I review the list of dividend increases as part of my monitoring process. This exercise is one of the steps to check on existing holdings. It's also one of the steps to check on companies for further research. The data points I illustrate for each company below are the types of data points I use to review companies.
I typically focus my attention on companies that have managed to grow dividends for at least ten years in a row. However, a long streak of consecutive annual dividend increases is just a first step, that merely puts a company on my review list. The next step involves reviewing the most recent dividend increase with the historical record - 5 or 10 years. This is also followed by a review of earnings, payout ratios and other fundamentals, in an effort to determine the likelihood of the dividend growing in the future, and the relative safety of said dividend.
Over the past week, there were four companies that announced dividend hikes. Each of these companies has also managed to increase dividends for at least ten years in a row. The companies include:
Avient Corporation (AVNT) operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials.
Avient raised quarterly dividends by 1.90% to $0.275/share.This is the 15th consecutive year of dividend icnreases for this dividend achiever.
Over the past decade, the company has managed to grow dividends at an annualized rate of 10.44%.
Between 2015 and 2024, the company managed to grow earnings from $1.65/share to $1.86/share.
The company is expected to earn $2.80/share in 2025.
The company is selling at 10.85 times forward earnings a a dividend yield of 3.62%.
The lack of earnings growth explains the slow dividend raises. While P/E is low and the yield is high, the expected returns are going to be low, until earnings per share growth accelerates. At this pace dividend payments will not keep up with inflation.
Northwest Natural Holding Company (NWN) provides regulated natural gas distribution services to residential, commercial, and industrial customers in the United States.
Northwest Natural raised quarterly dividends by 0.50% to $0.4925/share. This is the 70th consecutive year of dividend increases for this dividend king. Over the past decade, the company has managed to grow dividends at an annualized rate of 0.53%.
Between 2015 and 2024, the company managed to grow earnings from $1.96/share to $2.03/share.
The company is expected to earn $2.91/share in 2025.
The company is selling at 15.32 times forward earnings a a dividend yield of 4.40%.
The lack of earnings growth explains the very slow rate of dividend increases. While the company does have a long and impressive streak of dividend increases, the rates of increase are nominal, and do not keep up with inflation. As a result, the expected returns are going to be limited in the future to dividend yield at start of investment. Unless earnings increase in the future, dividend growth will be nominal, until the dividend payout ratio increases by too much, at which point we may get a higher risk of a dividend cut. One could potentially expect higher returns if they can find the stock at a much higher starting yield.
Lockheed Martin Corporation (LMT) is an aerospace and defense company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company operates through four segments: Aeronautics; Missiles and Fire Control (MFC); Rotary and Mission Systems (RMS); and Space.
Lockheed Martin increased quarterly dividends by 4.50% to $3.45/share. This is the 23rd consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 8.20%.
This is also the smallest dividend increase in 23 years as well.
Between 2015 and 2024, the company managed to grow earnings from $11.62/share to $22.39/share.
The company is expected to earn $21.92/share in 2025.
The company is selling at 23.04 times forward earnings a a dividend yield of 2.73%.
The rate of dividend growth decelerating is signaling some uncertainty from management. While the stock seems fairly priced, and has managed to grow earnings in the past at a very good rate, the future seems a little cloudy at this point.
THOR Industries, Inc. (THOR) designs, manufactures, and sells recreational vehicles (RVs), and related parts and accessories in the United States, Germany, rest of Europe, Canada, and internationally.
Thor increased the quarterly dividend by 4% to $0.52/share. This is the 16th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 7.30%.
Earnings per share went from $4.89 in 2015 to $4.87 in 2024.
The company is expected to earn $4.08/share in 2025.
The company is selling at 24.35 times forward earnings a a dividend yield of 2.10%.
We have another dividend increaser that has been unable to grow earnings over the past decade, which means that future dividend growth is decelerating. Unfortunately, there is a natural ceiling as to how long a company can grow dividends.
Relevant Articles:
- Five Dividend Growth Stocks Raising Dividends Last Week
