Nine Dividend Growth Stocks Raising Dividends Last Week

I review the list of dividend increases, as part of my monitoring process. This exercise helps me monitor existing holdings and identify companies for further research.

This exercise is also a good handle of how I review companies quickly, before deciding if they are worth further research or not.

In general, I look for companies that have raised dividends for at least a decade. This provides signaling value to me as to the type of company and types of cashflows.

Next, I look at the trends in earnings per share over the past decade. This helps me see if the dividend increases are based on improvements in the business profitability. Without growth in earnings per share, future dividend growth will be limited.

Next, I also look at the most recent dividend increase, and compare it to the 5 and/or 10 year average. I look at that in conjunction with the trends in earnings per share. 

It's also helpful to look at the payout ratio, and trends in it, in order to evaluate dividend safety. 

It all comes down together, into one picture, if yo look at all those factors together.

Of course, even the best fundamental story is not worth overpaying for. One needs to look at valuation, and determine whether this business is a good value today, or would be a good value at a lower price somewhere down the road.

Last week, there were 24 companies that increased dividends in North America. Nine of those companies have a ten year track record of annual dividend increases. The companies include:

CubeSmart (CUBE) is a Real Estate Investment Trust which owns, operates, develops, manages and acquires self-storage properties.

The REIT hiked its quarterly dividend by 2% to $0.52/share. This is the 14th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 16.11%.

FFO/share increased from $0.92 in 2014 to $2.70 in 2023.

It is expected to generate $2.64/share in FFO in 2024.

The stock sells for 16.20 times forward FFO and yields 4.90%.

First Farmers Financial Corporation (FFMR) operates as the financial holding company for First Farmers Bank & Trust that provides banking products and services to individuals, families, and businesses. 

The company increased its quarterly dividends by 2.08% to $0.49/share. This is the 35th consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to grow dividends at an annualized rate of 16.75%.

The company managed to grow earnings from $2.27/share in 2014 to $6.57/share in 2023.

The stock sells for 10 times earnings and yields 3%.

First Financial Corporation (THFF) through its subsidiaries, provides various financial services. 

The company raised its quarterly dividends by 13.33% to $0.51/share. This was the 35th consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to grow dividends at an annualized rate of 1.18%.

The company managed to grow earnings from $2.55/share in 2014 to $5.08/share in 2023.

The company is expected to earn $4.07/share in 2024.

The stock sells for 11.45 times forward earnigns and yields 4.38%.

Fulton Financial Corporation (FULT) operates as a financial holding company that provides consumer and commercial banking products and services in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. 

The company increased its quarterly dividends by 5.88% to $0.18/share. This is the 10th consecutive annual dividend increase for this newly minted dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 6.84%.

The company managed to grow earnings from $0.85/share in 2014 to $1.66/share in 2023.

The company is expected to earn $1.73/share in 2024. 

The stock sells for 11.30 times forward earnings and yields 3.67%.

Mastercard Incorporated (MA) is a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. 

The company increased its quarterly dividends by 15.15% to $0.76/share. This is the 14th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 26.93%.

The company managed to grow earnings from $3.10/share in 2014 to $11.86/share in 2023.

The company is expected to earn $14.48/share in 2024. 

The stock sells for 36.45 times forward earnings and yields 0.60%.

Norwood Financial Corp. (NWFL) operates as the bank holding company for Wayne Bank that provides various banking products and services.

The company raised quarterly dividends by 3.30% to $0.31/share. This is the 27th year of annual dividend increases for this dividend champion. Over the past decade, the company has managed to grow dividends at an annualized rate of 4.29%.

The company managed to grow earnings from $1.04/share in 2014 to $2.08/share in 2023.

The stock sells for 17.60 times earnings and yields 4.43%

Pentair plc (PNR) provides various water solutions in the United States, Western Europe, China, Eastern Europe, Latin America, the Middle East, Southeast Asia, Australia, Canada, and Japan. The company operates through three segments: Flow, Water Solutions, and Pool.

