Seven Dividend Growth Stocks Rewarding Shareholders With a Raise

I review the list of dividend increases every week as part of my monitoring process. It is very helpful to keep up with the world of dividend growth stocks by monitoring regular dividend increases. This helps me to see up and coming future dividend growth stars, monitor existing holdings and see it as an excuse to do a deeper analysis of fundamentals.

In my weekly reviews of dividend increases, I usually look for companies that have managed to boost dividends for at least a decade. For today's review, I am making an exception. There is a companies I like, which may be good fits for my dividend growth portfolio if they are ever available at attractive valuations. Everything else is consistent with my process for identifying, screening and researching individual investments.

Over the past week, the companies that raised dividends and met my criteria above include:

Seven Dividend Paying Companies Rewarding Shareholders With A Raise

As part of my monitoring process, I review the list of dividend increases every week. I typically focus on the companies that have at least a ten year streak of annual dividend increases. I then dig further by reviewing the trends in fundamentals over the past decade, in order to determine how safe is the dividend and whether the company is growing dividends on borrowed time. This occurs when management is expanding the dividend payout ratio, as it grows the dividend faster than earnings. In general, we want earnings and dividends to grow in lockstep. I also review valuation as part of my process. When I read the press releases announcing dividend increases, I also like to note what management says about rewarding shareholders with their excess cash. For the companies, whose executives were proud in discussing their dividend increases, I added a short citation.

The companies that raised dividends last week, that also met my criteria for inclusion for this article include:

Five Companies Committed to Increasing Returns To Shareholders

As part of my monitoring process, I review the list of dividend increases every week. I am able to monitor companies I own and those I may be considering owning at the right price. I find the rate of recent dividend increases to be very telling about management’s expectations for near term profitability growth. If they believe that their company is operating at a predictable rate, they are likely to consider growing the dividend close to the historical average annual rate of increase. If there is the expectation for a deceleration in profitability, we will see management growing their distribution’s at a much slower pace than before.

This is why I try to compare the most recent dividend increase relative to the ten year average. In order to get more context, I also review the historical trends in earnings per share along with the near term earnings expectations by Wall Street Analysts (which should be taken with a grain of salt of course).

Over the past week, there were several companies that announced dividend raises to their shareholders. After going through the press releases, I also included some comments from top executives, which should summarize their opinions on dividends. As usual, I focus on companies that have managed to increase dividends for at least a decade. I want companies that can pay and grow dividends throughout the economic cycle.

The companies include:

Evolution of the dividend kings list over the years

A dividend king is a company that has managed to reward shareholders with a dividend increase for at least 50 years in a row. This is no easy feat, as only 20 companies in the US have managed to achieve this regal status.

When I came up with the idea for the dividend king's list in 2010, there were only ten companies claiming this status. The prosperity of the 2010’s has led to an increase in the number of dividend kings. I have done some research on the dividend kings, as I like to look at historical data and play around in excel.

But history buffs like me have always wondered about the dividend kings of the olden days. I am always fascinated to learn about financial history.

After spending some time at a local library, I came up with a few books containing historical dividend records for the dividend achievers. The list of dividend achievers is not as comprehensive as the list of Dividend Champions, Contenders and Challengers. However, it is the best way to find information that is good enough.

The information covers the period of the 1990s and the early 2000s.

There was only one dividend king in 1994 – it was Winn Dixie with a 50 year record of annual dividend increases. The company remained the only dividend king in 1995, raising its record of annual dividend hikes to 51 years in a row.

Screening The Dividend Champions List For Bargains

I ran my screen against the list of dividend champions from June 2018, in order to identify bargains. The list of dividend champions includes companies that have managed to increase dividends to shareholders for at least 25 years in a row. The dividend champions list is more comprehensive than the list of dividend aristocrats, which is why I prefer to use it for my investing process.

The criteria used to screen the list of dividend champions are listed below:

1) A trailing P/E ratio below 20
2) A dividend payout ratio below 60%
3) A ten year dividend growth of at least 3%/year
4) A history of earnings growth over the past decade
5) A 25 year streak annual of dividend increases ( being a dividend champion meets this requirement automatically)

The process of screening is fairly straightforward.

