I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing positions. I also helps me monitor the dividend growth investing universe for hidden gems.
This exercise also helps me showcase how I review companies quickly, in order to determine if they should be put on my list for futher research, or discarded.
Long-time readers know that I basically look at fundamentals and valuaton in unison. I require a long history of dividend increases as my first step to even look at a security.
Next I look at its earnings power, and observe whether earnings per share are growing. Without growth in earnings per share, future dividend growth and intrinsic value growth would be impossible. Lack of earnings per share growth also threatens the dividend safety as well.
You want to look at earnings per share, which is your ownership piece of the company. Some companies tend to buy back their own stock, hence it's also helpful to see the trends in shares outstanding over time.
Third, I look at trends in dividend payments over time. I want to see how the most recent dividend increase compares to the historical average. Dividends have a signaling power, because they show you changes in the business for the better or worse. Dividends are declared by the management after a careful evaluation of the business neeeds, the competitive environment and the economy. Therefore, it is no wonder that dividend increases tend to provide better than average signaling power as to what management expectaitons are.
Fourth, you want to evaluate the dividend payout ratio, in order to determine dividend safety. In general, the payout ratio should stay in a range, as dividend increases follow earnings growth. If dividend growth is achieved through paying out a higher portion of earnings, that may be a potential red flag to be aware of. A high payout ratio on its own is not always bad, although it does increase risk of a dividend cut during the next recession, even if the business has stable and recurring defensible cashflows.
Last but not least, you want to look at the valuation of the business. It is the culmination of research, and takes into consideration growth expectations, stability of the business, cyclicality of the business earnings stream, along with P/E ratios. It's a bunch of trade-offs, lumped together, to determine the best values today. You want to think about the sources of investment return, by lumping fundamentals and valuations together.
Anyways, over the past week, there were five companies that raised dividends and also have a minimum ten year streak of consecutive annual dividend increases. The companies include:
American Tower (AMT) is one of the largest global REITs. It is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of over 148,000 communications sites and a highly interconnected footprint of U.S. data center facilities.
The company raised quarterly dividends by 4.90% to $1.70/share. This is the 14th annual dividend increase for this dividend achiever. Over the past decade, the REIT has managed to grow distributions at an annualized rate of 16.70%.
FFO/share has increased from $4.10 in 2015 to $11.18 in 2025.
The REIT is expected to generate FFO/share of $9.75.
The stock sells for 21.80 times FFO and has a dividend yield of 3.20%.
Best Buy Co., Inc. engages in the retail of technology products in the United States, Canada, and international.
The company eked out a 1.10% increase in its quarterly dividends to $0.95/share. This is the 21st consecutive annual dividend increase for this dividend achiever. Over the past decade, the company managed to grow dividends at an annualized rate of 17.90%.
The company grew earnings from $2.59/share in 2015 to a high of $9.94/share in 2021, but then EPS fell to $4.31/share in 2024. The company is expected to earn $6.36/share in 2025.
The stock sells for 12.50 times forward earnings and yields 4.80%.
General Dynamics Corporation (GD) operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies.
The company raised quarterly dividends by 5.60% to $1.50/share. This is the 28th consecutive annual dividend increase for this dividend aristocrat. Over the past decade, the company has managed to grow dividends at an annualized rate of 8.70%.
The company grew earnings from $9.45/share in 2015 to $13.81/share in 2024.
The company is expected to earn $14.84/share in 2025.
The stock sells for 18.30 times forward earnings and has a dividend yield of 2.20%.
Horace Mann Educators Corporation (HMN) operates as an insurance holding company in the United States. It operates through Property & Casualty, Life & Retirement, and Supplemental & Group Benefits segments.
The company increased its quarterly dividend by 3% to $0.35/share. This is the 17th consecutive year the Board has increased the annual shareholder cash dividend, reflecting Horace Mann’s commitment to long-term shareholder value creation. Over the past decade, the company has increased dividends at an annualized rate of 4%.
Between 2015 and 2024, the company's earnings grew from $2.23/share to $2.49/share, with some volatility in between.
The company is expected to earn $3.82/share in 2025.
The stock sells for 10.90 times forward earnings and yields 3.35%.
Kadant Inc. (KAI) supplies technologies and engineered systems worldwide. It operates in three segments: Flow Control, Industrial Processing, and Material Handling.
The company raised quarterly dividends by 6.30% to $0.34/share. This is the 12th year of consecutive annual dividend increase for this dividend achiever. Over the past decade, the company managed to raise dividends at an annualized rate of 8.10%.
Between 2015 and 2024, the company managed to grow earnings from $3.16/share to $9.51/share.
The company is expected to earn $9.94/share in 2025.
The stock sells for 37.80 times forward earnings and yields 0.36%.
Relevant Articles:
- On dividends and stock price fluctuations
- How I quickly review companies
