Welcome to my latest weekly review of dividend increases.
As part of my monitoring process, I review dividend increases that occured over the past week.
I then narrow my attention down to the companies which both raised dividends last week AND have at least a ten year track record of annual dividend increases under their belt.
A company that can grow dividends for many years in a row is usually one with strong competitive advantages, and ability to reinvest and high rates of return. Those types of quality companies can manage to grow the business, while also generating a rising stream of cashflows to share with shareholderds.
Hence, I tend to keep a close look at companies that have increased dividends for many years in a row. Reviewing recent dividend increases is an extension of that process.
This of course is just one step of the review and monitoring process that I follow. However, it is also good snapshot of the the process I use to quickly decide if a company is worth putting on the list for further research, or discarded.
I tend to look for dividend increases, which are supported by growth in earnings per share. Without that, future dividend growth will be limited.
I also like to review changes in dividend growth, relative to the historical average, to get clues as to where the winds are blowing. Dividend increases are a good signal from managements, which are keenly aware of the competitive dynamics in their industries. As a result, those dividend increases represent a good signaling mechanism as to howt those management teams are expecting the business to perform in the near term.
Last but not least, it is important to determine whether the valuation is attractive or not. This should usually be done at the end. Valuation only matters of course if the business is determined to be of sound quality fundamentally speaking, in the previous steps.
Over the past week, there were ten companies that both raised dividends to shareholders AND also have a minimum of ten year track record of annual dividend increases. You can see the companies, and my review of them below:
Agilent Technologies, Inc. (A) provides application focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide. The company operates in three segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab.
The company increased quarterly dividends by 5.10% to $0.248/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.
Between 2014 and 2023, the company managed to grow earnings from $1.65/share to $4.22/share.
The company is expected to earn $5.24/share in 2024.
The stock sells for 25.55 times forward earnings and yields 0.71%.
Assurant, Inc. (AIZ) provides business services that supports, protects, and connects consumer purchases in North America, Latin America, Europe, and the Asia Pacific. The company operates through two segments: Global Lifestyle and Global Housing.
The company raised quarterly dividends by 11.10% to $0.80/share. This is the 20th consecutive year of dividend increases for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 4.30%.
Assurant managed to grow earnings from $6.52/share in 2014 to $12.02/share in 2023.
The company is expected to earn $15.39/share in 2024.
The stock sells for 14.70 times forward earnings and yields 1.41%.
Brown-Forman Corporation (BF.A)(BF.B) manufactures, distills, bottles, imports, exports, markets, and sells various alcoholic beverages.
The company raised dividends by 4% to $0.2265/share. This is the 41st consecutive annual dividend increase for this dividend aristocrat. The 5 year annualized dividend growth rate is at 5.40%.
Brown-Forman managed to grow earnings from $1.29/share in 2015 to $2.15/share in 2024.
The company is expected to earn $1.78/share in 2025.
The stock sells for 23.26 times forward earnings and yields 2.19%.
Dolby Laboratories, Inc. (DLB) engages in the design and manufacture of audio, imaging, accessibility, and other hardware and software solutions primarily for application in the television, broadcast, and live entertainment industries in the United States and internationally.
The company increased its quarterly dividend by 10% to 0.33/share. This is the tenth year of consecutive annual dividend increases for this newly minted dividend achiever. The company has a 5 year annualized dividend growth rate of 10.60%.
Between 2015 and 2024, the company grew earnings from $1.77/share to $2.74/share.
The company is expected to earn $4.06/share in 2025.
The stock sells for 19.80 times forward earnings and yields 1.64%.
Matthews International Corporation (MATW) provides brand solutions, memorialization products, and industrial technologies worldwide. It operates through three segments: Memorialization, Industrial Technologies, and SGK Brand Solutions.
The company raised quarterly dividends by 4.20% to $0.25/share. This represents the 31st consecutive annual dividend increase since this dividend champion became a publicly-traded company. OVer the past five years, annualized dividend growth has remained at 3.80%.
Between 2015 and 2024, the company's earnings went from $1.93/share to a negative $1.93/share (a loss).
The company is expected to earn $1.72/share in 2024.
The stock sells for 18 times forward earnings and yields 3.24%.
Merck & Co., Inc. (MRK) operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health.
The company raised its quarterly dividend by 5.20% to $0.81/share. This is the 13th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends by 8.70%/year over the past 5 years.
Merck is expected to generate $7.74/share in 2024. The company earned $4.12/share in 2014 for reference. Consistent one-time items require more intense review of annual EPS figures for this company.
The stock sells for 12.80 times forward earnings and yields 3.26%.
McCormick & Company, Incorporated (MKC) manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. It operates in two segments, Consumer and Flavor Solutions.
The company hiked its quarterly dividend by 7.10% to $0.45/share. This marks the 39th consecutive dividend increase for this dividend aristocrat. Over the past five years, it has managed to grow dividends at an annualized rate of 8.40%.
McCormick managed to grow earnings from $1.69/share in 2014 to $2.54/share in 2023.
The company is expected to generate $2.92/share in 2024.
The stock sells for 26.60 times forward earnings and yields 2.32%.
Royal Gold, Inc. (RGLD) acquires and manages precious metal streams, royalties, and related interests.
The company raised quarterly dividends by 12.50% to $0.45/share. This is the 23rd consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 8.40%.
Between 2015 and 2024, the company managed to grow earnings from $0.80/share to $3.65/share.
The company is expected to earn $5.12/share in 2024.
The stock sells for 29.10 times forward earnings and yields 1.21%.
United Bancorp, Inc. (UBCP) operates as the bank holding company for Unified Bank that provides commercial and retail banking services in Ohio.
The bank approved a 1.40% raise in its quarterly dividend to $0.18/share. The new rate is 5.90% over the dividend paid during the same time last year. That's because the bank has tended to to raise dividends every quarter since 2021, by a little bit, which tends to accumulate nicely.
Between 2014 and 2023, the company grew earnings from $0.54/share to $1.57/share.
The company is expected to earn $1.25/share in 2024.
The stock sells for 10.60 times forward earnings and yields 5.45%.
WesBanco, Inc. (WSBC) operates as the bank holding company for WesBanco Bank, Inc. that provides retail banking, corporate banking, personal and corporate trust, brokerage, mortgage banking, and insurance services to individuals and businesses in the United States. The company operates through two segments, Community Banking, and Trust and Investment Services.
The company increased quarterly dividends by 2.80% to $0.37/share. This is the 14th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 4.40%/year over the past five years.
Between 2014 and 2023, the company's earnings went from $2.39/share to $2.51/share.
The company is expected to earn $2.15/share in 2024.
The stock sells for 17 times forward earnings and yields 4.06%.
Relevant Articles:
- Seven Dividend Growth Companies Increase Dividends Last Week