As part of my weekly review process, I monitor the list of dividend increases and focus on the companies with at least a ten year history of dividend increases. This process helps me to monitor existing positions, but also to identify companies for further research.
It is also a good reminder about the companies that I never pulled the trigger on, despite understanding them. As an investor, I get to learn from mistakes I make, and hopefully improve over time.
Over the past week, there were several companies that raised dividends. The companies with at least a ten year track record of annual dividend increases include:
The Procter & Gamble Company (PG) provides branded consumer packaged goods to consumers in North and Latin America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. It operates in five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care.
The company raised its quarterly dividend by 10% to 86.98 cents/share, as I reported earlier last week. This marked the 65th consecutive annual dividend increase for this dividend king.
The company managed to grow earnings from $3.93/share in 2011 to $4.96/share in 2020. It is expected to earn $5.68/share in 2021.
Over the past decade, this dividend king has managed to increase annual dividends at an annualized rate of 5.20%.
The stock is selling for 24.15 times forward earnings and yields 2.30%.
Artesian Resources Corporation (ARTNA) provides water, wastewater, and other services in Delaware, Maryland, and Pennsylvania.
Artesian Resources raised its quarterly dividend by 1.50% to 26.10 cents/share. This marks the 25th consecutive year that this dividend champion has increased dividends.
Over the past decade, this dividend champion has managed to increase annual dividends at an annualized rate of 2.90%.
The company managed to grow earnings from $0.83/share in 2011 to $1.79/share in 2020. It is expected to earn $1.85/share in 2021.
The stock is selling for 22.44 times forward earnings and yields 2.48%.
Costco Wholesale Corporation (COST) engages in the operation of membership warehouses
Costco raised its quarterly dividend by 12.90% to 79 cents/share. This marks the 17th consecutive year of dividend increases for this dividend achiever.
Over the past decade, this dividend achiever has managed to increase annual dividends at an annualized rate of 13.20%.
The company managed to grow earnings from $3.30/share in 2011 to $9.02/share in 2020. It is expected to earn $9.95/share in 2021.
The stock is selling for 37.05 times forward earnings and yields 0.76%.
Costco seems overvalued today, but it has also seemed overvalued for a long time as well. This has prevented me from buying into the stock. They do tend to distribute special dividends to shareholders, and Charlie Munger is an executive there. The company is very well-run, and I believe I understand the business well. The risk with paying 35 – 40 times forward earnings from the start is P/E compression. That’s when it takes a long period of time for the valuation to get back to normal, even if the business hums along nicely. You do not want to pay too much of a premium.
Between 1999 - 2010, Costco stock basically returned nothing due to P/E compressing from 50 to 20.
Earnings per share went from 87 cents in 1999 to $2.92 in 2010. Perhaps that's why they initiated a dividend in 2004 and started buying back stock in 2005. But other than that, Costco has sold around a P/E of 30 for a long period of time.
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: Pharma, Beauty + Home, and Food + Beverage.
AptarGroup (ATR) increased quarterly dividend by 5.60% to 38 cents/share, marking the 28th consecutive year of paying an increased annual dividend.
Over the past decade, this dividend champion has managed to increase annual dividends at an annualized rate of 8.10%.
The company managed to grow earnings from $2.65/share in 2011 to $3.91/share in 2020. It is expected to earn $4.05/share in 2021.
The stock is selling for 36.24 times forward earnings and yields 0.98%.
Donegal Group Inc. (DGICA) is an insurance holding company, 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, and Commercial Lines of Insurance.
Donegal Group (DGICA) raised quarterly dividends by 6.70% to 16 cents/share. The company has raised dividends for 18 years in a row. The B shares will pay 14.25 cents/share.
Over the past decade, this dividend achiever has managed to increase annual dividends at an annualized rate of 2.70%.
The company managed to grow earnings from $0.41/share in 2010 to $1.65/share in 2020. It is expected to earn $1.30/share in 2021.
The stock sells for 12.59 times forward earnings and yields 3.67%.
Quaint Oak Bancorp, Inc. (QNTO) operates as the holding company for Quaint Oak Bank that provides various banking products and services in Pennsylvania.
Quaint Oak Bancorp (QNTO) raised its quarterly dividend by 22.20% to 11 cents/share. The annual dividend has increased for 13 years in a row, despite this being the first dividend hike since 2019.
Over the past decade, this dividend achiever has managed to increase annual dividends at an annualized rate of 20.10%.
The company managed to grow earnings from $0.33/share in 2011 to $1.61/share in 2020.
The stock sells for 10.71 times earnings and yields 2.09%. This sounds like a small under the radar company, that few dividend investors are aware of. I would put it on my list for further research.
Aon plc (AON) is a professional services firm that provides advice and solutions to clients focused on risk, retirement, and health worldwide.
Aon (AON) raised its quarterly dividends by 10.90% to 51 cents/share.
Over the past decade, this dividend achiever has managed to increase annual dividends at an annualized rate of 11.50%.
Between 2011 and 2020, AON has managed to grow earnings from $2.87/share to $8.45/share.
The stock is selling for 21.60 times forward earnings and yields 0.78%. The company sounds like an interesting one to research.
Relevant Articles:
- Dividend Achievers versus Dividend Contenders & Champions
- Procter & Gamble (PG) Increased Dividends by 10%
- Dividend Champions List for 2021
- Dividend Kings List for 2021
- Dividend Aristocrats List for 2021
