14 Dividend Growth Stocks Rewarding Shareholders With a Raise

Every week I go through the list of dividend increases, as part of my monitoring process. I monitor the dividend increases from companies I own, and for companies I may be interested in the future. I find it helpful to see companies that I have bought almost a decade ago, still delivering consistent annual increases. I also find it helpful to observe companies that have raised dividends for at least a decade. The rate of dividend increases shows how confident company executives are of near term business conditions. It may be worth taking a second look at these companies, in order to determine suitability for the income investor's portfolio.

Over the past week, there were 14 companies with a long streak of annual dividend increases, which raised dividends to their shareholders. The companies include:

Hormel Foods (HRL) Dividend Stock Analysis

Hormel Foods Corporation (HRL) produces and markets various meat and food products worldwide. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other.

The company is a dividend king which has managed to increase annual dividends for 51 years in a row. There are only twenty dividend kings in the world, which have each managed to boost annual dividends every single year for at least half a century.

Hormel’s last dividend increase was in November 2016 when the Board of Directors approved a 17.20% increase in the quarterly distribution to 17 cents/share.

Hormel’s largest competitors include Tyson Foods (TSN), Conagra Foods (CAG), General Mills (GIS), Campbell Soup (CPB) and J.M. Smucker (SJM).

Over the past decade this dividend growth stock has delivered an annualized total return of 16.10% to its shareholders.

Six Dividend Growth Stocks Raising Dividends Like Clockwork

There were several companies over the past week, which raised dividends to shareholders. I isolated six of those companies, which have managed to increase dividends for at least a decade.

In general, I look for companies that:

1) Have raised dividends for at least a decade
2) Have managed to grow earnings per share over the past decade
3) Are available at attractive valuations

This is a quick and dirty method that I use to determine if a company is worthy of further research or whether I should throw it away from further consideration.

This is a qualitative characteristic which is important, because only a certain type of business will have the dependability to manage to grow dividends per share every single year for at least a decade. I then try to analyze further whether dividend hikes were supported by growth in earnings per share over the past decade. I do this in order to determine if this dividend growth was supported by growth in fundamentals, rather than by merely increasing the dividend payout ratio. After a company that passes this test, I check if it has an attractive valuation. Otherwise, I may place an alert if the stock price falls below a certain level. If the stock is attractively valued, I will analyze it and determine if it is a buy.

The companies include:

Nine Dividend Investing Lessons Learned From Nine Years of Blogging

Today marks the ninth birthday of the Dividend Growth Investor blog. It is unreal that I have managed to keep this up for 9 years in a row. There have been more than 1,600 articles published during that time. I wanted to thank you all for reading along the way, through the ups and downs.

Today, I wanted to share nine lessons that I have learned about successful investing over the past nine years. Those were learned from personal experience, through my interactions with readers and through observations of other investors.

1) Diversification matters.

Diversification is the only free lunch out there. This means holding as little as 40 – 50 individual companies from as many sectors as possible. Diversifying over time helps build the discipline to allocate money in the best ideas every single month. By slowly building out a dividend machine over time, you will end up with a portfolio that is well diversified, since different companies and sectors are available at different points of each economic cycle. Having some allocation to fixed income in retirement could be helpful as well, though not as helpful in the accumulation phase.

My Goals for 2017 and after

Another year has passed here in dividend growth investing land. This was a year with a lot of changes for me. It is time to evaluate what happened, and see if we can learn anything from all of this.
Before I write things down, I want to let you know that I actually try to focus my efforts on building systems rather than goals. In other words, I believe that focusing my energy on those five items within my control will ultimately lead to me to my ultimate goal of living off dividends in retirement:

1) Growing my income
2) Saving as much as possible
3) Investing wisely, without overpaying for investments
4) Keeping investment and tax costs low
5) Remaining patient ( not chasing yield, not overpaying, not churning my portfolio)

I believe that by focusing too much on earning a certain dividend income in a certain year I am pressuring myself to do things for the sake of doing things. This is an example of short-term thinking, which I try to discourage on this blog. I am all for long-term dividend investing, not chasing short term targets. I would rather pursue only good opportunities that would result in a lifetime of sustainable dividend income instead.

