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%.
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