Monday, January 8, 2018

24 Dividend Stocks For 2018

I believe that the list of Dividend Champions, Contenders and Challengers is the most complete list of US dividend growth stocks available today. As part of my process, I screen the list of dividend champions regularly. I have a custom built portfolio in Yahoo! Finance, which includes all dividend champions. Using information from Yahoo Finance, Company Annual Reports and David Fish’s excellent site, I come up with all the data I need for my screening purposes.

In order to come up with a list of companies for further research, I used the following entry criteria:

1) A ten year minimum for annual dividend increases ( being a champion already helps in pre-qualifying this criteria)
2) Forward P/E ratio below 20
3) Dividend Payout Ratio below 60%
4) Companies that have managed to grow earnings per share over the past decade
5) Companies which have achieved a more than nominal dividend growth over the past decade

I applied those basic criteria on the Dividend Champions list, maintained by David Fish and came up with the following group of companies for further research:



Symbol
Name
Consecutive Years of Annual Dividend Increases
Dividend Yield
Share Price
 Forward P/E
Forward Dividend Payout Ratio
AFL
AFLAC Inc.
35
1.92%
89.73
     13.27
25.44%
BDX
Becton Dickinson & Co.
46
1.31%
222.08
     20.43
26.86%
CBSH
Commerce Bancshares
49
1.52%
56.09
     20.32
30.80%
CBU
Community Bank System
25
2.41%
53.88
     20.80
50.19%
CPKF
Chesapeake Financial Shares
26
1.27%
30
     14.56
18.45%
CSVI
Computer Services Inc.
46
2.44%
47.1
     19.63
47.92%
CTBI
Community Trust Banc.
37
2.70%
47.75
     16.93
45.74%
EV
Eaton Vance Corp.
37
1.97%
58.34
     18.94
37.34%
GD
General Dynamics
26
1.60%
204.7
     20.82
33.37%
JNJ
Johnson & Johnson
55
2.31%
141.71
     19.47
45.05%
LEG
Leggett & Platt Inc.
46
2.92%
47.9
     19.31
56.45%
LOW
Lowe's Companies
55
1.60%
94.74
     20.73
33.26%
MDT
Medtronic plc
40
2.08%
85.54
     17.93
37.32%
PNR
Pentair Ltd.
42
1.90%
72.66
     20.58
39.09%
PPG
PPG Industries Inc.
46
1.39%
118.92
     20.19
28.01%
RPM
RPM International Inc.
44
2.20%
54.5
     18.86
41.52%
SCL
Stepan Company
50
1.03%
79.41
     18.30
18.89%
SRCE
1st Source Corp.
30
1.47%
50.4
     19.53
28.68%
THFF
First Financial Corp.
30
2.20%
45.55
     16.81
36.90%
TMP
Tompkins Financial Corp.
31
2.23%
80.67
     18.17
40.54%
TROW
T. Rowe Price Group
31
2.10%
107.23
     17.90
37.56%
UGI
UGI Corp.
30
2.04%
47.55
     18.79
38.34%
UMBF
UMB Financial Corp.
26
1.42%
71.95
     19.71
27.95%
WBA
Walgreens Boots Alliance Inc.
42
2.08%
72.92
     13.07
27.24%

These are not automatic buy recommendations by any shape or form. The intelligent dividend investor should use that screen only as a first step for their process. It is merely a step to narrow down a large list of companies down to a more manageable level.

The additional review should entail analyzing each company in more detail, and determining if the trends in earnings and dividends will continue into the future.

This evaluation is more art than science, and is highly subjective. Investing is an endeavor where two perfectly logical and rational individuals can have the same data, and still reach starkly different conclusions. After all, there is a buyer and a seller behind every stock transaction - and they both consider themselves smarter than the other party!

This decision is further complicated by existing stock holdings. For example, an investor who finds Walgreens Booth Alliance to be the best value on the list, may still refrain from investing in the company, if they already own too much of it.

I believe that success in dividend investing comes down to regular investing, and having a long-term buy and hold mindset. Most money is made by slowly building a diversified portfolio of quality companies by putting money to work every single month, and then sitting tight and letting the power of compounding do the heavy lifting for you.

What companies are you considering right now? Please feel free to write to me at dividendgrowthinvestor at gmail dot com

Relevant Articles:

Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
How to value dividend stocks
How to become a successful dividend investor
What I learned from analyzing my investment record

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