I review the list of dividend increases every week, as part of my monitoring process. This is a helpful step that helps me check for dividend increases for companies I own. I update my dividend portfolio spreadsheet with the new dividend rates, in order to see if my portfolio’s organic dividend growth rate is increasing above the rate of inflation.
I also use this process in order to identify hidden dividend gems for further research.
I started with the list of all dividend increases for the week, and then narrowed it down by focusing only on those companies that have managed to grow dividends for at least a decade. I came up with a list of nine companies for today’s review. The next step involves a brief analysis of each company, analysis of trends in earnings and dividends, followed by a brief take on valuation. The goal is to analyze not only historical dividend growth, but try to determine if it was supported by growth in fundamentals. It is helpful to evaluate the latest dividend hike against the historical dividend growth. We are looking for companies that grow earnings, grow dividends and grow intrinsic values over time. However, we also want to get those companies only if the valuation is right. Even the best company in the world is not worth overpaying for.
The nine dividend growth companies which raised dividends over the past decade include:
I am a long term buy and hold investor who focuses on dividend growth stocks
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Monday, January 29, 2018
Friday, January 26, 2018
Dividend Aristocrats for 2018 Revealed
The S&P Dividend Aristocrats index tracks companies in the S&P 500 that have increased dividends every year for at least 25 years in a row. The index is equally weighted, and rebalanced every quarter.
To qualify for membership in the S&P 500 Dividend Aristocrats index, a stock must satisfy the following criteria:
1. Be a member of the S&P 500
2. Have increased dividends every year for at least 25 consecutive years
3. Meet minimum float-adjusted market capitalization and liquidity requirements defined in the index inclusion and index exclusion rules below.
The group of companies in the Dividend Aristocrats index tend to generate reliable dividend income, and provide the potential for strong total returns. The list is well diversified across sectors.
There are 53 companies in the Dividend Aristocrats index, after the committee dropped C.R. Bard (BCR) from the list. The company is being acquired by Becton Dickinson (BDX).
The three new additions include Praxair (PX), A.O. Smith (AOS) and Roper Technologies (ROP)
The 2018 Dividend Aristocrats are listed below:
To qualify for membership in the S&P 500 Dividend Aristocrats index, a stock must satisfy the following criteria:
1. Be a member of the S&P 500
2. Have increased dividends every year for at least 25 consecutive years
3. Meet minimum float-adjusted market capitalization and liquidity requirements defined in the index inclusion and index exclusion rules below.
The group of companies in the Dividend Aristocrats index tend to generate reliable dividend income, and provide the potential for strong total returns. The list is well diversified across sectors.
There are 53 companies in the Dividend Aristocrats index, after the committee dropped C.R. Bard (BCR) from the list. The company is being acquired by Becton Dickinson (BDX).
The three new additions include Praxair (PX), A.O. Smith (AOS) and Roper Technologies (ROP)
The 2018 Dividend Aristocrats are listed below:
Thursday, January 25, 2018
Getting Started – The Hardest Part About Dividend Investing
Imagine you have a certain amount of cash in your possession, which you do not plan on using for say 10 – 20 years. Or imagine that you are just starting out, and have a small amount of cash that will be added to your savings account every month.
You decide to invest that amount. You have been reading about dividend investing, and think it sounds cool to be paid more dividends every year from the investments you made years ago.
However, you have an uneasy feeling – there is so much information out there, you get information overload and you cannot do anything as a result. Where do you start?
Not all dividend stocks are created equal. A company is not an automatic buy, just because it happens to pays a dividend. You need to develop some knowledge to develop a framework to evaluate companies, and then need to use that knowledge to select companies for long-term income for your diversified portfolio.
So how to gain the knowledge if you are a complete beginner? What steps should you take?
You decide to invest that amount. You have been reading about dividend investing, and think it sounds cool to be paid more dividends every year from the investments you made years ago.
However, you have an uneasy feeling – there is so much information out there, you get information overload and you cannot do anything as a result. Where do you start?
Not all dividend stocks are created equal. A company is not an automatic buy, just because it happens to pays a dividend. You need to develop some knowledge to develop a framework to evaluate companies, and then need to use that knowledge to select companies for long-term income for your diversified portfolio.
So how to gain the knowledge if you are a complete beginner? What steps should you take?
