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:


Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, electronics and performance materials, equipment, and services worldwide. This dividend champion raised its quarterly dividends by 10.50% to 95 cents/share. This marked the 35th consecutive annual dividend increase for Air Products and Chemicals. Over the past decade, the company has managed to increase its dividends at a rate of 9.90%/year. Earnings per share have increased from $4.67 in 2007 to an estimated $6.39/share for 2017. Currently, the stock is overvalued at 22.20 times forward earnings and yields 2.70%. Since I already have a sizeable position in this company already, I would not be interested even at a P/E below 20. But in general, I like the recurring nature of the business, and the strong relationship with clients. Check my analysis of APD for more information.

Parker-Hannifin Corporation (PH) manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates in two segments, Diversified Industrial and Aerospace Systems. This dividend king raised its quarterly dividends by 4.80% to 66 cents/share. This marked the 61th consecutive annual dividend increase Parker-Hannifin Corporation. PH fiscal year is at June 30, which is how ”annual” dividend payments are calculated in this case. If you look at calendar year 12/31, you get different results. Over the past decade, the company has managed to increase its dividends at a rate of 16%/year. Earnings per share have increased from $4.67 in 2007 to an estimated $6.83/share for 2017. Currently, the stock is selling at 21.80 times forward earnings and yields 1.80%. I may need to put it on my list for further research.

Polaris Industries Inc. (PII), together with its subsidiaries, designs, engineers, manufactures, and markets off-road vehicles, snowmobiles, motorcycles, and on-road vehicles in the United States, Canada, Western Europe, Australia, and Mexico. It operates through three segments: Off-Road Vehicles (ORVs)/Snowmobiles, Motorcycles, and Global Adjacent Markets. This dividend contender raised its quarterly dividends by 5.50% to 58 cents/share. This marked the 22nd consecutive annual dividend increase for Polaris Industries. Over the past decade, the company has managed to increase its dividends at a rate of 14.20%/year. Earnings per share have increased from $1.29/share in 2006 to an estimated $4.49/share for 2017. Currently, the stock is selling at 19.30 times forward earnings and yields 2.70%. I would put it on my list for further research.

Black Hills Corporation (BKH), through its subsidiaries, operates as a diversified energy company in the United States. This dividend champion raised its quarterly dividends by 6% to 44.50 cents/share. This marked the 48th consecutive annual dividend increase for Black Hills Corporation. Over the past decade, the company has managed to increase its dividends at a rate of 2.40%/year. Earnings per share have increased from $2.21/share in 2006 to an estimated $3.03/share for 2017. Currently, the stock is overvalued at 20.50 times forward earnings and yields 2.90%. I would be more interested in slow growing utilities at lower P/E ratios from here preferably in the 15 - 16 range, and yields of at least 4%.

J.B. Hunt Transport Services, Inc. (JBHT), together with its subsidiaries, provides surface transportation and delivery services in the continental United States, Canada, and Mexico. It operates through four segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), and Truck (JBT). This dividend contender raised its quarterly dividends by 4.50% to 23 cents/share. This marked the 14th consecutive annual dividend increase for J.B. Hunt Transport Services. Over the past decade, the company has managed to increase its dividends at a rate of 13.30%/year. Earnings per share have increased from $1.55/share in 2007 to an estimated $4.17/share for 2017. Currently, the stock is overvalued at 23.70 times forward earnings and yields 0.90%. I would be hesitant to buy into a cyclical transportation stock at more than 20 times earnings. I am impressed by the growth in earnings per share, and would add the stock on my list for further research.

California Water Service Group (CWT), through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii. This newly minted dividend king raised its quarterly dividends by 4.30% to 18 cents/share. This marked the 50th consecutive annual dividend increase for California Water Service Group. Over the past decade, the company has managed to increase its dividends at a rate of 1.60%/year. Earnings per share have increased from 67 cents/share in 2006 to an estimated 95 cents/share for 2017. Currently, the stock is overvalued at 36.60 times forward earnings and yields 2.10%. Given the slow rate of earning growth ( didn't even double over the past decade), the low yield, and the excessive P/E ratio, I would not touch the stock even with a ten foot poll.

