I review the list of dividend increases as part of my monitoring process. This allows me to see how the companies I own are doing. It also lets me uncover companies for further research.
This process also allows me to share the quick review I make for each company I stumble upon. It provides me with an idea of whether I want to research any further, or move on to other ideas.
In general I look for:
1) At least a ten year track record of annual dividend increases or longer
2) Growing earnings per share
3) Consistent dividend increases
4) Margin of safety to ensure dividend safety
5) Good valuation
During the past week, there were several companies that raised dividends, which also had a ten year track record of annual dividend increases. I will be reviewing them with the five step guidelines above, before deciding if I want to research them any further.
The companies raising dividends last week include:
|
Company |
Ticker |
New Dividend |
Old Dividend |
Increase |
Years Dividend Increases |
P/E |
Dividend Yield |
10 year Annualized Dividend Growth |
|
Sierra Bancorp |
BSRR |
$
0.23 |
$
0.22 |
4.55% |
10 |
9.74 |
3.35% |
13.61% |
|
Delek Logistics Partners |
DKL |
$ 0.975 |
$ 0.95 |
2.63% |
10 |
10.52 |
9.12% |
8.40% |
|
Consolidated Edison |
ED |
$
0.79 |
$
0.78 |
1.28% |
48 |
19.51 |
3.82% |
2.59% |
|
Fastenal |
FAST |
$
0.31 |
$
0.28 |
10.71% |
24 |
31.60 |
2.19% |
15.61% |
|
J.B. Hunt |
JBHT |
$
0.40 |
$
0.30 |
33.33% |
18 |
22.98 |
0.80% |
8.54% |
|
Alliant Energy |
LNT |
$0.4275 |
$0.4025 |
6.21% |
19 |
22.63 |
2.86% |
6.60% |
|
Mercantile Bank |
MBWM |
$
0.31 |
$
0.30 |
3.33% |
19 |
12.3 |
3.24% |
40.28% |
This is a list of companies for further review. Most seem attractive as businesses, but that doesn’t mean that they should be invested in at any price, regardless of valuation.
The next step is to check each business, in order to determine if it is worth further review. I would look at ten year trends in earnings per share, dividends per share, payout ratios, shares outstanding. I would try to understand what the business does, and make an assessment if the good times would continue, so that I can expect higher earnings, dividends and intrinsic values over time. I would look at the valuation relative to earnings and dividend growth, in order to determine if the business is fairly valued, if it looks promising too. For a sample analysis of Blackrock (BLK) from a few days ago, check this article.
Relevant Articles:
- Four Companies Rewarding Their Thankful Shareholders With a Raise
- Twelve Companies Rewarding Shareholders With a Raise
- Sixteen companies delivering value to their shareholders