The first step involves creating a portfolio in Yahoo Finance, which includes the dividend champions from the latest update.

The second step involves creating a custom view, which allows you to see the ratios that are most important for you. In my case, I look for price, prospective dividend and earnings. I used trailing earnings per share for this screen, but I usually use forward earnings in order to account for one-time accounting items distorting short-term results. For example, my screen excluded Becton Dickinson (BDX) since it was showing to be having negative earnings ( caused by one-time items). But a review using forward earnings would have included it for potential screening. Trailing earnings are automatically populated, but for some reason I have to manually look for forward earnings for each company individually, because their “Forward Earnings” column shows the earnings for the year after next year. This is way too forward for me.

Three Dividend Growth Stocks Rewarding Shareholders With A Raise

I review the list of dividend increases every week, as part of my monitoring process. This exercise is very helpful, as it allows me to view how the dividend is progressing relative the ten year average.

Dividend rates are set out by company’s boards of directors, after taking into consideration the outlook for the business environment, the needs of the business and the excess cashflow that is generated from it. I view the rate of dividend increases as a helpful tool that allows me to see the near term sentiment from the company’s top executives.

I focus my attention on companies with a ten year track record of annual increases, in order to weed out cyclical companies whose dividends are not as dependable. As dividend growth investors, we are after companies that will pay and grow dependable dividends even during recessions. As a result, this review excluded the dividend increases by financial companies such as Wells Fargo (WFC), J.P. Morgan (JPM) and Bank of America (BAC), since those companies broke their long records of annual dividend increases during the Global Financial Crisis of 2007 - 2009.

Over the past week, there were three notable companies that announced dividend hikes. The companies include:

Dividend Champions List For June 2018

As many of you know, the untimely death of David Fish left a void in many of us. His creation, the list of Dividend Champions, Contenders and Challengers provided an indispensable amount of information for dividend growth investors. It is unclear who will inherit those responsibilities. This was the best list for dividend investors, with a comprehensive number of companies and a wealth of data for further analysis.

But in the meantime, I came up with a nifty hack that could help each one to update the list quickly for themselves. I am not sure if I will be updating it on a monthly basis due to time commitments, but I can share with you how I will be updating the list for my use on a go forward basis.

To start, I focused only on the list of dividend champions and the dividend contenders which have increased dividends for 24 years in a row. The latter are prime candidates for future inclusion in the dividend champions list.

Second, I imported the list of dividend champions to create a custom portfolio in Yahoo Finance.

Third, I compared the dividend payment date from Yahoo to the data left from David Fish. For any increases, I updated the streak of dividend increases upwards. For any decreases – I dropped the stock from the list (there were none). I also reviewed the companies that seemed like they haven’t raised dividends for over a year. Those would likely be dropped from the list by the end of 2018.

There were two new additions to the Dividend Champions list. The first is Chubb (CB) and the second John Wiley (JW.A).

Fourth, I updated the trailing EPS number and deleted the columns I never use, such as Graham number and technical numbers. These are columns that I don’t use – perhaps you use them so in your process you should keep or expand upon them. I also updated the last price for June, which automatically updates the trailing P/E ratio, EPS Payout and the Dividend Yield.

Last, this process took a lot of time, because I did a few verifications that went beyond the process. As you know, I look at notable dividend increases on my site every week or so. The automatic process had failed to account for the increases in companies like H&P (HP) for example. I spent quite a lot of time verifying whether I am looking at genuine dividend increases, or just having bad data. Reviewing dividend history on Seeking Alpha was super helpful. It is one of my favorite dividend resources.

I have even more respect for the amount of work that Dave Fish did for all of us over the past decade by updating this list painstakingly. And never complaining about it either.

You can view the updated list of Dividend Champions as of June 29, 2018 by following this link.


You can download the file into spreadsheet format.

Alternatively, you can also download it from Dropbox from this link. ( and click Download)

Please share this post with your friends, so that they know about this update!

Relevant Articles:

- Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
- RIP David Fish
- 2018 Dividend Kings
- Dividend Aristocrats List for 2018