As part of my monitoring process, I review the list of dividend increases every week. This exercise helps me monitor existing investments and potentially identify hidden gems for further research.
There were 29 companies that increased dividends last week. I narrowed the list down by focusing on companies that have managed to increase distributions for at least a decade.
I included all the information that would help me determine if they are worthy of further research. In general, I look for companies with a dividend growth that exceeds inflation. I review the recent dividend increase to the average over the past decade. I also find it helpful to review if management says anything about the dividend increase.
I also look for rising earnings per share over the past decade, which is the fuel behind future dividend increases. I also look for companies where earnings can continue growing in the future.
While not calculated here, I also review the dividend payout ratio, in conjunction with earnings and dividend growth. I want companies that can continue to grow dividends during the ups and downs of the economic cycle.
Last but not least, I also look at valuation. Even the best company in the world is worth buying at any price. The downside of course is that valuation is very subjective and dependent on assumptions that may turn out to be either overly optimistic or overly pessimistic. In general, I look at earnings and dividends growth, along with P/E ratios to evaluate if I want to own a stock or not. I also look at things like interest rates, and other ideas available at the time.
I came up with this list of nine companies raising dividends last week.
American States Water Company (AWR) provides water and electric services to residential, commercial, industrial, and other customers in the United States. It operates through three segments: Water, Electric, and Contracted Services.
The company increased quarterly dividends by 8.20% to $0.43/share. This dividend king has increased dividends for 69 consecutive years. Over the past decade, it has managed to grow dividends at an annualized rate of 9.20%.
“This significant dividend increase reflects American States Water’s strength and our Board’s confidence in the company’s ability to achieve long-term, sustainable earnings growth,” said Robert J. Sprowls, President and CEO of American States Water Company. “A growing dividend allows the company to attract capital for investments in its infrastructure that enable us to provide safe and reliable services to our customers.”
Between 2013 and 2022, the company grew earnings from $1.61/share to $2.12/share.
The company is expected to earn $2.90/share in 2023.
The stock is selling for 29.66 times forward earnings and yields 2%.
Carlisle Companies Incorporated (CSL) operates as a manufacturer of engineered products in the United States, Europe, Asia, Mexico, the United Kingdom, and internationally. It operates through four segments: Carlisle Construction Materials, Carlisle Weatherproofing Technologies, Carlisle Interconnect Technologies, and Carlisle Fluid Technologies.
The company increased quarterly dividends by 13.30% to $0.85/share. This is the 47th consecutive annual dividend increase for this dividend champion. Over the past decade, it has managed to grow dividends at an annualized rate of 13%.
Chris Koch, Chair, President and Chief Executive Officer, said, “This increase in our dividend is Carlisle’s 47th consecutive annual increase and demonstrates Carlisle’s solid financial position, favorable growth prospects and commitment to returning capital to our shareholders as part of our superior capital allocation strategies.”
Between 2013 and 2022, the company grew earnings from $3.29/share to $17.80/share.
The company is expected to earn $17.53/share in 2023.
The stock sells for 16.20 times forward earnings and yields 1.20%.
Chemed Corporation (CHE) provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers primarily in the United States. The company operates in two segments, VITAS and Roto-Rooter.
The company hiked quarterly dividends by 5.30% to $0.40/share. That's the 15th consecutive year of annual dividend increases for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 8.10%.
Between 2013 and 2022, the company grew earnings from $4.24/share to $16.72/share.
The company is expected to earn $19.98/share in 2023.
The stock sells for 25.74 times forward earnings and yields 0.31%.
Essential Utilities, Inc. (WTRG) operates regulated utilities that provide water, wastewater, or natural gas services in the United States. The company operates through Regulated Water and Regulated Natural Gas segments.
The company increased quarterly dividends by 7% to $0.3071/share. This is the 31st consecutive annual dividend increase for this dividend champion. Over the past decade, it has managed to grow dividends at an annualized rate of 7.60%.
“The Board’s decision to increase the quarterly dividend adds to our continued record of delivering shareholder value. The long history of consecutive quarterly cash dividends is indicative of the company’s commitment to yielding strong results while providing safe and reliable services to our customers,” said Essential Chairman and Chief Executive Officer Christopher Franklin.
Between 2013 and 2022, the company grew earnings from $4.24/share to $16.72/share.
The company is expected to earn $1.86/share in 2023.
The stock sells for 21.82 times forward earnings and yields 3%.
Federal Realty (FRT) is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles.
The company increased quarterly dividends by 0.90% to $1.09/share. This increase represents the 56th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector. Over the past decade, it has managed to grow dividends at an annualized rate of 4.40%.
Federal Realty managed to grow FFO/share between 2013 and 2023 from $4.41 to $6.32.
This dividend king is expected to generate $6.50/share in FFO in 2023.
The stock sells for 15.90 times forward FFO and yields 4.20%.
Hawkins, Inc. (HWKN) operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition.
The company increased quarterly dividends by 6.70% to $0.16/share. This is the 19th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 5.40%.
The company managed to grow earnings from $0.86/share in 2013 to $2.88/share in 2022.
Hawkins is expected to earn $2.57/share in 2023.
The stock sells for 19.16 times forward earnings and yields 1.30%.
Illinois Tool Works Inc. (ITW) manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products.
The company raised quarterly dividends by 6.90% to $1.40/share. This is the 52nd consecutive annual dividend increase for this dividend king. Over the past decade, it has managed to grow dividends at an annualized rate of 13%.
Between 2013 and 2022, the company grew earnings from $3.76/share to $9.80/share.
The company is expected to earn $9.74/share in 2023.
The stock sells for 25.33 times forward earnings and yields 2.27%.
Service Corporation International (SCI) provides deathcare products and services in the United States and Canada. The company operates through Funeral and Cemetery segments.
The company increased quarterly dividends by 7.40% to $0.29/share. This is the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 16.60%.
Between 2013 and 2022, the company grew earnings from $0.70/share to $3.58/share.
The company is expected to earn $3.47/share in 2023.
The stock sells for 18.81 times forward earnings and yields 1.77%.
Terreno Realty Corporation (TRNO) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.
The company increased quarterly dividends by 12.50% to $0.45/share. This is the 12th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 12.40%.
The REIT grew FFO from $0.60/share in 2013 to $2/share in 2022. It is expecting to generate $2.17/share in FFO in 2023.
The stock sells for 27.39 times forward FFO and yields 3%.
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