Monday, January 22, 2018
Ten Dividend Companies Rewarding Investors With A Raise
As part of my monitoring process, I review the list of dividend increases every week. I use this list to monitor dividend increases for any companies I own, along with any pertinent news. I ause this process in an effort to check the pulse of dividend growth stocks in general, and potentially uncover hidden values.
To come up with the list today, I looked at all dividend increases over the past week.
I tried to narrow the list down to companies that have raised dividends for at least a decade. I find it helpful to look at companies that have raised dividends for at least a decade, because this period covers a full economic cycle. This criteria also eliminates having to look at companies that achieved this streak of annual increases due to luck. A great company with a sustainable business model should be able to grow dividends for decades – therefore you do not need to buy it at the time it first initiates a dividend.
By focusing on the ten year requirement however, I excluded companies like Blackrock (BLK) from the group to discuss today. Perhaps, if they play their cards right, they will be featured next year.
I also included a short blurb about each company that fit the criteria from above, followed by pertinent information such as longevity of dividend increases and rate of annual dividend growth over the past decade. I find it helpful to review recent increases to the historical rate of dividend growth along. I also find it helpful to check whether the business is growing earnings per share, in order to determine if dividend growth is sustainable or it is running on fumes.
Last, but not least, I include a short evaluation on valuation. I look at P/E, growth in earnings and dividends, in order to come up with a rough idea whether I like a business or not. I believe that valuation is important. I look at the relationship between entry valuation and growth in determining fair value. This is how I determine if a company is worth researching further for my portfolio or not.
Without further ado, the companies that raised dividends over the past week include:
To come up with the list today, I looked at all dividend increases over the past week.
I tried to narrow the list down to companies that have raised dividends for at least a decade. I find it helpful to look at companies that have raised dividends for at least a decade, because this period covers a full economic cycle. This criteria also eliminates having to look at companies that achieved this streak of annual increases due to luck. A great company with a sustainable business model should be able to grow dividends for decades – therefore you do not need to buy it at the time it first initiates a dividend.
By focusing on the ten year requirement however, I excluded companies like Blackrock (BLK) from the group to discuss today. Perhaps, if they play their cards right, they will be featured next year.
I also included a short blurb about each company that fit the criteria from above, followed by pertinent information such as longevity of dividend increases and rate of annual dividend growth over the past decade. I find it helpful to review recent increases to the historical rate of dividend growth along. I also find it helpful to check whether the business is growing earnings per share, in order to determine if dividend growth is sustainable or it is running on fumes.
Last, but not least, I include a short evaluation on valuation. I look at P/E, growth in earnings and dividends, in order to come up with a rough idea whether I like a business or not. I believe that valuation is important. I look at the relationship between entry valuation and growth in determining fair value. This is how I determine if a company is worth researching further for my portfolio or not.
Without further ado, the companies that raised dividends over the past week include:
Tuesday, January 16, 2018
I Hit My Dividend Crossover Point
I wanted to share my exciting news with you today. I was going through my investments, and calculating my forward income and net worth numbers. After a little bit of adding things up, I came to the realization that I have exceeded my dividend crossover point in 2017. In other words, my forward dividend income from my taxable and tax – deferred accounts is set to meet or exceed my expenses.
I do not make monthly or quarterly updates like other blogs. The last update was probably in January of last year. Though a lot of readers liked this update from 2015. I wanted to share this with you, and illustrate that aggressive savings coupled with patient dividend growth investing works.
Long-term readers know that this is a substantial increase from my position a little over ten years ago. Back when I graduated college in 2007, I had only a couple of thousand dollars to my name.
I was extremely lucky that my parents paid for my first year of college. This is why I cannot say that all accomplishment is entirely mine, since I had a large dose of initial help. But I was also lucky that I worked several jobs during school and summer breaks in order to pay for my college and living expenses for three subsequent years. Therefore, I had zero dollars in debt when I graduated.
After finding a job in 2007, I steadily saved a large portion of my paycheck. I had no idea how to invest my money however. The only no-brainer thing I knew how to do was to put enough in a 401 (k) to get the company match, and enough to get to the stock ownership plan. The stock ownership plan offered a discount on company stock, which could be sold right away for an almost guaranteed profit.
