Thirteen Cash Machines Hiking Dividends Last Week

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:

This is a list of companies for further review. Most seem attractive as businesses, but that doesn’t mean that they should be invested in at any price, regardless of valuation.

The next step is to check each business, in order to determine if it is worth further review. I would look at ten year trends in earnings per share, dividends per share, payout ratios, shares outstanding. I would try to understand what the business does, and make an assessment if the good times would continue, so that I can expect higher earnings, dividends and intrinsic values over time. I would look at the valuation relative to earnings and dividend growth, in order to determine if the business is fairly valued, if it looks promising too. 

19 Dividend Growth Stocks Raising Dividends Last Week

I track the dividend investing universe for dividend increases every single week. This exercise helps me monitor existing holdings, and potentially identify companies for further research.

Dividend increases are important according to the dividend signaling theory. Dividend increases provide key information to the trained eye about the fundamental picture of the company, its business prospects and management sentiment.

As a Dividend Growth Investor, I typically focus my attention on the companies that raise dividends for at least ten years in a row. This is a requirement that helps me weed out a lot of the cyclical names that were simply present during a portion of an economic cycle. This requirement helps me focus on the companies that have the underlying economics to potentially keep delivering through the ups and downs of a typical cycle.

Over the past week, there were 49 companies that raised dividends. Nineteen of them also have a ten year track record of annual dividend increases under their belts. The companies include:

Just because a company raised dividends last week AND has a ten year track record of annual dividend increases, does not make it an automatic buy. It merely may put it on my list for further research.

The next step in the process would be to review trends in earnings per share, in order to determine if the dividend growth is on strong ground. Rising earnings per share provide the fuel behind future dividend increases.

This should be followed by reviewing the trends in dividend payout ratios, in order to check the health of dividend payments. A rising payout ratio over time shows that future dividend growth may be in jeopardy. There is a natural limit to dividends increasing if earnings are stagnant or if dividends grow faster than earnings.

Obtaining an understanding behind the company’s business is helpful, in order to determine how defensible the dividend will be during the next recession. Certain companies are more immune to any downside, while others follow very closely the rise and fall in the economic cycle.

Of course, valuation is important, but it is more art than science. P/E ratios are not created equal. A stock with a P/E of 10 may turn out to be more expensive than a stock with a P/E of 30, if the latter is growing earnings and the former isn’t. Plus, the low P/E stock may be in a cyclical industry whose earnings will decline during the next recession, increasing the odds of a dividend cut. The high P/E company may be in an industry where earnings are somewhat recession resistant, which means that the likelihood of dividend cuts during the next recession is lower.

Relevant Articles:

- Twenty Dividend Growth Stocks Raising Distributions Last Week

- Four Dividend Growth Companies Raising Dividends Last Week

- Five Dividend Growth Stocks Raising Dividends Last Week

- Three Dividend Growth Stocks In The News

The Performance of the Average Investor - Myth vs Reality

You've probably seen this chart, comparing the returns of the "average investor" to that of various other asset classes.

The conclusion this chart tries to convey is that the performance of the "average investor" is awful.

This is a useful conclusion, because this "study" is sold to financial advisors to use in their marketing materials. If you convince investors that they don't know what they are doing, you can generate fees for a long time. Companies like JP Morgan simply reprint the results.

The fun part is that the majority of people who quote this study, do not know how it is calculated.  Nor where it came from. Or even reviewed the paper it came from (it's hard to obtain, and you need to pay for it).

Have you ever stopped to think for yourself, how exactly did they calculate the performance of the average investor?

Also, how did they determine who the average investor is?

After all, if you look at all investors, they should in theory have overall returns that are close to what the total of all assets generated (minus fees, taxes etc)

Even if a lot of investors lose money to overtrading, and dumb stock picks, there have to be other investors out there to offset that foolishness, at least to some portion.

And to add insult to injury, a lot of these "average investors" out there also have a financial advisor too.

Something just doesn't add up.

By the way, it is easy to lead people to conclusions, if you compare apples to oranges

1. From my research, the study looks at mutual fund flows and compares the returns of someone who essentially dollar cost averages monthly over a 20 year time frame (e.g. 2002-2022) to someone who invested a lump sum amount (e.g in 2002)

You can run the numbers yourself for any investment, but if you bought $100 worth of S&P 500 every month between 2002 and 2022, your end results would be less than someone who simply put $24,000 in S&P 500 at the start of 2002.

In one of the rebuttals of the study, someone found out that the performance of the "average investor" was very similar to that of someone who simply dollar cost averaged every month for the 20 years. This is why many believe that the performance of average investor is mostly an attempt to compare apples to oranges, in order to "prove" how inadequate the average investor is.

2. Comparing the fund flows for all asset classes also does not provide a useful comparison.

That's because certain asset classes like money market mutual funds are used like a savings account for example. The goal of that money should not be compared to performance of say S&P 500. That's an apples to oranges comparison.

Note, that doesn't mean that the so called behaviour gap does not exist (meaning that the average investor does worse than their benchmark). But it should not be as pronounced and as starkingly high.