Medtronic (MDT) Dividend Stock Analysis

Medtronic, Inc. (MDT) manufactures and sells device-based medical therapies worldwide. This dividend champion has paid dividends since 1977 and increased them for 39 years in a row.

The company’s last dividend increase was in June 2016 when the Board of Directors approved a 13.10% increase to 43 cents/share. The company’s largest competitors include Baxter (BAX), Becton Dickinson (BDX) and St Jude Medical (STJ).

Over the past decade this dividend growth stock has delivered an annualized total return of 5% to its shareholders.

Two Wide Moat Dividend Stocks to Consider on Dips

I like to invest in quality companies, with an established track record of dividend increases. I want to acquire these quality companies at an attractive entry price, and then see earnings per share, dividends per share and intrinsic values grow over time.

The beauty of quality companies is that you need to get one decision right – that is the ability to identify their business model, and then buy those companies in the first place without overpaying for them.

I do not want to worry about buying at a low price, and then selling at a high price. I want to make one decision, and then let these quality companies do the heavy lifting for me. My favorite holding period is forever. While some may fail, I know that by building a diversified portfolio of dividend growth stocks, I will do just fine over time.

Speaking of quality companies, there are two ones that are beginning to look attractively valued.

S&P Global, Inc. (SPGI) provides independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. The company operates through S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices, and S&P Global Platts divisions.

The company is a member of the dividend champions index, and has managed to increase dividends for 43 years in a row. Over the past decade, S&P Global has managed to boost dividends at a rate of 7.20%/year. Earnings per share grew from $2.40 in 2006 to $4.21 in 2015. The company is expected to earn $5.27/share in 2016 and $5.83/share in 2017. I find the stock attractive on dips below $105 - $106/share.

Moody’s Corporation (MCO) provides credit ratings; and credit, capital markets, and economic related research, data, and analytical tools worldwide. It operates through two segments, Moody’s Investors Service and Moody’s Analytics.

The company is a member of the dividend contenders index, and has managed to increase dividends for 8 years in a row. Over the past decade, Moody’s has managed to boost dividends at a rate of 21%/year. Earnings per share grew from $2.58 in 2006 to $4.63 in 2015. The company is expected to earn $4.71/share in 2016 and $5.11/share in 2017. I find the stock attractive on dips below $94/share.

Both companies are market leaders in the market for credit ratings. Anyone who wants to sell debt, may have to pay for a credit evaluation from one of those two industry leaders ( with Fitch being third largest). Moody’s & Standard & Poors are essentially a duopoly, which charges a toll for anyone who wants to access credit markets. So both companies have a strong competitive position.

I also like that S&P Global has a strong line-up of widely followed indices, which can generate a lot of fees in the future, especially as everyone around is becoming an index investor.


Relevant Articles:

- Buying Quality Companies at a Reasonable Price is Very Important
- Market Declines: An Opportunity to Acquire Quality Dividend Stocks
- Diversified Dividend Portfolios – Don’t forget about quality
- Dividend investing timeframes- what's your holding period?
- Give your investments time to compound

Three Of My Favorite Dividend Stocks For 2017

This guest post has been written by Mike McNeil, passionate investor, founder of Dividend Stocks Rock and author of The Dividend Guy Blog.

In the beginning of this New Year, many investors review their portfolios. We all hope for a good year on the market and, most importantly, steady dividend growth increase among our portfolio. I selected three companies I think will perform well in 2017 and will increase their dividend payouts.

3M (MMM)

Business model:

3M (MMM) produces products like Scotch tape, projector systems, Post-it notes, Tartan track, and Thinsulate. This is a conglomerate that produces products for many industries and for both personal and business use, and their manufacturing, research, and sales offices are all over the world.

17 Quality Dividend Stocks For 2017 ( and after)

One of the advantages of being a dividend investor is that I invest in businesses that meet a certain qualitative and quantitative criteria. This allows me to focus on quality compounding machines with established track records. This discipline also allows me to avoid overpaying for those companies. Even the best company in the world is not worth overpaying for. The third trait I have is patience - I am willing to sit on a stock for years, which reduces transaction costs and lets me take advantage of the maximum power of long-term compounding.

While everyone is complaining that the stock market is “high”, I went ahead and started looking for companies that are attractively valued today. I think that the following companies are worthy of being considered for your further research. The companies include: