I review the list of dividend increases every week, as part of my review process. I focus my attention on companies that raised dividends in the current week, and have at least a ten-year track record of annual dividend increases.
Only a company with a strong cash flow generating business can afford to grow dividends for a long period of time. Therefore, a business growing dividends for at least a decade is worth looking at for further research.
There were nine companies that fit the criteria. You can view the five companies in the table below:
Aflac Incorporated (AFL) provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The company raised its quarterly dividend by 17.86% to 33 cents/share. This marked the 38th consecutive annual dividend increase for this dividend aristocrat. During the past decade Aflac has managed to grow dividends at an annualized rate of 6.80%. Between 2009 and 2019, Aflac managed to boost earnings from $1.59/share to $4.43/share. Aflac is expected to generate $4.93/share in 2020. Right now the stock is attractively valued at 8.90 times forward earnings. Aflac yields 3%.
McCormick & Company Incorporated (MKC) manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. The company operates in two segments, Consumer and Flavor Solutions. The company hiked quarterly dividends by 9.68% to 68 cents/share, marking the 34th year of consecutive annual dividend increases for this dividend aristocrat. McCormick has managed to increase dividends at an annualized rate of 9.04% during the past decade. Between 2009 and 2019, McCormick has managed to grow earnings from $2.27/share to $5.24/share. The company is expected to earn $5.71/share in 2020. The stock is not cheap at 32.20 times forward earnings. McCormick yields 1.50%.
Brown-Forman Corporation (BF.B) manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages. The company raised its quarterly dividend by 3% to 17.93 cents/share. This marked the 37th year of annual dividend increases for this dividend aristocrat. During the past decade, Brown-Forman has managed to boost dividends at an annualized rate of 8%. Brown-Forman managed to grow earnings from 81 cents/share in 2010 to $1.72/share in 2020. The company expects to earn $1.92/share in 2021. The stock is overvalued at 41.50 times forward earnings and yields 0.90%.
NIKE, Inc. (NKE), designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. The company hiked its quarterly dividend by 12.24% to 27.50 cents/share, marking the 19th year of consecutive annual dividend increases. Nike has hiked dividends at an annualized rate of 13.195 over the past decade. Between 2009 and 2019, Nike managed to grow earnings from 76 cents/share to $1.60/share. Nike is expected to earn $2.86/share in 2020. The stock is overvalued at 46.50 times forward earnings and yields 0.80%.
First Financial Corporation (THFF) provides various financial services. It offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. The company hiked its semi-annual dividend by 1.90% to 53 cents/share. This marked the 32nd year of consecutive annual dividend increases for this dividend champion. Over the past decade, it has managed to grow distributions at an annualized rate of 1.36%. First Financial Indiana managed to increase earnings from $1.73/share in 2009 to $3.80/share in 2019. The company is expected to generate $3.65/share in 2020. The stock is cheap at 10.22 times forward earnings. The stock yields 2.85%.
Matthews International Corporation (MATW) provides brand solutions, memorialization products, and industrial technologies worldwide. The company hiked its quarterly dividend by 2.40% to 21.50 cents/share. This marked the 26th annual dividend increase for this dividend champion. Over the past decade, it has managed to hike distributions at an annualized rate of 11.80%. The company earned $1.90/share in 2009 and is expected to earn $2.90/share in 2019. The stock is fairly valued at 9.50 times forward earnings and offers a dividend yield of 3.10%.
American Equity Investment Life Holding Company (AEL) provides life insurance products and services in the United States. The company raised its annual dividend by 6.67% to 32 cents/share. This marked the 18th year of annual dividend increases for this dividend achiever. During the past decade, American Equity has managed to grow dividends at an annualized rate of 14.10%. The company grew earnings from $1.18/share in 2009 to $2.68/share in 2019. Analysts expect earnings to hit $2.86/share in 2020. The stock looks cheap at 9.50 times earnings. It yields a little over 1.15%.
Royal Gold, Inc. (RGLD), acquires and manages precious metal streams, royalties, and related interests. The company hiked its quarterly dividend by 7.14% to 30 cents/share, marking the 20th consecutive increase in its dividend. Royal Gold has a ten year annualized dividend growth rate of 12.72%. The company has managed to grow earnings from $1.07/share in 2009 to $3.03/share by 2019. Royal Gold is expected to earn $3.65/share in 2020. The stock is not cheap at 30.10 times forward earnings. It yields 1.10%.
Spire Inc. (SR) engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States. The company operates in two segments, Gas Utility and Gas Marketing. Spire hiked its quarterly dividend by 4.42% to 65 cents/share. This marked the 18th consecutive year of annual dividend increases for this dividend achiever. During the past decade, the company has managed to grow dividends at an annualized rate of 4.41!. The ten year rate is equivalent to the rate of the latest dividend increase, which is somethign you seldom see.