Ten Dividend Geese Laying Golden Eggs for Investors

As part of my monitoring process, I review the list of dividend increases every week. I use this exercise to review dividend increases for companies I own. I also use this exercise to observe dividend companies in action, and potentially uncover dividend gems for further research. I usually focus my attention on companies that have managed to boost distributions for at least a decade. I then take each company through my analysis checklist. The end result is a quick overview of several dividend growth stocks for your review.

The companies that raised dividends last week for this review include:

AptarGroup, Inc. (ATR) provides a range of packaging, dispensing, and sealing solutions primarily for the beauty, personal care, home care, prescription drug, consumer health care, injectable, and food and beverage markets. The company operates through three segments: Beauty + Home, Pharma, and Food + Beverage.

The company raised its quarterly dividends by 5.90% to 36 cents/share. This was the company’s 26th consecutive year of paying an increased dividend. The latest increase was slower than the ten year growth in dividends of 9%/year.

Annual earnings grew from $1.79/share in 2009 to $3/share in 2018. AptarGroup is expected to generate $4.28/share in 2019.

This dividend champion is overvalued at 25.30 times forward earnings. The stock yields 1.30%.

American Water Works Company, Inc. (AWK) provides water and wastewater services in the United States and Canada.

The company raised its quarterly dividend by 9.90% to 50 cents/share. This marked the eleventh year of annual dividend increases for this dividend achiever. Over the past decade, it has managed to boost dividends at an annual rate of 16.10%/year.

Between 2009 and 2018, American Water Works managed to grow earnings from a negative $1.39/share to a positive $3.15/share. The company is expected to generate $3.59/share in 2019.

The stock is overvalued today at 29.20 times forward earnings and yields 1.90%.

Bar Harbor Bankshares (BHB) operates as the holding company for Bar Harbor Bank & Trust that provides commercial, retail, and wealth management banking products and services.

The company raised its quarterly dividend by 10% to 22 cents/share. This marked the 16th year of annual dividend increases for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annual rate of 5.70%/year.

The bank grew earnings from $1.39/share in 2009 to $2.12/share in 2018.

The stock looks attractively valued at 12.40 times earnings and yields 3.30%. It is a good company to place on the list for further research.

Celanese Corporation (CE) is a technology and specialty materials company which manufactures and sells high performance engineered polymers in the United States and internationally. The company operates through Engineered Materials, Acetate Tow, and Acetyl Chain segments.

The company announced a 14.80% increase in its quarterly dividend to 62 cents/share. This event marked the tenth consecutive year of dividend increases for this newly minted dividend achiever. Over the past decade, Celanese has managed to boost dividends at a rate of 29.20%/year.

Between 2009 and 2018, the company has managed to grow earnings from $3.17/share to $8.91/share. Celanese is expected to generate $10.37/share in 2019.

The stock is attractively valued at 10.10 times forward earnings and yields 2.35%. This is a company that I would add to my list for further research.

Donegal Group Inc. (DGICA) (DGICB), is an insurance holding company, which provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through four segments: Investment Function, Personal Lines of Insurance, Commercial Lines of Insurance, and Investment in DFSC.
The company raised its dividend on A shares by 1.75% to 14.50 cents/share and the dividend on B shares by 2% to 12.75 cents/share. This marked the 17th year of annual dividend increases for this dividend achiever. The ten year dividend growth rate comes out to a 3.40% annualized.

Earnings per share went from 68 cents/share in 2009 to a loss of $1.18/share in 2018. The company is expected to earn 0.68/share in 2019.

The stock is selling at 18.60 times forward earnings and yields 4.60%. The forward payout ratio is at 85.30%. The yield is high, but the growth is low. The payout ratio looks like it is high as well. I will take a pass on Donegal for now.

ONEOK, Inc. (OKE) engages in the gathering, processing, storage, and transportation of natural gas in the United States. It operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments.

ONEOK raised its quarterly dividend to 86.50 cents/share. This is an 8.80% increase over the dividend paid during the same time last year. Over the past decade, this dividend achiever has managed to boost dividends at an annualized rate of 16.90%. It has a 17 year track record of annual dividend increases.

Between 2009 and 2018, the company’s earnings grew from $1.44/share to $2.78/share. ONEOK is expected to earn $2.98/share in 2019.

The stock is overvalued at 23.20 times forward earnings but offers a nice yield of 5%.

People's United Financial, Inc. (PBCT) operates as the bank holding company for People's United Bank, National Association that provides commercial banking, retail banking, and wealth management services to individual, corporate, and municipal customers. The company operates in two segments, Commercial Banking and Retail Banking.

The bank raised its quarterly dividend by 1.40% to 17.75 cents/share. This marked the 27th consecutive annual dividend increase for this dividend champion. Over the past decade, this dividend champion has managed to grow distributions at an annual rate of 1.80%/year.

Between 2008 and 2018, the bank grew earnings from 41 cents/share to $1.29/share. The company is expected to generate $1.41/share in 2019.

The stock is attractively priced at 12.10 times forward earnings and offers a forward dividend yield of 4.10%. Given the lack of dividend growth over the past decade, I am taking a pass on the company for the time being.

Sonoco Products Company (SON) manufactures and sells industrial and consumer packaging products in North and South America, Europe, Australia, and Asia. The company operates through four segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions.

The company raised its quarterly dividend by 4.90% to 43 cents/share. This marked the 37th year of annual dividend increases for this dividend champion. Over the past decade, Sonoco has been able to grow its dividends at an annual rate of 4.20%.

Sonoco managed to grow earnings from $1.50/share in 2009 to $3.10/share in 2018. The company is expected to earn $3.52/share in 2019.

The stock is fairly valued at 17.20 times forward earnings and offers a forward dividend yield of 2.80%.

The Southern Company (SO) engages in the generation, transmission, and distribution of electricity. It operates in four segments: Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services.

Last week, this utility managed to boost its quarterly dividend by 3.30% to 62 cents/share. This marked the 19th consecutive annual dividend increase for this dividend achiever. During the past decade, it has managed to boost distributions at an annualized rate of 3.65%.

Between 2009 and 2018, the company’s earnings went from $2.06/share to $2.17/share. Southern Company is expected to earn $3.03/share in 2019.

The stock seems fairly valued at 17.10 times forward earnings and offers a dividend yield of 4.80%. Given the lack of earnings growth over the past decade, I would mark the stock as a hold.

The Travelers Companies, Inc. (TRV) provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance.

The company boosted its quarterly dividend by 6.50% to 82 cents/share. This marked the 15th year of annual dividend increases for this dividend achiever. Over the past decade, this dividend achiever has managed to compound dividends at an annual rate of 9.80%.

Travelers has managed to boost earnings per share from $6.33 in 2009 to $9.28 in 2018. The company is expected to generate $11.07/share in 2019.

The stock is attractively valued at 12.60 times forward earnings and spots a dividend yield of 2.40%. Check my analysis of Travelers Companies for more information about the company.

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