I do not make monthly or quarterly updates like other blogs. The last update was probably in January of last year. Though a lot of readers liked this update from 2015. I wanted to share this with you, and illustrate that aggressive savings coupled with patient dividend growth investing works.
Long-term readers know that this is a substantial increase from my position a little over ten years ago. Back when I graduated college in 2007, I had only a couple of thousand dollars to my name.
I was extremely lucky that my parents paid for my first year of college. This is why I cannot say that all accomplishment is entirely mine, since I had a large dose of initial help. But I was also lucky that I worked several jobs during school and summer breaks in order to pay for my college and living expenses for three subsequent years. Therefore, I had zero dollars in debt when I graduated.
After finding a job in 2007, I steadily saved a large portion of my paycheck. I had no idea how to invest my money however. The only no-brainer thing I knew how to do was to put enough in a 401 (k) to get the company match, and enough to get to the stock ownership plan. The stock ownership plan offered a discount on company stock, which could be sold right away for an almost guaranteed profit.
Friday, January 12, 2018
Attractively Valued Dividend Contenders To Consider
Earlier this week, I shared with you a list of 24 dividend champions, which I believed to be worthy for further research. These companies are attractively valued, have each managed to grow distributions for at least a quarter of a century. In addition, their dividends are secure, being raised by dependable earnings growth.
Today, I am going to delve into the list of dividend contenders. A dividend contender is a company, which has managed to grow dividends for at least a decade (but far less than 25 years). There are currently 220 dividend contenders. If you add in the list of dividend champions, we have 335 companies in the US, which have managed to grow dividends every single year for at least a decade.
This is a solid starting point for any serious dividend investor, who is looking for a group of quality companies for further research.
To create the list I shared with you today, I went through the following process:
1) Obtained the list of dividend contenders from dripinvesting.org
2) Dump it into a Yahoo! Finance custom portfolio that I downloaded to excel.
3) Remove companies where trailing P/E ratio was below 20
4) Removed companies where the dividend payout ratio was above 60%
5) Added information for the 5 and 10 year annual dividend growth rates
As a result, I came up with 65 dividend contenders for further research.
Continue Reading >>>
Today, I am going to delve into the list of dividend contenders. A dividend contender is a company, which has managed to grow dividends for at least a decade (but far less than 25 years). There are currently 220 dividend contenders. If you add in the list of dividend champions, we have 335 companies in the US, which have managed to grow dividends every single year for at least a decade.
This is a solid starting point for any serious dividend investor, who is looking for a group of quality companies for further research.
To create the list I shared with you today, I went through the following process:
1) Obtained the list of dividend contenders from dripinvesting.org
2) Dump it into a Yahoo! Finance custom portfolio that I downloaded to excel.
3) Remove companies where trailing P/E ratio was below 20
4) Removed companies where the dividend payout ratio was above 60%
5) Added information for the 5 and 10 year annual dividend growth rates
As a result, I came up with 65 dividend contenders for further research.
Continue Reading >>>
Thursday, January 11, 2018
Attractively Valued Dividend Contenders To Consider
Earlier this week, I shared with you a list of 24 dividend champions, which I believed to be worthy for further research. These companies are attractively valued, have each managed to grow distributions for at least a quarter of a century. In addition, their dividends are secure, being raised by dependable earnings growth.
Today, I am going to delve into the list of dividend contenders. A dividend contender is a company, which has managed to grow dividends for at least a decade (but far less than 25 years). There are currently 220 dividend contenders. If you add in the list of dividend champions, we have 335 companies in the US, which have managed to grow dividends every single year for at least a decade.
This is a solid starting point for any serious dividend investor, who is looking for a group of quality companies for further research.
To create the list I shared with you today, I went through the following process:
1) Obtained the list of dividend contenders from dripinvesting.org
2) Dump it into a Yahoo! Finance custom portfolio that I downloaded to excel.
3) Remove companies where trailing P/E ratio was above 20
4) Removed companies where the dividend payout ratio was above 60%
5) Added information for the 5 and 10 year annual dividend growth rates
As a result, I came up with 65 dividend contenders for further research.
Today, I am going to delve into the list of dividend contenders. A dividend contender is a company, which has managed to grow dividends for at least a decade (but far less than 25 years). There are currently 220 dividend contenders. If you add in the list of dividend champions, we have 335 companies in the US, which have managed to grow dividends every single year for at least a decade.
