As part of my monitoring process, I review the list of dividend increases every week. I tend to focus my attention on the companies with a more established track record of annual dividend increases, in order to uncover companies that can deliver sustainable results for the longest period of time. I try to focus on companies I can own for decades, through several recessions. Hence, I try to avoid fads, even if they make others richer temporarily.
This exercise helps me monitor existing holdings, but also helps me identify companies for further research.
During the past week, there were several companies that raised their quarterly dividends. I have listed the ones that have managed to increase dividends for at least a decade ( except for Apple, which is one of the largest dividend payers in the US).
Apple Inc. (AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.
The company raised its quarterly dividend by 7.30% to 22 cents/share, which marked its 9th consecutive annual dividend increase. It’s very likely that Apple would become a dividend achiever next year. During the past 5 years, it has managed to increase dividends at an annualized rate of 9.70%.
Between 2011 and 2020, Apple managed to boost earnings from 99 cents/share to $3.28/share.
Apple is expected to earn $5.16/share in 2021.
The stock is selling for 25.45 times forward earnings and yields 0.67%.
Ameriprise Financial, Inc. (AMP) provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through four segments: Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other.
Ameriprise Financial increased its quarterly dividend by 8.70% to $1.13/share. This marked the 17th year of consecutive annual dividend increases for this dividend achiever. During the past decade, the company has managed to increase dividends at an annualized rate of 19.10%.
Ameriprise grew earnings from $4.53/share in 2011 to $12.20/share in 2020.
The company is expected to earn $21.01/share in 2021.
The stock sells for 12.30 times forward earnings and offers a dividend yield of 1.75%.
American Water Works Company, Inc. (AWK) provides water and wastewater services in the United States.
The company raised its quarterly dividend by 9.50% to 60.25 cents/share. This marked the 14th consecutive year of annual dividend increases for this dividend achiever. During the past decade, American Water Works has managed to increase dividends at an annualized rate of 9.80%.
American Water Works earned $1.75/share in 2011, and managed to grow earnings to $3.91/share in 2020.
American Water Works is expected to earn $4.23/share in 2021.
The stock is selling for 36.90 times forward earnings and has a current dividend yield of 1.54%.
Chevron Corporation (CVX), engages in integrated energy, chemicals, and petroleum operations worldwide.
The company raised its quarterly dividend by 3.90% to $1.34/share. This increase puts Chevron on track to make 2021 the 34th consecutive year with an increase in annual dividend payout per share. Over the past decade, Chevron has managed to increase dividends at an annualized rate of 6.20%. Chevron is more likely to stay on the dividend aristocrats list than peer Exxon Mobil, since Exxon failed to raise dividends last year.
Chevron earned $13.44/share in 2011, but earnings have kept going lower and lower throughout the past decade, reflecting the soft environment for oil and gas prices. The company lost $2.96/share in 2020.
Chevron is expected to earn $5.46/share in 2021.
The stock is selling for 18.76 times forward earnings and yields 5.20%.
W.W. Grainger, Inc. (GWW) distributes maintenance, repair, and operating products and services in the United States, Canada, and internationally.
W.W. Grainger increased its quarterly dividend by 5.90% to $1.62/share. This is the 50th consecutive annual dividend increase for this newly minted dividend king. Over the past decade, the company has managed to grow dividends at an annualized rate of 11.10%.
"We are proud today to announce our 50th year of consistent annual dividend increases. We remain committed to our capital allocation strategy which allows us to return value to shareholders through consistent increases in the dividend and share repurchases while continuing to invest in the business," said Grainger Chairman and CEO, DG Macpherson.
The company is expected to earn $19.26/share in 2021. For reference, the company earned $9.07/share in 2011 and managed to grow it to $12.82/share in 2020.
The stock sells for 22.51 times forward earnings and yields 1.49%.
International Business Machines Corporation (IBM) provides integrated solutions and services worldwide.
IBM hiked its quarterly dividend by a penny to $1.64/share. This is the 26th year in a row that IBM has increased its quarterly cash dividend. This was also the second year in a row in which IBM raised its quarterly dividend by 1 cent. This is a far cry from the ten year annualized dividend growth rate of 10%. IBM is a dividend aristocrat with a 26 year track record of annual dividend increases.
Between 2011 and 2020, IBM’s earnings went from $13.06/share to $6.23/share.
The company is expected to earn $10.93/share.
The stock is selling for 12.99 times forward earnings and offers a dividend yield of 4.62%.
Paychex, Inc. (PAYX) provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small- to medium-sized businesses in the United States and Europe.
The company increased its quarterly dividend by 6.50% to 66 cents/share. This is the 11th year of Paychex increasing its annual dividends to shareholders.
During the past decade, the company has managed to increase dividends at an annualized rate of 7.20%.
Paychex earned $1.42/share in 2011 and managed to grow that to $3.04/share in 2020.
The company is expected to earn $2.99/share in 2021.
The stock is selling for 32.59 times forward earnings and yields 2.71%.
Northwest Bancshares, Inc. (NWBI) operates as a holding company for Northwest Bank that offers various personal and business banking solutions.
The company raised its quarterly dividend by 5.30% to 20 cents/share. This marked the 12th year of consecutive annual dividend increases for this dividend achiever. During the past decade, the company has managed to increase dividends at an annualized rate of 6.60%.
The bank is expected to earn $1.08/share in 2021. For reference, it earned 64 cents/share in 2011.
The stock is selling for 12.95 times earnings and yields 2.69%.
Regal Beloit Corporation (RBC) designs, manufactures, and sells electric motors, electrical motion controls, and power generation and transmission products worldwide.
The company hiked its quarterly dividend by 10% to 33 cents/share. This marked the 17th consecutive annual dividend increase for this dividend achiever. It has a ten year dividend growth rate of 6.20% annualized.
Between 2011 and 2021, the company managed to increase earnings from $3.79/share to $4.64/share.
Regal Beloit is expected to earn $7.19/share in 2021.
The stock is selling for 20.08 times forward earnings and yields 0.91%.
First Financial Bankshares, Inc. (FFIN), provides commercial banking products and services in Texas.
First Financial Bankshares increased its quarterly dividends by 15.40% to 15 cents/share. This was the eleventh consecutive annual dividend increase for this dividend achiever. The bank has managed to grow dividends at an annualized rate of 8.20%.
Between 2011 and 2020, the company managed to increase earnings from 54 cents/share to $1.42/share. The company is expected to earn $1.52/share in 2021.
The stock sells for 32.30 times forward earnings and yields 1.22%.
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