The company raised quarterly dividends by 8.70% to $0.25/share. This is the 48th year of annual dividend increases for this dividend champion. Over the past decade, the company has managed to grow dividends at an annualized rate of 3.16%.

The company managed to grow earnings from $1.13/share in 2014 to $3.77/share in 2023.

The company is expected to earn $4.28/share in 2024.

The stock sells for 23.84 times earnings and yields 0.98%

ServisFirst Bancshares, Inc. (SFBS) operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. 

The company raised its quarterly dividends by 11.67% to $0.335/share. This is the 11th consecutive annual dividend increase for this dividend achiever.  The company has managed to raise dividends at an annualized rate of 14.87% over the past five years. 

Between 2014 and 2023, the company managed to grow earnigns from $1.09/share to $3.80/share. The company is expected to earn $4.09/share in 2024.

The stock is selling for 21 times forward earnings and yields 1.56%.

Waste Management, Inc. (WM) engages in the provision of environmental solutions to residential, commercial, industrial, and municipal customers in the United States and Canada.

The company raised quarterly dividends by 10% to $0.825/share. This marked the 21st consecutive annual dividend increase for this dividend achiever. During the past decade, the comapny has managed to grow dividends at an annualized rate of 6.73%. 

The company managed to grow earnings from $2.81/share in 2014 to $5.69/share in 2023.

The company is expected to earn $7.32/share in 2024.

The stock sells for 28 times forward earnings and yields 1.60%.

Relevant Articles:

- Twenty Companies Spreading Holiday Cheers To Shareholders

- Ten Dividend Growth Stocks Raising Dividends

- 17 Dividend Growth Stocks Rewarding Owners With A Raise

- Twenty Dividend Cash Machines Hiking Dividends Last Week

The Gift That Keeps On Giving

We just had Black Friday and Cyber Monday. The Holiday Season is approaching. Everyone is rushing to buy gifts to the people that are most important to them. An expensive gift shows appreciation, and your love for the other person.

At least that’s what the marketing departments at some of the worlds largest companies have convinced us to believe.

People rush to overcrowded stores, and scour the internet for great shopping and gift ideas. I am guilty of that as well, as I bravely ventured to the parking lots of Target and Bed Bath and Beyond. I also set foot in the stores. Perhaps I even dared to buy a few things.

At the end of the day, everyone gets more stuff, filling our basements, landfills, storage units.
Parents usually feel the pressure to provide that exciting gift for their child, which is promising to develop them, entertain them and teach them important lessons. Kids will play with the toys for a while, until they end up gathering dust in a basement or just thrown in the trash.

I have come to the conclusion that no one will remember your gift ten or twenty years down the road. It is very rare that this gift will be a life changing event.

I believe that the best gift to provide to others is the gift of stock. I think that the best gift should be buying quality dividend paying stocks to recipients.

The gift recipient will receive dividends for decades. Every time they receive a new dividend check, and every time that dividend check increases with dividend growth, they will think fondly of the person that gave them that stock.

For example, if your great grandfather bought just one share of Coca-Cola stock in 1919 for $40,and reinvested those dividends, he would have left an estate worth $21 million today from just that one investment. This investment would generate close to $50,000 in monthly dividend income, which has increased for 60 years in a row.

I believe that the best holiday gift is the one that keeps on giving. This is why I prefer providing the gift of stock to the people closest to me. Namely, my offspring.

I still do actual presents, but I supplement them with a deposit and an investment in an investment account in their name. Time is the most valuable asset that a young person has. The ability to sit on an investment made at a young age, and then compound it for many decades is very helpful in accumulating wealth.

There are many ways to give the gift of stock. I would focus on the cheapest ways, and look for ways to minimize fees and costs as much as possible. There are a myriad options to accomplish this. Each will be available to you depending on your individual circumstances. However, the optimal one will vary from person to person, which is why I would encourage you to speak with a CPA, particularly if these options seem overwhelming.