This is a solid starting point for any serious dividend investor, who is looking for a group of quality companies for further research.
To create the list I shared with you today, I went through the following process:
1) Obtained the list of dividend contenders from dripinvesting.org
2) Dump it into a Yahoo! Finance custom portfolio that I downloaded to excel.
3) Remove companies where trailing P/E ratio was above 20
4) Removed companies where the dividend payout ratio was above 60%
5) Added information for the 5 and 10 year annual dividend growth rates
As a result, I came up with 65 dividend contenders for further research.
Wednesday, January 10, 2018
Profiles of Successful Dividend Investors
We all invest in dividend stocks in order to achieve financial independence. I find it very motivating to read the stories of long-term dividend investors, who started from modest beginnings and turned into multi-millionaires after decades of patiently compounding their wealth.
Back in early 2017 I posted a summary including the stories of several millionaire dividend investors:
The Most Successful Dividend Investors of all time
Another inspirational story appeared a few months ago:
This Is How This Successful Dividend Investor Turned $1,000 Into $2 Million
Yesterday, I read the story of a retired British teacher, who left a blue chip portfolio worth $9.5 million to charity at the time of his passing away in 2017. His name was Grahame Pincock, and he passed away at 90, leaving a portfolio in a trust to spend for charitable causes fighting ill health. Mr Pincock, was a principal teacher of languages before retiring.
Back in early 2017 I posted a summary including the stories of several millionaire dividend investors:
The Most Successful Dividend Investors of all time
Another inspirational story appeared a few months ago:
This Is How This Successful Dividend Investor Turned $1,000 Into $2 Million
Yesterday, I read the story of a retired British teacher, who left a blue chip portfolio worth $9.5 million to charity at the time of his passing away in 2017. His name was Grahame Pincock, and he passed away at 90, leaving a portfolio in a trust to spend for charitable causes fighting ill health. Mr Pincock, was a principal teacher of languages before retiring.
Monday, January 8, 2018
24 Dividend Stocks For 2018
I believe that the list of Dividend Champions, Contenders and Challengers is the most complete list of US dividend growth stocks available today. As part of my process, I screen the list of dividend champions regularly. I have a custom built portfolio in Yahoo! Finance, which includes all dividend champions. Using information from Yahoo Finance, Company Annual Reports and David Fish’s excellent site, I come up with all the data I need for my screening purposes.
In order to come up with a list of companies for further research, I used the following entry criteria:
1) A ten year minimum for annual dividend increases ( being a champion already helps in pre-qualifying this criteria)
2) Forward P/E ratio below 20
3) Dividend Payout Ratio below 60%
4) Companies that have managed to grow earnings per share over the past decade
5) Companies which have achieved a more than nominal dividend growth over the past decade
I applied those basic criteria on the Dividend Champions list, maintained by David Fish and came up with the following group of companies for further research:
In order to come up with a list of companies for further research, I used the following entry criteria:
1) A ten year minimum for annual dividend increases ( being a champion already helps in pre-qualifying this criteria)
2) Forward P/E ratio below 20
3) Dividend Payout Ratio below 60%
4) Companies that have managed to grow earnings per share over the past decade
5) Companies which have achieved a more than nominal dividend growth over the past decade
I applied those basic criteria on the Dividend Champions list, maintained by David Fish and came up with the following group of companies for further research:
|
Symbol |
Name |
Consecutive Years of
Annual Dividend Increases |
Dividend Yield |
Share Price |
Forward P/E |
Forward Dividend
Payout Ratio |
|
AFL |
AFLAC Inc. |
35 |
1.92% |
89.73 |
13.27 |
25.44% |
|
BDX |
Becton Dickinson &
Co. |
46 |
1.31% |
222.08 |
20.43 |
26.86% |
|
CBSH |
Commerce Bancshares |
49 |
1.52% |
56.09 |
20.32 |
30.80% |
|
CBU |
Community Bank System |
25 |
2.41% |
53.88 |
20.80 |
50.19% |
|
CPKF |
