I review the list of dividend increases as part of my monitoring process. This exercise helps me monitor existing portfolio holdings and also identify companies for further research. It also identifies companies that I should put on the chopping block.
In this review, I typically share the companies that raised dividends. However, over the past week, there were two notable dividend cuts. Both came from two dividend kings, 3M (MMM) and Leggett & Platt (LEG).
Leggett & Platt (LEG) cut dividends by 89% to 5 cents/share. This ended a 52 year streak of consecutive annual dividend increases for this now former dividend king.
3M (MMM) announced its intent to target a 40% adjusted free cash flow per share after spinning off its subsidiary Solventum (SOLV) earlier this month. The spin-off has not declared dividends yet. 3M shareholders holding 4 legacy 3M shares ended up with 1 share of Solventum as part of the spin-off.
This announcement for the new 3M dividend polity targeting 40% free cash flow payout ratio is a stealth dividend cut.
Source: 3M Press Release
Since 2010, there have been only four companies that have left the dividend kings list. One, Vectren (VVC) was acquired. The second, Integrys Energy Group was also acquired. The second, Diebold (DBD), kept dividends unchanged, but ultimately ended up cutting them. The third, V.F. Corp (VFC) became a dividend king in 2022, but left the list after 2 months as the company cut dividends in February 2023.
Losing two dividend kings at once in an year is a record. However, this number should also not be viewed in isolation because the dividend kings list has increased from 10 in 2010 to 47 in early 2024 (to 45 now).
From a historical context, dividend kings did not even exist until 1994. That's when Winn Dixie became the first company in the world to become a dividend king. In the next decade or so, there were only one or two dividend kings at all. And between 2000 and 2001 there were no dividend kings at all. We've seen an increase in the number of dividend kings since then. You may like this post here on the evolution of dividend kings.
There were also 12 dividend increases last week from companies that have managed to raise dividends for at least 10 years in a row. The companies include:
Apple Inc. (AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.
Apple raised its quarterly dividend by 4.20% to $0.25/share. This is the 12th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 8.50%. The rate of dividend growth has been decelerating over the past 3 and 5 years however.
The company managed to grow earnings from $1.62/share in 2014 to $6.16/share in 2023.
The company is expected to earn $6.57/share in 2024.
The stock sells for 27.89 times forward earnings and yields 0.55%.
American Water Works Company, Inc. (AWK) provides water and wastewater services in the United States.
The company increased quarterly dividends by 8.10% to $0.765/share. This is the 16th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 9.80%.
The company managed to grow earnings from $2.36/share in 2014 to $4.89/share in 2023.
The company is expected to earn $5.25/share in 2024.
The stock sells for 24.50 times forward earnings and yields 2.40%.
CNO Financial Group, Inc. (CNO), through its subsidiaries, develops, markets, and administers health insurance, annuity, individual life insurance, insurance products, and financial services for senior and middle-income markets in the United States.
The company increased quarterly dividends by 6.70% to $0.16/share. This is the 12th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 8.60% over the past five years.
The company managed to grow earnings from $0.24/share in 2014 to $2.44/share in 2023.
The company is expected to earn $3.41/share in 2024.
The stock sells for 8 times forward earnings and yields 2.21%.
FactSet Research Systems Inc. (FDS) is a financial data company which provides integrated financial information and analytical applications to the investment community in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
FactSet Research Systems raised quarterly dividends by 6.10% to $1.04/share. This is the 25th consecutive annual dividend increase for this dividend champion. Over the past decade, it has managed to raise dividends at an annualized rate of 10.90%.
The company managed to grow earnings from $4.98/share in 2014 to $12.26/share in 2023.
The company is expected to earn $15.98/share in 2024.
The stock sells for 26.80 times forward earnings and yields 0.97%.
International Business Machines Corporation (IBM) provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments.
IBM eked out a 0.60% raise in its quarterly dividend to $1.67/share. This is the 29th consecutive annual dividend increase for this dividend aristocrat. Over the past five years, it has managed to grow dividends at an annualized rate of 1.30%.
The company's earnings fell from $11.97/share in 2014 to $8.23/share in 2023.
The company is expected to earn $10/share in 2024.