One way of giving stock as a gift is by opening a custodial account. You control the stock as the adult, and the child becomes its owner at the age of 18 or 21 ( depending on your state). This is as simple as opening a new brokerage account. 

There may be tax implications however.

For 2025,  the first $1,350 in qualified dividends are not taxable. 

The next $1,350 is the child's marginal tax rate. 

Anything above $2,700 is taxed at the parents' marginal tax rate.

The tax rates on dividend and capital gains income for minors are more onerous than the dividends and capital gains rates for their parents. 

Taxes can become more complicated if the child has earned income too. I'd touch base with a CPA/Tax Advisor to address any specific situations.

Fidelity and Schwab have interesting information on the Kiddie tax. They also refer you to IRS publication 929. It's excellent bed time reading.

Depending on your individual circumstances, and if you do not want to deal with stepping on to the kiddie tax, it may make sense to just open an account in your name. You can then keep the funds in your name, but mentally earmark it for the benefit of the child. At a certain point in time, you may decide to transfer the stock as gift to the younger person. Brokerages like Fidelity can easily accommodate these requests, but may charge a small fee for it. You also need to pay attention to the gift tax. Right now, all you need to know is that a gift of up to $15,000 that you make to someone is not subject to a gift tax. If you are married, each partner can donate securities worth $15,000, for a total of $30,000. The recipient gets your cost basis in the stock.

When the young person inherits the stock from you, their cost basis will be the price of the security at the date of your death. That’s the third way of getting the gift of stock, but it is the worst way for the person who makes the gift of stock.

A fourth way to give the gift of stock is by using designated tax-deferred accounts. If the minor has some earned income, you can let them spend it or do with it as they please. You can then go ahead and put the same amount as their earned income in a Roth IRA. You are then free to invest in anything you want, without worrying about taxes. The money will compound tax-free for decades.

Alternatively, you can put the money in a 529 plan or an Educational Savings Account. There are limits to how much you can invest in each account, and the money has to be used for certain purposes. I do not like the restrictive nature of these accounts, the taxes and fees if the money is withdrawn and not used for education. I also dislike the fees on the 529 accounts in general. There are limits in 529 accounts to what you can invest the money in. For educational savings account, the money has to be disbursed by the recipient’s 30th birthday.

The last way is the most common way for richer individuals to gift stock to their beneficiaries. It involves setting up a trust fund, whose sole purpose is to hold the stock for the beneficiary. The trust fund disburses dividends, interest and income to the beneficiary, but usually is a separate legal entity. This provides protection to the trust assets, and the beneficiary gets to enjoy a stream of income over their lifetime. Trust and estate is a very complex matter, which will not be explained by a single blog article. The biggest advantage of a properly structured trust is that it eliminates the estate tax for the wealthy individual, while also showering their offspring with rising dividends for decades to come. That’s what the Rockefeller family has done in a nutshell. You definitely need to engage a qualified professional, or a team of professionals, before even thinking about starting a trust fund. If the Rockefellers can teach us anything, it’s that a proper trust fund planning can provide for several generations.

Today, we discussed gifting dividend stocks as presents, rather than spending the money on gifts that no one will remember in a decade or two. Dividend stocks are the gift that keeps on giving, as they will provide dividend income for decades to the recipient. There are different ways to accomplish this task, which can be used as tools to do what is necessary in order to give the gift that keeps on giving.

Relevant Articles:

- Stockpile Brokerage Review
- Five Stocks Delivering the Gift that Keeps on Giving
- How to turn $40 into $18 million
- Roth IRA’s for Dividend Investors

Twenty Companies Spreading Holiday Cheers To Shareholders

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:

Company Name	Ticker	New Dividend	Previous Dividend	Dividend Increase	Consecutive Annual Dividend Increases	Annualized Dividend Growth Last 5 years	Forward P/E	Dividend Yield
Abbott Laboratories	ABT	0.59	0.55	7.27%	53	12.74%	24.25	2.08%
Amgen Inc.	AMGN	2.38	2.25	5.78%	13	10.04%	13.82	3.52%
Alexandria Real Estate Equities, Inc.	ARE	1.32	1.3	1.54%	14	6.01%	10.85	5.14%
Broadcom Inc.	AVGO	0.59	0.53	11.32%	14	19.25%	36.07	1.05%
Balchem Corporation	BCPC	0.87	0.79	10.13%	16	11.07%	40.35	1.98%
Bristol-Myers Squibb Company	BMY	0.62	0.6	3.33%	16	7.34%	61.34	4.45%
Edison International	EIX	0.8275	0.78	6.09%	21	4.04%	16.58	4.04%
The Ensign Group, Inc.	ENSG	0.0625	0.06	4.17%	22	4.74%	25.94	0.18%
Erie Indemnity Company	ERIE	1.365	1.275	7.06%	34	7.21%	36.91	1.30%
Eli Lilly and Company	LLY	1.5	1.3	15.38%	10	14.97%	60	0.76%
Mid-America Apartment Communities, Inc.	MAA	1.515	1.47	3.06%	15	8.70%	17.77	3.85%
Mondelez International, Inc.	MDLZ	0.47	0.425	10.59%	12	11.42%	17.75	3.04%
Nucor Corporation	NUE	0.55	0.54	1.85%	52	6.06%	14.75	1.76%
Realty Income Corporation	O	0.264	0.2635	0.19%	30	3.01%	13.25	1.91%
Pfizer Inc.	PFE	0.43	0.42	2.38%	14	3.82%	8.75	6.72%
SEI Investments Company	SEIC	0.49	0.46	6.52%	33	7.47%	19.55	1.14%
Stryker Corporation	SYK	0.84	0.8	5.00%	31	9.80%	31.07	0.90%
The Toro Company	TTC	0.38	0.36	5.56%	16	11.20%	21.2	1.72%
WD-40 Company	WDFC	0.94	0.88	6.82%	15	8.98%	49.77	1.41%
Zoetis Inc.	ZTS	0.5	0.43	16.28%	11	24.37%	30.32	1.12%

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.

Also note that this list shows the dividend increase versus the last dividend payment. Some companies, like Realty Income for example, tend to raise dividends several times per year. Hence, while the new dividend payment looks like a very small raise versus the last dividend paid, year over year it is a more respectable 2.90%. This is where it is important to use this only as a starting point in your research. You need to crunch those numbers and follow the data when it comes to reviewing each company of potential interest.

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. 

For a sample review of Hormel Foods (HRL) check this out.

Of note this week to me at least was Abbott Laboratories press release, which celebrated the story of Grace Groner.

I have previously discussed the inspiring story of Grace Gronner, who turned $180 into a portfolio worth $7.2 Million, which generated close to $20,000 in monthly dividend income by the end.

As we celebrate 101 years of dividend payouts, we’re remembering one the earliest Abbott investing success stories, that of Grace Groner, who worked as a secretary at Abbott for over 40 years. In 1935, Groner bought three shares of Abbott stock for $60 each. She consistently reinvested her dividend payments and quietly amassed a $7.2 million fortune. Groner passed away in 2010, at the age of 100, and it was only then that her multi-million-dollar estate was discovered.

Groner left her entire estate to a foundation she had set up years before her death to fund internships, international study and service projects for students at her alma mater, Lake Forest College. Groner’s initial $180 investment in Abbott stock, compounded over the years by stock splits and dividend reinvestments, enabled her to leave a legacy that will live on for many years to come. Over the years, the Grace Elizabeth Groner Foundation has helped many college students pursue service-learning opportunities benefitting at least 25 Lake County, national and international non-profit organizations.

Source:  Press Release

Relevant Articles:

- Ten Dividend Growth Stocks Raising Dividends

- Seven Dividend Growth Companies Increase Dividends Last Week

- How Grace Groner Turned $180 in $7 Million by Investing in Dividend Growth Stocks

- The Powerful Concept of Covering Expenses With Dividends