Thirteen Companies Building Wealth For Long Term Shareholders

Dividend growth investing is a very simple but effective wealth building strategy. The investor focuses on companies with a proven track record of annual dividend increases, which typically exemplifies quality in a company. The next step involves focusing on those enterprises that grow earnings and are available at attractive valuations today.

The next step in the process is the most difficult one - doing absolutely nothing after assembling your portfolio of quality dividend growth stocks, while watching your dividend income rise year over year for decades. Most dividend investors who fail, succumb to short-term thinking because they listen to the useless noise out there. The dividend investors who succeed hold patiently to their diversified portfolios over time, and end up generating a lot of dividends for decisions made decades prior to that. I always like seeing how my dividend stocks are continuing their streak of annual dividend increases.

As part of my monitoring process, I review the list of dividend increases with at least a ten year streak. The companies that met the criteria are listed below, along with my comments:


T. Rowe Price Group, Inc. (TROW) is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. The company raised its quarterly dividend by 5.60% to 57 cents/share. This marked the 31st consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to increase annual dividends at a rate of 16.30%/year. The company managed to grow earnings per share from $2.40 in 2007 to $4.75 by 2016. T.Rowe is expected to earn $4.80/share in 2017. Currently, the stock is attractively value at 14.80 times forward earnings and yields 3.20%. Check my analysis of T. Rowe Price for more information about the company.

The Coca-Cola Company (KO), a beverage company, manufactures and distributes various nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. The Coca-Cola Company raised its quarterly dividend by 5.70% to 37 cents/share. This marked the 55th consecutive annual dividend increase for this dividend king. Over the past decade, the company has managed to increase annual dividends at a rate of 9%/year. The company managed to grow earnings per share from $1.08 in 2006 to $1.49 by 2016. The Coca-Cola Company is expected to earn $1.97/share in 2017. Currently, the stock is overvalued at 20.90 times forward earnings and yields 3.60%. Due to the overvaluation and the lack of earnings growth over the past five years I am not interested in buying shares of this company. Check my analysis of Coca-Cola for more information about the company.

National Health Investors Inc. (NHI) is a real estate investment trust that in the health care properties primarily in the long-term care and senior housing industries. This REIT raised its quarterly dividend by 5.60% to 95 cents/share. This marked the 15th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 6.50%/year. The company managed to grow funds from operations from $2.63 in 2009 to $5.25 by 2016. Currently, the stock is selling at 14.10 times FFO and yields 5.10%. It looks like an interesting high yield dividend portfolio idea to consider for further research.

Nu Skin Enterprises, Inc. (NUS) develops and distributes anti-aging personal care products and nutritional supplements under the Nu Skin and Pharmanex category brands worldwide. The company raised its quarterly dividend by 1.40% to 36 cents/share. This marked the 17th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 14.50%/year. The company managed to grow earnings per share from $0.47 in 2006 to $2.25 by 2015. Nu Skin Enterprises is expected to earn $2.90/share in 2017. Currently, the stock is at 16.30 times forward earnings and yields 3%. Due to the nature of the company’s business model, as discussed during the review of Nu Skin, I am going to give the company a pass at this time.

SCANA Corporation (SCG), through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity to retail and wholesale customers in South Carolina. The company raised its quarterly dividend by 6.50% to 61.25 cents/share. This marked the 17th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 3.50%/year. The company managed to grow earnings per share from $2.63 in 2006 to $4.16 by 2016. SCANA Corporation is expected to earn $4.22/share in 2017. Currently, the stock looks attractively valued at 15.60 times forward earnings and yields 3.70%. I would add it to my list for further research.

The Sherwin-Williams Company (SHW) develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers primarily in North and South America, the Caribbean, Europe, and Asia. The company operates in four segments: Paint Stores Group, Consumer Group, Global Finishes Group, and Latin America Coatings Group. The company raised its quarterly dividend by 1.20% to 85 cents/share. This marked the 39th consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to increase annual dividends at a rate of 12.60%/year. The company managed to grow earnings per share from $4.70 in 2007 to $11.99 by 2016. Sherwin-Williams Company is expected to earn $13.80/share in 2017. Currently, the stock overvalued is at 22.60 times forward earnings and yields 1.10%. It would be an interesting idea on dips below 276/share.

