One way to monitor dividend growth investments is by checking the weekly list of dividend increases. I also find helpful to monitor the annual raises for dividend growth stocks that are on my list for further research. It is great to see companies I have bought reward me with rising dividend income many years after I had made the decision to invest in the first place. With dividend growth investing, you do all the work in stock selection upfront. After that, a well-diversified portfolio should shower its owner with a growing stream of dividend income for decades.
Over the past week, several companies raised their quarterly dividends. The companies include:
Target Corporation (TGT) operates as a general merchandise retailer. The company boosted its quarterly dividend by 7.10% to 60 cents/share. This dividend champion has raised dividends for 49 years in a row. The ten year dividend growth rate is 19.60%/year. Target trades at 13.20 times forward earnings and yields 3.50%. Check my analysis of Target for more details.
UnitedHealth Group Incorporated (UNH) operates as a diversified health and well-being company in the United States. The company boosted its quarterly dividend by 25% to 60 cents/share. This dividend stock has raised dividends for 7 years in a row. The ten year dividend growth rate is 62.10%/year. Such a high rate of dividend growth is normal for companies in the first phase. UnitedHealth Group trades at 17.60 times forward earnings and yields 1.80%. Check my analysis of UnitedHealth for more details. This company has a lot of promise for patient long-term investors.
Casey’s General Stores, Inc. (CASY), together with its subsidiaries, operates convenience stores under the Casey’s General Store name in 14 Midwestern states, primarily Iowa, Missouri, and Illinois. The company boosted its quarterly dividend by 9.10% to 24 cents/share. This dividend achiever has raised dividends for 17 years in a row. The ten year dividend growth rate is 17.30%/year. Casey’s trades at 20.50 times forward earnings and yields 0.80%. I have been happy to own Casey's since I uncovered this stock in 2012. I believe that this company still has room for further growth.
FedEx Corporation (FDX) provides transportation, e-commerce, and business services in the United States and internationally. The company boosted its quarterly dividend by 60% to 40 cents/share. This dividend achiever has raised dividends for 15 years in a row. The ten year dividend growth rate is 11.20%/year. FedEx trades at 14.90 times forward earnings and yields 1%. I have not been a fan of Fedex or rival United Parcel Services (UPS) due to the lack of growth in earnings per share over the past decade.
C. R. Bard, Inc. (BCR), together with its subsidiaries, designs, manufactures, packages, distributes, and sells medical, surgical, diagnostic, and patient care devices worldwide. The company boosted its quarterly dividend by 8.30% to 26 cents/share. This dividend champion has raised dividends for 45 years in a row. The ten year dividend growth rate is 6.30%/year. C. R. Bard trades at 22.20 times forward earnings and yields 0.50%.
Sometimes, dividend increases also remind me of mistakes of omission I may have made. Mistakes of omission are situations where I have liked a certain company, but never really pulled the trigger on it due to stubbornness on my part. In retrospect it is easy to give myself a hard time, since I have over eight years of experience writing and analyzing dividend growth stocks. Some of the lessons I have learned after those years are easy see in retrospect.
One such mistake is C. R. Bard, which has always had a low current yield. However, the company has consistently been able to grow earnings and dividends, and delivered exceptional returns to its shareholders. Earnings per share went from $2.55 in 2006 and are scheduled to exceed $10 in 2016. The reason I never bought the stock was due to the low current yield. Please learn from my mistake and do not forget the "growth" part of the dividend growth strategy.
Full Disclosure: Long CASY, TGT, UNH
- How to read my weekly dividend increase reports
- Mistakes of Omission Can Be Costlier than Mistakes of Commission
- How I Manage to Monitor So Many Companies
- Dividend Champions - The Best List for Dividend Investors
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