There are other organizations out there that have attempted to calculate average returns. Morningstar being one of them. While there is a behaviour gap accross many asset classes (stocks/bonds etc), it is not that high if you try to be objective in how you setup your population, and make apples to apples comparisons.

Conclusion: 

You need to trust, but verify.

Overall, I belive that the personal investor of today has the right tools to build the right portfolios to suit their needs. Information is abundant, commissions are pretty much non-existent, and a lot of communities (e.g. Dividend Growth Investors) are aware of the benefits of long-term investing, minimal turnover, diversification, simple tax planning etc. The important thing to do is to educate yourself, as your money is on the line. Nobody cares more about your money than you do.

Note that this posts represents the personal opinions of the author. It is based on research information available on the internet.

Twenty Dividend Growth Stocks Raising Distributions Last Week

I review the list of dividend increases every week as part of my monitoring process. Dividend increases provide very good signaling power. The important skill is to be able to evaluate each increase, in order to determine any aberrations.

Over the past week, there were 36 companies that raised dividends in the US. Twenty of them also have a track record of at least ten consecutive annual dividend increases.

I compiled the data for each one of those 20 companies to show dividend streak in years, as well as the comparison of latest dividend increase to the ten year average. In addition, readers can see the forward P/E as well as teh dividend yield, based on the new distribution. 

The companies include:

Note that this table shows the dividend increases relative to the prior dividend payment. Typically, for most situations, this is a good gauge for year over yar increases. In some cases however, such as Comfort Systems, this understates dividend increases. As a matter of fact the new dividend for Comfort Systems is over 71% higher than the dividend paid during the same time last year. They've had 4 quarterly dividend increases in a row in the past 12 months or so.

This is a long-winded way of stating that this list is not going to provide all the data points for your research. It's simply a data point in the monitoring process. You need to do more reviews from it.

In my initial reviews, I typically look for:

1. Dividend Streak

2. Trends in earnings per share

3. Trends in dividends per share

4. Trends in payout ratios

5. Trends in shares outstanding

6. Valuation

7. Understanding business type

Also note that if you want to calculate the forward dividend payout ratio, you can do so pretty easily using the Forward P/E and Dividend Yield. For example, a Forward P/E of 20 is equivalent to an earnings yield of 5%.  If the dividend yield is 2.50%, then the payout ratio is a function of the dividend yield over the earnings yield, or a payout ratio of 50%.

Alternatively, one can also convert the dividend yield into a price to dividend ratio. A dividend yield of 2.50% is equivalent to a price to dividend ratio of 40. If the price to earnings ratio is 20, then the forward payout ratio is a function of the price earnings ratio over the price to dividend ratio, or a payout ratio of 50%.

Relevant Articles:

- How to read my weekly dividend increase reports

- How to Retire Early With Tax-Advantaged Accounts

- How to read my stock analysis reports

Four Dividend Growth Companies Raising Dividends Last Week

I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor the dividend growth investing universe. This helps me monitor existing positions, and potentially uncover companies for further research.

I focus on those companies that have managed to increase dividends for at least a decade. Over the past week, there were four companies in the US that raised dividends, which also have a ten year track record of annual dividend increases under their belt. The companies include:

Agree Realty Corporation (ADC) is a publicly traded real estate investment trust that is involved in the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants.

The REIT hiked monthly dividends to $0.262/share. This is the 13th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 6%.

Between 2015 and 2024, the REIT grow FFO/share from $2.40 to $3.78.

Agree Realty is expected to generate $4.25/share in FFO in 2025.

The stock sells for 17.65 times forward FFO and a dividend yield of 4.20%

A. O. Smith Corporation (AOS) manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. 

The company increased quarterly dividends by 5.90% to $0.36/share. This is the 32nd year of annual dividend increases for this dividend aristocrat. Over the past five years, the company has managed to grow dividends at an annualized rate of 7.60%.

Between 2015 and 2024, the company managed to grow earnings from $1.59/share to $3.65/share.

The company is expected to earn $3.84/share in 2025.

The stock sells for 18.20 times forward earnings and a dividend yield of 2.07%

Lincoln Electric Holdings, Inc. (LECO) designs, develops, manufactures, and sells welding, cutting, and brazing products in the United States and internationally. It operates in three segments: Americas Welding, International Welding, and The Harris Products Group. 

The company increased quarterly dividends by 5.30% to $0.79/share. This is the 30th consecutive annual dividend increase for this dividend champion. Over the past five years, the company has managed to grow dividends at an annualized rate of 8.60%.

Between 2015 and 2024, the company grew earnings from $1.70/share to $8.15/share.

Lincoln Electric is expected to earn $9.71/share in 2025.

The stock sells for 24.20 times forward earnings and a dividend yield of 1.34%.

IDACORP, Inc. (IDA) engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States. 

The company increased quarterly dividends by 2.30% to $0.88/share. This is the 13th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 5.50%.

Earnings grew from $3.88/share in 2015 to $5.50/share in 2024.

The company is expected to earn $5.85/share in 2025.

The stock sells for 23.23 times forward earnings and a dividend yield of 2.53%.

Relevant Articles:

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