As a dividend growth investor, I uncover attractively valued companies by running my monthly screen against the dividend champions and dividend achievers’ indexes. I also tend to focus on the weekly list of companies that boosted distributions, in order to monitor the dividend growth of companies I own or might consider for further analysis. I also use this list in order to uncover any emerging dividend stocks, which are in the first phase of their dividend growth journey. Over the past week, there were sixteen companies which announced increases in distributions. I narrowed the list by excluding companies which had raised dividends for less than five years in a row, and came up with the following three stocks:
Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company increased the quarterly dividend on the company’s common stock by 10.90% to 71 cents per share. This marked the 31st consecutive year that Air Products has increased its dividend payment. Over the past decade, this dividend champion has raised distributions by 11.80%/year. Between 2003 and 2012, the company’s earnings rose from $1.81/share to $5.53/share. Analysts expect earnings to hit $5.78/share in 2013, and increase to $6.40/share by 2014. Currently the stock is attractively valued at 15.70 times earnings and yields 3.20%. I plan on adding to my position in the stock within the next couple of months. Check my analysis of Air Products & Chemicals for more information.
Raytheon Company (RTN) provides electronics, mission systems integration, as well as a range of mission support services in the United States and internationally. The company’s Board of Directors voted to increase the company's annual dividend payout rate by 10 percent, from $2.00 to $2.20 per share. This marked the ninth consecutive year that Raytheon Company has increased its dividend payment. Over the past decade, the company has raised distributions by 25.40%/year. Between 2003 and 2012, the company’s earnings rose from $0.88/share to $5.67/share. Analysts expect earnings to decline in 2013 to $5.33/share, and increase to $5.54/share by 2014. Currently the stock is attractively valued at 10.30 times earnings and yields 3.90%. While the dividend is sustainable and has room to grow, the focus on budget cuts in the company’s biggest customer might not bode well for long-term profitability.
Williams-Sonoma, Inc. (WSM) operates as a specialty retailer of home products. The company’s Board of Directors has authorized a 41% increase in the company’s quarterly cash dividend to $0.31 per share. This marked the eighth consecutive year that Williams-Sonoma has increased its dividend payment. Over the past five years, the company has raised distributions by 14.60%/year. Currently the stock is trading at 20.80 times trailing earnings and yields 2.50%. The trailing earnings per share over the past four quarters nets to $2.39. Analyst projections for 2013 and 2014 are for earnings growth to $2.78 /share and $3.17/share. Between 2004 and 2012, the company’s earnings rose from $1.36/share to $2.27/share. I am going to add Williams-Sonoma to my list for further analysis.
Full Disclosure: Long APD
- Three stages of dividend growth
- My Entry Criteria for Dividend Stocks
- The World’s Best Dividend Portfolio
- Dividend Champions Index – Five Year Total Return Performance
- Dividend Champions - The Best List for Dividend Investors
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