Praxair, Inc. (PX) produces, sells, and distributes atmospheric, process, and specialty gases, as well as surface coatings in North America, Europe, South America, and Asia. This dividend contender raised its quarterly dividends by 5% to 78.75 cents/share. This marked the 24th consecutive annual dividend increase for Praxair. Over the past decade, the company has managed to increase its dividends at a rate of 11.60%/year. Earnings per share have increased from $3.62/share in 2007 to an estimated $5.85/share for 2017. Currently, the stock is overvalued at 20.50 times forward earnings and yields 2.60%. I would be interested in the company on dips below $117/share.

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. This dividend champion raised its quarterly dividends by 13.90% to 41 cents/share. This marked the 44th consecutive annual dividend increase for this quality dividend paying company. Over the past decade, S&P Global has managed to increase its dividends at a rate of 7.20%/year. Earnings per share have increased from $2.40/share in 2006 to an estimated $5.27/share for 2016. Currently, the shares of this quality company are overvalued at 22.80 times forward earnings and yields 1.40%. I would be interested in the stock on dips below $106/share.

Dominion Resources, Inc. (D) produces and transports energy in the United States. The company operates through three segments: Dominion Virginia Power (DVP), Dominion Generation, and Dominion Energy. This dividend contender raised its quarterly dividends by 7.90% to 75.50 cents/share. This marked the 14th consecutive annual dividend increase for Dominion Resources. Over the past decade, the company has managed to increase its dividends at a rate of 6.80%/year. Earnings per share have increased from $2.21/share in 2006 to an estimated $3.81/share for 2016. Currently, the stock is fully valued at 19.80 times forward earnings and yields 4%.  I need to refresh my last analysis.

Rollins, Inc. (ROL), through its subsidiaries, provides pest and termite control services to residential and commercial customers. This dividend contender raised its quarterly dividends by 15% to 11.50 cents/share. This marked the 15th consecutive annual dividend increase for Rollins. Over the past decade, the company has managed to increase its dividends at a rate of 18.40%/year. Earnings per share have increased from $0.25/share in 2006 to an estimated $0.86/share for 2016.  Currently, the stock is very overvalued at 41 times forward earnings and yields 1.30%. I really like the company, and its business model. Unfortunately, it would have to drop by half, before I would even consider it for my portfolio.

Kimberly-Clark Corporation (KMB), together with its subsidiaries, manufactures and markets personal care, consumer tissue, and professional products worldwide. This dividend champion raised its quarterly dividends by 5.40% to 97 cents/share. This marked the 45th consecutive annual dividend increase for this quality dividend paying company. Over the past decade, Kimberly-Clark has managed to increase its dividends at a rate of 7.60%/year. Earnings per share have increased from $4.09/share in 2007 to an estimated $6.29/share for 2017. Currently, the stock is close to being fully valued at 19.20 times forward earnings and yields 3.20%. Given the slowing growth in earnings per share, I am not interested in adding more shares at this valuation levels. I expect future dividend growth to be slower over the next decade.

A. O. Smith Corporation (AOS) manufactures and markets a range of water heaters, boilers, and other products for residential and commercial end markets in the United States, China, Canada, Europe, and India. This dividend contender raised its quarterly dividends by 16.70% to 14 cents/share. This marked the 14th consecutive annual dividend increase for A. O. Smith. Over the past decade, the company has managed to increase its dividends at a rate of 13.50%/year. Earnings per share have increased from $0.41/share in 2006 to an estimated $1.84/share for 2016. Currently, the stock is overvalued at 26.30 times forward earnings and yields 1.20%

Magellan Midstream Partners, L.P. (MMP) engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates through Refined Products, Crude Oil, and Marine Storage segments. This dividend contender raised its quarterly distributions to 85.50 cents/unit. This master limited partnership has raised distributions for 14 years in a row. Over the past decade, the partnership has managed to increase its distributions at a rate of 11.50%/year. Currently, the partnership yields 4.30%

Welltower Inc. (HCN) is an independent equity real estate investment trust which invests in senior living and health care properties. This dividend contender raised its quarterly dividends to 87 cents/share. This marked the 13th consecutive annual dividend increase for Welltower. Over the past decade, the company has managed to increase its dividends at a rate of 3%/year. Currently, the stock yields 5.30%.

Full Disclosure: Long APD, D, KMB,

Relevant Articles:

- Dividend Kings List for 2017
- Getting Started – The Hardest Part About Dividend Investing
- Two Wide Moat Dividend Stocks to Consider on Dips
- How to read my weekly dividend increase reports