There were many companies that increased dividends in the past week. I skimmed the list, and narrowed it down by eliminating any company yielding less than 2% and only having a minimal dividend growth below the historical rate of inflation. The list is further narrowed down by removing any company that has not raised distributions for at least five years in a row.
This meant that companies like Brown-Forman (BF.B), which raised dividends by 13.80% to 29 cents/share, were excluded, because they yielded 1.50%. As a holder of Brown-Forman stock I am happy with that, despite the fact that shares are currently overvalued at 25.60 times forward earnings. Given the steady increase in distributions for 30 years in a row however, this dividend champion is a hold, but not a buy at these prices.
The companies that met the criteria included:
National Bankshares, Inc. (NKSH) operates as the bank holding company for the National Bank of Blacksburg, which provides a range of retail and commercial banking services to individuals, businesses, non-profits, and local governments. The bank raised its semi-annual dividend to 58 cents/share. This marked the 15 consecutive annual dividend increase for this dividend achiever. Over the past decade, National Bankshares has managed to boost dividends by 8.50%/year. The stock is attractively valued at 14.60 times earnings and yields 3.20%. I analyzed National Bankshares last year, but never really did anything about it. While the stock is a buy, I found other shares in the past 18 months which seemed better places for my money.
Lancaster Colony Corporation (LANC) manufactures and markets consumer products focusing primarily on specialty foods for the retail and foodservice markets in the United States. The company boosted its quarterly dividend by 10% to 44 cents/share. This marked the 52nd consecutive annual dividend increase for this dividend king. Over the past decade, Lancaster Colony has managed to boost dividends by 6.70%/year. The stock looks pricey at 21.40 times forward earnings, and at a current yield of 2.10%. I would need to add it to my list for further research.
The Williams Companies, Inc. (WMB) operates as an energy infrastructure company. The company raised quarterly distribution by 3.75% to 38 cents/share. Williams has raised dividends for 11 years in a row. Since 2011, this dividend achiever has actually managed to boost distributions every single quarter. As a result, the new dividend is 16.90% above the dividend paid in Q4 2012. The really interesting part is that Williams Companies (WMB) expects to hike dividends to $1.75/share in 2014 and $2.11/share by 2015. Over the past decade, Williams has raised dividends by 11%/year. The stock yields 4.30%, and seems to sell for 43 times earnings. I would need to put the company on my list for further research, although I have a hunch that the high P/E is because of its interest in Williams Partners (WPZ).
The Laclede Group, Inc. (LG), through its subsidiaries, engages in the retail distribution, sale, and marketing of natural gas. The company raised its quarterly dividend by 3.50% to 44 cents/share. This marked the eleventh consecutive annual dividend increase for this dividend achiever. Over the past decade, Laclede has managed to boost distributions by only 2.20%/year. The stock yields 3.75% and trades at 17.90 times earnings. Given the metrics out there, I would say this stock is probably a decent hold, although future dividend hikes would likely be limited to compensate for inflation.
To summarize, by focusing on the weekly list of companies that increase dividends, one would be able to monitor their holdings and also uncover opportunities that their regular screens might have overlooked. I am definitely interested to learn how Lancaster Colony has managed to raise dividends for over half a century, and whether it can continue this streak. I am also going to research more on Williams Companies, given the high yield and high expected dividend growth.
Full Disclosure: Lon g BF-B
- Check the Complete Article Archive
- Dividend Achievers Offer Income Growth and Capital Appreciation Potential
- Dividend Champions - The Best List for Dividend Investors
- What is Dividend Growth Investing?
- Dividend Investing – Science versus Intuition
One of my favorite books on investing is “ The Snowball: Warren Buffett and the Business of Life ” by Alice Schroeder. The book describes ho...
I am incredibly lucky that I have been able to share my dividend investing journey with you over the past eight years. I am also very lucky ...
In my previous article, I discussed the concept of the dividend snowball as it applies to my dividend portfolio and dividend income. The po...
I expect that this year, I will be able to cover something like 60 - 80% of my targeted annual expenses from dividends alone. This means tha...
In a previous article, I discussed that I will reach Financial Independence some time in 2018 . After I reach the dividend crossover point ,...
In a previous article titled, My Dividend Retirement Plan , I outlined the concept of the dividend crossover point. This happens when your d...
I view each investment I make as a seed that I plant for the long-term. Some seeds could turn into a tree that would provide fruit (dividen...
One of my largest holdings is McDonald’s (MCD). The company recently raised its quarterly dividend by 4.7% to 89 cents/share. McDonald's...
One of the biggest mistakes I ever made was not maxing out my 401 (k), IRA and HSA accounts between 2007 and 2012. As a result, I ended up ...
The more I learn and experience about investing, the more convinced I become that doing nothing is the best strategy for long-term success i...