Chesapeake Financial
Shares |
26 |
1.27% |
30 |
14.56 |
18.45% |
|
CSVI |
Computer Services Inc. |
46 |
2.44% |
47.1 |
19.63 |
47.92% |
|
CTBI |
Community Trust Banc. |
37 |
2.70% |
47.75 |
16.93 |
45.74% |
|
EV |
Eaton Vance Corp. |
37 |
1.97% |
58.34 |
18.94 |
37.34% |
|
GD |
General Dynamics |
26 |
1.60% |
204.7 |
20.82 |
33.37% |
|
JNJ |
Johnson & Johnson |
55 |
2.31% |
141.71 |
19.47 |
45.05% |
|
LEG |
Leggett & Platt
Inc. |
46 |
2.92% |
47.9 |
19.31 |
56.45% |
|
LOW |
Lowe's Companies |
55 |
1.60% |
94.74 |
20.73 |
33.26% |
|
MDT |
Medtronic plc |
40 |
2.08% |
85.54 |
17.93 |
37.32% |
|
PNR |
Pentair Ltd. |
42 |
1.90% |
72.66 |
20.58 |
39.09% |
|
PPG |
PPG Industries Inc. |
46 |
1.39% |
118.92 |
20.19 |
28.01% |
|
RPM |
RPM International Inc. |
44 |
2.20% |
54.5 |
18.86 |
41.52% |
|
SCL |
Stepan Company |
50 |
1.03% |
79.41 |
18.30 |
18.89% |
|
SRCE |
1st Source Corp. |
30 |
1.47% |
50.4 |
19.53 |
28.68% |
|
THFF |
First Financial Corp. |
30 |
2.20% |
45.55 |
16.81 |
36.90% |
|
TMP |
Tompkins Financial
Corp. |
31 |
2.23% |
80.67 |
18.17 |
40.54% |
|
TROW |
T. Rowe Price Group |
31 |
2.10% |
107.23 |
17.90 |
37.56% |
|
UGI |
UGI Corp. |
30 |
2.04% |
47.55 |
18.79 |
38.34% |
|
UMBF |
UMB Financial Corp. |
26 |
1.42% |
71.95 |
19.71 |
27.95% |
|
WBA |
Walgreens Boots
Alliance Inc. |
42 |
2.08% |
72.92 |
13.07 |
27.24% |
These are not automatic buy recommendations by any shape or form. The intelligent dividend investor should use that screen only as a first step for their process. It is merely a step to narrow down a large list of companies down to a more manageable level.
The additional review should entail analyzing each company in more detail, and determining if the trends in earnings and dividends will continue into the future.
This evaluation is more art than science, and is highly subjective. Investing is an endeavor where two perfectly logical and rational individuals can have the same data, and still reach starkly different conclusions. After all, there is a buyer and a seller behind every stock transaction - and they both consider themselves smarter than the other party!
This decision is further complicated by existing stock holdings. For example, an investor who finds Walgreens Booth Alliance to be the best value on the list, may still refrain from investing in the company, if they already own too much of it.
I believe that success in dividend investing comes down to regular investing, and having a long-term buy and hold mindset. Most money is made by slowly building a diversified portfolio of quality companies by putting money to work every single month, and then sitting tight and letting the power of compounding do the heavy lifting for you.
What companies are you considering right now? Please feel free to write to me at dividendgrowthinvestor at gmail dot com
Relevant Articles:
- Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
- How to value dividend stocks
- How to become a successful dividend investor
- What I learned from analyzing my investment record
The additional review should entail analyzing each company in more detail, and determining if the trends in earnings and dividends will continue into the future.
This evaluation is more art than science, and is highly subjective. Investing is an endeavor where two perfectly logical and rational individuals can have the same data, and still reach starkly different conclusions. After all, there is a buyer and a seller behind every stock transaction - and they both consider themselves smarter than the other party!
This decision is further complicated by existing stock holdings. For example, an investor who finds Walgreens Booth Alliance to be the best value on the list, may still refrain from investing in the company, if they already own too much of it.
I believe that success in dividend investing comes down to regular investing, and having a long-term buy and hold mindset. Most money is made by slowly building a diversified portfolio of quality companies by putting money to work every single month, and then sitting tight and letting the power of compounding do the heavy lifting for you.
What companies are you considering right now? Please feel free to write to me at dividendgrowthinvestor at gmail dot com
Relevant Articles:
- Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
- How to value dividend stocks
- How to become a successful dividend investor
- What I learned from analyzing my investment record