I review the list of dividend increases as part of my monitoring process. This helps me review the story behind companies I already own. It also helps me review companies for potential inclusion into my watchlist.
A long track record of annual dividend increases is an indication of a quality company with a strong business model. Its strength could be due to a favorable environment, competitive position, unique product, patent or trademark, a strong brand, a loyal group of customers or a combination of the above.
I find it helpful to identify these businesses and place them on my list for further research.
During the past week, there were five companies with long histories of annual dividend increases, which also hiked distributions to shareholders.
The companies include:
Hingham Institution for Savings (HIFS) increased its quarterly dividend by 3.90% to 53 cents/share.
The Bank has consistently increased regular quarterly cash dividends over the last twenty-six years. The Bank has also declared special cash dividends in each of the last twenty-six years, typically in the fourth quarter.
Over the past decade, Hingham Institution for Savings has managed to increase dividends at an annualized rate of 6.40%.
Between 2011 and 2020, the company managed to boost earnings from $5.67/share to $23.25/share.
The stock sells for 11.60 times earnings and yields 0.59%.
Sensient Technologies (SXT) raised its quarterly dividend by 5.10% to 41 cents/share. This marked the 16th consecutive year of annual dividend increases for this dividend achiever. The company has managed to grow dividends at an annualized pace of 7% over the past decade.
“This increase raises our dividend payments to an annualized payout of $1.64 per share and reflects the ongoing confidence in the future of our business,” said Paul Manning, Chairman, President and Chief Executive Officer of Sensient Technologies Corporation. “With this increase, our quarterly dividend has risen by 37% over the past five years.”
Between 2011 and 2020, the company has only managed to boost earnings from $2.41/share to $2.59/share.
The company is expected to earn $3.11/share in 2021.
The stock is selling for 30.90 times forward earnings and yields 1.70%.
A. O. Smith Corporation (AOS) manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products in North America, China, Europe, and India. It operates through two segments, North America and Rest of World.
A.O. Smith raised its quarterly dividend by 7.70% to 28 cents/share. This marked the 28th consecutive year of annual dividend increases for this dividend aristocrat. Over the past decade, the company has managed to increase dividends at an annualized rate of 21.90%.
"Our dividend increase today reflects our confidence in the large, stable replacement demand inherent in our water heating business, as well as our focus on returning capital to shareholders," said Kevin Wheeler, chairman and chief executive officer.
Between 2011 and 2020, the company managed to boost earnings from $1.64/share to $2.12/share.
The company is expected to earn $2.76/share in 2021.
The stock is selling for 23.84 times forward earnings and yields 1.70%.
Avient Corporation (AVNT) provides specialized polymer materials, services, and solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in three segments: Color, Additives and Inks; Specialty Engineered Materials; and Distribution.
Avient raised its quarterly dividend by 11.80% to 23.75 cents/share. This marked the 10th consecutive year of annual dividend increases for this newly minted dividend achiever. The company has a five year annualized dividend growth rate of 15.20%.
"Our track record of earnings growth over the years and ability to generate strong cash flow has allowed us to raise our dividend every year since it was first initiated in 2011," said Robert M. Patterson, Chairman, President, and Chief Executive Officer, Avient Corporation. "We are pleased to announce this latest increase of 12%, which reflects the record adjusted EPS we project for 2021 and the confidence we have in our portfolio of sustainable solutions and future growth projections."
Between 2011 and 2020, the company's earnings went from $1.84/share to $1.45/share.
The company is expected to earn $3.02/share in 2021.
The stock is selling for 16.93 times forward earnings and yields 1.86%.
Northwest Natural Holding Company (NWN) provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington.
The Board of Directors of Northwest Natural Holding Company increased the quarterly dividend by 0.52% to 48.25 cents per share
This dividend king Increased Dividend for the 66th Consecutive Year. However, the raises are at a very slow pace. Over the past decade, this dividend king has managed to boost distributions at an annualized rate of 1.30%.
Between 2011 and 2020, the company managed to boost earnings from $2.36/share to $2.51/share.
The company is expected to earn $2.54/share in 2021.
The stock is selling for 18.65 times forward earnings and yields 4.07%
