There were 62 dividend increases last week. Last week was the busiest week for dividend increases since February 2020. This was right before we went into a lockdown - perhaps two or three weeks prior to it.
Perhaps Corporate America believes that the worst is over in terms of economic activity. The pace of dividend increases shows me that management teams have a relatively optimistic view on near term business activity. I view dividend increases as an instant check on management near-term expectations.
I noticed this fact, as part of my monitoring process of reviewing dividend increases. I check the list of dividend increases to evaluate the performance of companies I already own and to identify companies for further research.
I focus my attention on companies with an established streak of annual dividend increases, in order to identify strong businesses that generate excess cash flows that grow over time. I usually look for companies that have managed to grow dividends for at least a decade.
Next, I review the most recent dividend increase to its historical trends, in order to determine if things are improving, decelerating or keeping pace. I also like to review the pace of dividend increases relative to earnings growth, in order to determine if distributions are growing on a solid ground. I also like to review the payout ratio, in order to determine dividend safety.
Last but not least, I review valuation. Valuation is not a formula - it is a combination of P/E, earnings growth, safety of the earnings stream on a relative basis for all other available investments.
I compiled the list of dividend growth stocks, which managed to increase dividends last month and also have at least a ten year history of annualized dividend increases:
One note for me is that Black Hills Corp (BKH) has managed to boost dividends for 50 years in a row, making it one of the newest additions to the list of dividend kings.
Just wanted to mention that this list is not a recommendation for you to buy or sell. It is just a list of companies that raised dividends last month. Each company has managed to grow dividends for at least a decade.
I discussed what I look at when evaluating companies at the beginning of the article
Relevant Articles:
- Eleven Companies Rewarding Shareholders With Regular Dividend Increases
- Three Companies Raising Dividends to Shareholders
- Eight Dividend Growth Stocks Rewarding Shareholders With a Raise
- Six Companies Demonstrating A Commitment to Shareholder Returns
