over the past decade, this dividend achiever has managed to grow dividends at an annualized rate of 2.80%. I am glad to see it starting to kickstart earnings and dividend growth.
The company is expected to earn $6.38/share in 2020.
The stock is selling for 9.50 times forward earnings and yields 3.23%. Check my analysis of Bristol-Myers Squibb for more information about the company.
Abbott Laboratories (ABT) discovers, develops, manufactures, and sells health care products worldwide.
Abbott raised its quarterly dividend by 25% to 45 cents/share. Abbott has increased its dividend payout for 49 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index. The company has managed to increase dividends at an annualized rate of 7.80% over the past five years.
The company is expected to generate $3.55/share in 2020
Abbott stock is selling for 30.10 times forward earnings and yields 1.68%.
Pfizer Inc. (PFE) develops, manufactures, and sells healthcare products worldwide.
Pfizer increased its quarterly dividend by 2.60% to 39 cents/share. That marked the tenth year of consecutive annual dividend increases for the company. Over the past decade, Pfizer has managed to increase distributions at an annualized rate of 6.10%.
The company is expected to earn $2.84/share in 2020.
The stock is selling for 14.25 times forward earnings and yields 3.80%.
Mastercard Incorporated (MA), a technology company, provides transaction processing and other payment-related products and services in the United States and internationally.
Mastercard hiked its quarterly dividend by 10% to 44 cents/share. Mastercard has managed to increase dividends at an annualized rate of 36.20% over the past decade.
The company is expected to earn $6.36/share.
The stock sells at 51.50 times forward earnings and yields 0.54%.
Casey's General Stores, Inc. (CASY) operates convenience stores under the Casey's and Casey's General Store names.
Casey’s General Stores raised its quarterly dividend by 6.30% to 34 cents/share. That’s the 21st consecutive annual dividend increase for this dividend achiever. During the past decade, the company has managed to increase distributions at an annualized rate of 14.30%.
The company is expected to earn $8.32/share in 2021.
The stock sells for 21.68 times forward earnings and yields 0.78%.
W. P. Carey Inc. (WPC) is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. It invests in the real estate markets across the globe. The firm primarily invests in commercial properties that are generally triple-net leased to single corporate tenants including office, warehouse, industrial, logistics, retail, hotel, R&D, and self-storage properties.
W.P. Carey raised its quarterly dividend by 0.20% to 1.046/share. This is an 0.80% increase over the dividends from the same time last year. Annualized dividend growth has been slowing down over the past one, three and five years.
The REIT sells for 14.50 times forward FFO and yields 6.10%. Check my analysis of W.P. Carey for more information on this dividend achiever.
SEI Investments Company (SEIC) is a publicly owned asset management holding company.
SEI Investments increased semi-annual dividends by 5.70% to declares $0.37/share. This marked the 30th consecutive annual dividend increase for this dividend champion. Over the past decade, the company managed to increase dividends at an annualized rate of 15.20%.
The company is expected to earn $2.91/share in 2020.
The stock is selling for 19.22 times forward earnings and offers a dividend yield of 1.31%.
Erie Indemnity Company operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States.
ERIE Indemnity (ERIE) raised its quarterly dividend by 7.30% to $1.035/share. This marked the 31st year of annual dividend increases for this dividend champion. Over the past decade, the company managed to increase dividends at an annualized rate of 7.20%.
The company is expected to earn $5.67/share in 2020.
The stock sells for 42.27 times forward earnings and yields 1.77%.
Pentair plc (PNR) provides various smart water solutions worldwide. It operates through three segments: Aquatic Systems, Filtration Solutions, and Flow Technologies.
Pentair raised its quarterly dividend by 5.30% to 20 cents/share. 2021 will mark the 45th consecutive year that Pentair has increased its dividend.
The company is expected to earn $2.43/share in 2020.
The stock sells for 21.14 times forward earnings nad yields 1.55%.
CubeSmart (CUBE) is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers.
CubeSmart raised its quarterly dividend by 3% to 34 cents/share. This is the 11th consecutive year of dividend increases for this dividend achiever. During the past decade, it has managed to grow dividends at an annualized rate of 29%.
The stock sells for 19.77 times forward FFO and yields 4.13%.
Mid America Apartment Communities (MAA), an S&P 500 company, is a real estate investment trust, or REIT, focused on delivering full-cycle and superior investment performance for shareholders through the ownership, management, acquisition, development and redevelopment of quality apartment communities in the Southeast, Southwest, and Mid-Atlantic regions of the United States.
Mid America Apartment Communities raised its quarterly dividends by 2.50% to $1.025/share. The REIT is a dividend achiever with 10 years of annual dividend increases under its belt. Over the past decade, it has managed to increase dividends at an annualized rate of 4.60%.
The stock sells at 19.28 times forward FFO and yields 3.37%.
Alexandria Real Estate Equities, Inc. (ARE) is a real estate investment trust that invests in office buildings and laboratories leased to tenants in the life science and technology industries.
Alexandria Real Estate Equities raised its quarterly dividends by 2.80% to $1.09/share. This is the second increase this year, bringing the new distribution to be 5.80% higher than the dividend paid during the same time last year. During the past decade, this REIT has managed to increase distributions at an annualized rate of 5.50%.
The stock is selling for 23.60 times forward FFO and yields 2.53%.
Norwood Financial Corp. (NWFL) operates as the bank holding company for Wayne Bank that provides various banking products and services.
Norwood Financial raised its quarterly dividend by 4% to 26 cents/share. This marks the twenty-ninth consecutive year of dividend increases for the Company. Over the past decade, the company has managed to increase dividends at an annualized rate of 3.90%.
The stock sells for 13.87 times forward earnings and yields 3.85%.
Trinity Industries, Inc. (TRN) provides rail transportation products and services in North America. It operates through three segments: Railcar Leasing and Management Services Group, Rail Products Group, and All Other.
Trinity raised its quarterly dividend by 10.50% to 21 cents/share. This marked the 11th consecutive annual dividend increase for this dividend achiever. During the past decade, the company managed to grow distributions at an annualized rate of 14.90%.
The company is expected to earn 42 cents/share in 2020.
The stock yields 3.25% and sells for a forward P/E of 62.
Relevant Articles:
- Ten companies delivering value to their shareholders
- Nine Cash Machines Hiking Dividends Last Week
- Eleven Dividend Growth Stocks That Grew Dividends Last Week
- Busiest Week for Dividend Increases Since February
There were several companies over the past week which announced their intent to raise dividends to shareholders. It is always great to see companies that are able to extend their long streaks of annual dividend increases. I find dividend increases to be a good indicator of how company executives feel about the near-term business environment. It also shows their confidence in the company’s growth prospects.
Factors that boards of directors consider when setting the dividend include future earnings expectations, payout ratio and dividend yield relative to those at peer companies, as well as returns available on other income-oriented investments.
This is why I find it very helpful to review dividend increases every week for established dividend growth companies. To be included in this list, a company should have managed to reward shareholders with a dividend hike for at least ten years in a row.
I focused on companies that can afford to grow dividends for at least a decade. I figured that a company which has managed to boost dividends during a recession and an expansion, or even longer, is better suited for further research by a long-term dividend growth investor like me.
In my previews, I look at the most recent dividend increase, and compare it to the ten year average. While there are some year-over-year fluctuations in dividend growth, it is helpful to see if dividend growth is decelerating.
In addition, it is helpful to review trends in earnings and dividends, alongside dividend payout ratios. This is another indicator of dividend safety.
Last, but not least, I also try to review the valuation behind every company. I prefer to buy future dividend income at attractive valuations; overpaying for future dividend income is not a good business decision.
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