As part of my monitoring process, I review the list of dividend increases every week. I use this exercise to review existing holdings, and to identify companies for further research. I tend to focus on the companies with a ten year history of annual dividend increases. That's in an effort to identify consistent dividend growth companies that could potentially reward me with higher dividends for many years.
Of course, that's just one step in the process for me. If I identify a company for review, I look at financials, such as the trends in dividends, earnings, payout ratios over the past decade. I try to understand the company, and determine if it is a suitable candidate for my portfolio. Last but not least, I also try to determine whether it is fairly valued today. If not, I set some mental entry points when the company may be worth re-visting at.
Over the past week, there were close to 40 dividend increases. I am including below the companies that raised dividends last week and also had a minimum 10 year streak of consecutive annual dividend increases:
Fastenal Company (FAST) engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally.
The company increased quarterly dividends by 12.90% to $0.35/share. This is the 25th consecutive annual dividend increase for this newly minted dividend champion. Over the past decade, the company has managed to grow dividends at an annualized rate of 12.90%.
Earnings per share rose from $0.76 in 2013 to $1.89 in 2022. The company is expected to earn $1.94/share in 2023.
The stock is selling for 25.29 times forward earnings and yields 2.86%.
Franco-Nevada Corporation (FNV) operates as a gold-focused royalty and streaming company in Latin America, the United States, Canada, and internationally. It operates in two segments, Mining and Energy.
The company increased quarterly dividends by 6.30% to $0.34/share. This marks the 16th consecutive annual increase for Franco-Nevada shareholders. Over the past decade, the company has managed to grow dividends at an annualized rate of 9%.
Earnings per share rose from $0.72 in 2012 to $3.84 in 2021. The company is expected to earn $3.65/share in 2022.
The stock is selling for 39.47 times forward earnings and yields 0.92%.
Enterprise Bancorp, Inc. (EBTC) operates as the holding company of Enterprise Bank and Trust Company that provides commercial banking products and services. It offers commercial and retail deposit products, including checking accounts, limited-transactional savings and money market accounts, commercial sweep products, and term certificates of deposit.
The company increased quarterly dividends by 12.20% to $0.23/share. This marks the 31st consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to grow annualized dividends at a rate of 6.40%.
Earnings per share rose from $1.29 in 2012 to $3.51 in 2021.
The stock is selling for 10.38 times trailing earnings and yields 2.59%.
J.B. Hunt Transport Services, Inc. (JBHT) provides surface transportation, delivery, and logistic services in North America. It operates through five segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT).
The company increased quarterly dividends by 5% to $0.42/share. This marks is the 19th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, the company has managed to grow annualized dividends at a rate of 11.10%.
Earnings per share rose from $2.92 in 2013 to $9.21 in 2022.
The stock is selling for 20.11 times trailing earnings and yields 0.89%.
Consolidated Edison, Inc. (ED) engages in the regulated electric, gas, and steam delivery businesses in the United States.
The company increased quarterly dividends by 2.50% to $0.81/share. This is the 49th consecutive annual dividend increase for this dividend aristocrat. Over the past decade, the company has managed to grow annualized dividends at a rate of 2.70%.
I like their comment in the press release:
"The 49th consecutive annual increase for stockholders, the longest period of consecutive annual dividend increases of any utility in the S&P 500 index, reflects our continued emphasis on providing a return to our investors while meeting the needs of our customers during the clean energy transition," said Robert Hoglund, Con Edison's senior vice president and chief financial officer. The company continues to target a dividend payout ratio of between 60% and 70% of its adjusted earnings.
Earnings per share went from $3.89 in 2012 to $3.86 in 2021. Con Edison is expected to earn $4.54/share in 2022.
The stock is selling for 20.55 times forward earnings and yields 3.45%.
Union Bankshares, Inc. (UNB) operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire.
The company increased quarterly dividends by 2.90% to $0.36/share. This marks the 11th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow annualized dividends at a rate of 3.40%.
Earnings per share rose from $1.54 in 2012 to $2.94 in 2021.
The stock is selling for 8.74 times trailing earnings and yields 5.76%.
Mercantile Bank Corporation (MWBM) operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services to small- to medium-sized businesses and individuals in the United States.
The company increased quarterly dividends by 3.10% to $0.33/share. This marks the 11th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow annualized dividends at a rate of 30.20%. That high dividend growth is due to it cutting dividends in 2010 - 2011, and initiating a small dividend base in 2012.
Earnings per share rose from $1.96 in 2013 to $3.85 in 2022. The bank is expected to earn $4.49/share in 2023.
The stock is selling for 7.42 times forward earnings and yields 3.96%.
Relevant Articles:
- Twelve Companies Rewarding Shareholders With a Raise
- Three Dividend Achievers Rewarding Shareholders With Raises Last Week
- Two Dividend Achievers Rewarding Shareholders With Raises
- Dividend Increases for the Dividend Aristocrats in 2022