Analog Devices, Inc. (ADI) designs, manufactures, and markets a portfolio of solutions that leverage analog, mixed-signal, and digital signal processing technology, including integrated circuits (ICs), algorithms, software, and subsystems. The company raised its quarterly dividend by 7.10% to 45 cents/share. This marked the 15th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 16.10%/year. The company managed to grow earnings per share from $1.51 in 2007 to $2.76 by 2016. Analog Devices is expected to earn $3.39/share in 2017. Currently, the stock is overvalued at 24.30 times forward earnings and yields 2.20%.

Auburn National Bancorporation, Inc. (AUBN) operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company raised its quarterly dividend by 2.20% to 23 cents/share. This marked the 16th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 4.30%/year. The company managed to grow earnings per share from $1.74 in 2006 to $2.24 by 2016. Currently, the stock is attractively priced at 14.90 times forward earnings and yields 2.80%. I would add it to my list for further research.

Owens & Minor, Inc. (OMI), together with its subsidiaries, operates as a healthcare logistics company. It operates through two segments, Domestic and International. The company raised its quarterly dividend by 1% to 25.75 cents/share. This marked the 20th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 11.30%/year. The company managed to grow earnings per share from $1.19 in 2007 to $1.76 by 2016. Owens & Minor is expected to earn $1.96/share in 2017. Currently, the stock is attractively valued at 17.80 times forward earnings and yields 3%.I would add it to my list for further research.

Thomson Reuters Corporation (TRI) provides news and information for professional markets worldwide. The company sells electronic content and services to professionals primarily on a subscription basis. It operates through three business units: Financial & Risk, Legal, and Tax & Accounting. The company raised its quarterly dividend by 2% to 24.50 cents/share. This marked the 24th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 5.40%/year. The company’s earnings per share fell from $1.69 in 2007 to $1.34 by 2016. Thomson Reuters Corporation is expected to earn $1.74/share in 2017. Currently, the stock is overvalued at 25.80 times forward earnings and yields 3.10%. Given the lack of earnings growth over the past decade, and the high valuation, I am be interested in the company.

Jack Henry & Associates, Inc. (JKHY) provides technology solutions and payment processing services primarily for financial services organizations in the United States. The company raised its quarterly dividend by 10.70% to 31 cents/share. This marked the 27th consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to increase annual dividends at a rate of 18.70%/year. The company’s earnings per share fell from $1.14 in 2007 to $3.12 by 2016. Thomson Reuters Corporation is expected to earn $3.11/share in 2017. Currently, the stock is at 29.70 times forward earnings and yields 1.40%.

Buckeye Partners, L.P. (BPL) owns and operates liquid petroleum products pipeline systems in the United States. The company operates through three segments: Domestic Pipelines & Terminals, Global Marine Terminals, and Merchant Services. The company raised its quarterly distribution to $1.2375/share. This marked the 22th consecutive annual dividend increase for this dividend achiever. Over the past decade, Buckeye Partners has managed to increase annual dividends at a rate of 5.10%/year. Buckeye reported distribution coverage of 1.09 times for 2016 compared to 1.02 times in 2015. Currently, the partnership yields 6.90%.

Reynolds American Inc.(RAI), through its subsidiaries, manufactures, and sells cigarettes and other tobacco products in the United States. It operates through RJR Tobacco, Santa Fe, and American Snuff segments. The company raised its quarterly dividend by 10.90% to 51 cents/share. This marked the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase annual dividends at a rate of 10%/year. The company’s earnings per share rose from $1.11 in 2007 to $2.31 by 2016, excluding one-time items. Reynolds American is expected to earn $2.54/share in 2017. Currently, the stock is overvalued at 23.90 times forward earnings and yields 3.40%. The company is in talks to be acquired by British American Tobacco (BTI). The latter is a company I need to research further for potential addition to my dividend growth portfolio.

Full Disclosure: Long TROW, KO,

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