As part of my review process, I monitor the list of dividend increases every week. This exercise helps me monitor existing positions, but also identify newer companies for further research.
I tend to focus on the companies with a long history of annual dividend increases, like the achievers or aristocrats. That's because I am looking for companies that can potentially grow dividends over the course of a full economic cycle. I am also looking for companies that are riding long economic trends that last many years. I am not interested in short-term investments.
Monitoring dividend increases is just one part of my process of course. I monitor my watchlist, screen companies in my investment universe and try to scour the world for ideas. Once I get to an idea, I review its fundamentals, and determine the maximum entry price I am willing to buy it at.
Over the past week, there were two companies that increased dividends and managed to increase dividends annually for at least a decade.
Bank OZK (OZK) provides various retail and commercial banking services.
The bank hiked quarterly dividends by 3% to $0.34/share. The new rate is 13.33% higher than the dividend paid during the same time last year.
This newly minted dividend champion has managed to increase dividends for 25 years in a row. Over the past decade, Bank OZK has managed to increase dividends at an annualized rate of 17.60%.
Between 2012 and 2021, Bank OZK managed to grow earnings from $1.11/share to $4.49/share. It's expected to earn $4.48/share in 2022 and $5.26/share in 2023.
The stock sells for 9 times forward earnings and yields 3.36%.
Enterprise Products Partners L.P. (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services.
This Master Limited Partnership hiked quarterly distributions to $0.49/unit. This distribution represents a 5.4 percent increase over the distribution paid during the same time last year.
This dividend achiever has managed to increase distributions every single year since going public in 1998.
Enterprise Products Partners is one of the best run MLPs in my opinion. Over the past decade, it has managed to grow distributions at an annualized rate of 4%.
The MLP yields 7.84% today.
Relevant Articles:
- Dividend Increases for the Dividend Aristocrats in 2022
- Twelve Companies Rewarding Shareholders With a Raise