The stock sells for 16.60 times forward earnings and yields 4%.
MSA Safety Incorporated (MSA) develops, manufactures, and supplies safety products and technology solutions that protect people and facility infrastructures in the fire service, energy, utility, construction, and industrial manufacturing applications, as well as heating, ventilation, air conditioning, and refrigeration industries worldwide.
MSA Safety raised its quarterly dividend by 8.50% to $0.51/share. This was the 54th consecutive annual dividend increase for this dividend king. Over the past decade, the company managed to increase dividends at an annualized rate of 4.70%.
The company managed to get earnings from $2.37/share in 2014 to $1.49/share in 2023.
The stock sells for 27.50 times earnings and yields 1.11%.
Paychex, Inc. (PAYX) provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small to medium-sized businesses in the United States, Europe, and India.
Paychex raised its quarterly dividend by 10.10% to $0.98/share. This was the 14th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 9.80% over the past decade.
The company's earnings increased from $1.72/share in 2014 to $4.32/share in 2023.
The company is expected to earn $4.72/share in 2024.
The stock sells for 25.47 times forward earnings and yields 3.26%.
Pool Corporation (POOL) distributes swimming pool supplies, equipment, and related leisure products in the United States and internationally.
Pool raised its quarterly dividends by 9.10% to $1.20/share. This was the 14th year of consecutive annual dividend increases for this dividend achiever. The company has managed to grow dividends at an annualized rate of 19.40% over the past decade.
The company's earnings increased from $2.50/share in 2014 to $13.45/share in 2023.
The company is expected to earn $13.35/share in 2024.
The stock sells for 27.31 times forward earnings and yields 1.32%.
RLI Corp. (RLI) is an insurance holding company which underwrites property and casualty insurance.
The company increased quarterly dividends by 7.40% to $0.29/share. This is the 49th consecutive annual dividend increase for this dividend champion. The company has managed to increase dividends at an annualized rate of 4.80%.
The company's earnings increased from $3.15/share in 2014 to $6.68/share in 2023.
The company is expected to earn $5.78/share in 2024.
The stock sells for 24.83 times forward earnings and yields 0.81%.
Simpson Manufacturing Co., Inc. (SSD) designs, engineers, manufactures, and sells structural solutions for wood, concrete, and steel connections.
The company increased quarterly dividends by 3.70% to $0.28/share. This was the 11th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 7.80%.
The company's earnings increased from $1.30/share in 2014 to $8.31/share in 2023.
The company is expected to earn $8.44/share in 2024.
The stock sells for 21.46 times forward earnings and yields 0.62%.
The Timken Company (TKR) designs, manufactures, and sells engineered bearings and industrial motion products, and related services in the United States and internationally.
Timken raised dividends by 3% to $0.34/share. This was the 16th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 6.97%.
The company's earnings increased from $1.89/share in 2014 to $5.52/share in 2023.
The company is expected to earn $6.18/share in 2024.
The stock sells for 14.48 times forward earnings and yields 1.52%.
Tetra Tech, Inc. (TTEK) provides consulting and engineering services in the United States and internationally. The company operates through two segments, Government Services Group (GSG) and Commercial/International Services Group (CIG).
The company raised quarterly dividends by 11.50% to $0.29/share. This is the tenth consecutive annual dividend increase for this newly minted dividend achiever. Over the past five years, the company has managed to increase dividends at an annualized rate of 16.70%.
The company's earnings increased from $1.68/share in 2014 to $5.14/share in 2023.
The company is expected to earn $6.20/share in 2024.
The stock sells for 33.51 times forward earnings and yields 0.56%.
Unum Group (UNM) provides financial protection benefit solutions primarily in the United States, the United Kingdom, Poland, and internationally.
The company announced a 15% increase in its quarterly dividend to $0.42/share. This is the 16th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, the company has managed to raise dividends at an annual rate of 9.70%.
The company's earnings increased from $1.57/share in 2014 to $6.53/share in 2023.
The company is expected to earn $8.17/share in 2024.
The stock sells for 6.32 times forward earnings and yields 2.83%.
Relevant Articles:
- Five Dividend Growth Companies Raising Dividends Last Week
