Seven Companies Committed to Returning More Profits to Shareholders

Companies that grow dividends tend to have better financial health and produce sustained earnings and revenue growth. Dividends help identify well-managed companies; every dividend declaration represents a promise by management and a vote of confidence by the board of directors in the company's leadership. Companies that consistently raise their dividend payouts also raise the bar on their own performance expectations. These dividend increases show the longstanding commitment of returning capital to shareholders for these companies. These increases also provide evidence that companies are executing on their long-term business strategies.

Shares of dividend-paying companies possess built-in value that makes them generally more resilient in down markets, with solid appreciation potential during earnings-driven market upturns — with less price volatility.

I follow the list of dividend increases weekly as part of my dividend investing strategy. I try to approach investing from different points of view, in order to ensure that I can see emerging dividend success stories and monitor existing holdings.

Over the past week, there were several companies that raised their dividends to shareholders. I am listing below the ones which have managed to grow dividends over the past week and also have at least a ten year track record of annual dividend increases. The companies include:

Illinois Tool Works Inc. (ITW) manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products.

ITW’s Board of Directors approved a 7% increase in its quarterly dividend to $1.07/share. This marked the 45th consecutive year of annual dividend increases for this dividend champion. During the past decade, Illinois Tool Works has managed to grow investor dividends at an annualized rate of 11.30%.

Between 2008 and 2018, Illinois Tool Works has managed to grow earnings from $2.91/share to $7.60/share. The company is expected to generate $7.70/share in 2019.

The stock is close to fully valued at 19.60 times forward earnings and offers a current dividend yield of 2.80%. Check my analysis of Illinois Tool Works for more information about the company.

Dover Corporation (DOV) provides equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services worldwide. The company operates through three segments: Engineered Systems, Fluids, and Refrigeration & Food Equipment. $5.82/share in 2019

The Board of Directors of Dover increased its quarterly cash dividend by 2.10% to $0.49 per share. This is the 64th consecutive year in which this dividend king has increased its annual cash dividend. During the past decade, this dividend king has managed to grow distributions at an annualized rate of 9.70%.

Dover earned $3.24/share in 2008 and is expected to grow profits to $5.82/share in 2019.
The stock is attractively valued at 16.20 times forward earnings and yields 2.10%. Given the slow rate of dividend increases, I view the stock as a hold.

Carlisle Companies Incorporated (CSL) operates as a diversified manufacturing company. It operates through four segments: Carlisle Construction Materials, Carlisle Interconnect Technologies, Carlisle Fluid Technologies, and Carlisle Brake & Friction.

The Board of Directors for Carlisle Companies increased the quarterly dividend by 25% to $0.50 per share. This dividend champion has increased its dividend for the 43rd consecutive year. The company has delivered an annualized 9.90% dividend growth over the past decade.

Carlisle Companies managed to earn $2.34/share in 2009 and is expected to generate $8.13/share in 2019.

The stock looks attractively valued at 17.20 times forward earnings and yields 1.40%. Carlisle is a company to add to my list for further research.

Reinsurance Group of America, Incorporated (RGA) engages in reinsurance business. The company’s Board of Directors increased its quarterly dividend by 17% to 70 cents/share. This marked the twelfth year of consecutive annual dividend increases for this dividend achiever. Reinsurance Group of America has delivered annualized dividend growth of 37.70% over the past decade.

Between 2009 and 2018, the company managed to grow earnings from $5.55/share to $11/share. The rapid dividend growth was aided by expanding the dividend payout ratio from a low base.
Reinsurance Group of America is expected to generate $13.14/share in 2019.

The stock looks fairly priced at 11.50 times forward earnings, but yields only 1.80%. That being said, it may be worth adding to my list for further research.

McKesson Corporation (MCK) provides pharmaceuticals and medical supplies in the United States and internationally. It operates in three segments: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions, and Medical-Surgical Solutions.

The company’s Board of Directors declared a 5% increase in the regular quarterly dividend to 41 cents per share. This marked the twelfth consecutive annual dividend increase for this dividend achiever. Over the past decade, this dividend achiever has managed to grow distributions at an annualized rate of 12.90%.

The company has managed to grow earnings from $2.32/share in 2009 to an estimated $14.24/share in 2019.

Right now McKesson is attractively valued at 10.40 times forward earnings and yields 1.10%. Drug distributors have been under pressure over the past four years. This could be a good time to place companies such as McKesson on the list for further research, given the low valuations.

The Scotts Miracle-Gro Company (SMG) manufactures, markets, and sells consumer lawn and garden products in the United States and internationally. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. The company’s Board of Directors approved a 5.40% increase in quarterly dividends to 58 cents/share. This marked the tenth consecutive annual dividend increase for this newly minted dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 15.80%.

The company has managed to grow earnings from $2.32/share in 2009 to an estimated $4.50/share in 2019.

The stock is overvalued at 24.40 times forward earnings and yields 2.10%. The company may be worth a second look if it dips below $90/share.

NewMarket Corporation (NEU) engages in the petroleum additives businesses. The company’s Board of Directors approved an 8.60% increase in its quarterly dividend to $1.90/share. This marked the 14th consecutive year of annual dividend increases. During the past decade, it has managed to grow distributions at an annualized rate of 24.20%.

Between 2009 and 2018, NewMarket has managed to boost earnings from $10.65/share to $20.34/share. The company is expected to generate $21.41/share in 2019.

The stock is overvalued at 21 times forward earnings and yields 1.70%.

Relevant Articles:

- Three Notable Dividend Increases To Consider
- Illinois Tool Works (ITW) Dividend Stock Analysis
- 2019 Dividend Kings List
- Dividend Achievers versus Dividend Contenders & Champions
- 2019 Dividend Champions List