Showing posts with label dividend increase. Show all posts
Showing posts with label dividend increase. Show all posts

Monday, May 2, 2016

Ten Dividend Growth Stocks That Keep Delivering For Their Shareholders

Dividend growth stocks are the gift that keeps on giving. I like the fact that most of the work in selecting good dividend growth stocks is upfront in analyzing those investments. What follows next is a lifetime of dividend payments, distributed every quarter, which grow over time. My goal is to assemble enough dividend growth stocks in my portfolio, in order to start generating income to pay for my retirement. My dividend portfolio is a silent worker in my household, who works 24/7 for me, and who dutifully shares all of their income with me. This income is completely passive in nature, and it does not require me to wake up at 6 am every day, shuffle TPS reports all day long, and make sure I do not forget to put a coversheet on those same reports.

I like watching dividend growth investing at work – this is when the companies I own keep rewarding me with a higher dividend check for a decision I made years ago. There were several notable companies which raised their dividends to shareholders. The list includes:

Monday, April 18, 2016

Unilever Rewards Long-Term Shareholders With Regular Dividend Raises

Unilever PLC (UL) operates in the fast-moving consumer goods market in the Africa, Americas, Asia Pacific, Europe, and Middle East. The company operates through Personal Care, Foods, Refreshment, and Home Care segments.

Unilever increased its quarterly dividend by 6% to 32.01 eurocents/share. This marked the 21st consecutive annual dividend increase for this international dividend achiever. Between 2005 and 2015, Unilever has managed to boost annual dividends from 66 eurocents/share to 1.19 Euro/share.

When evaluating foreign based companies, I focus on the dividend payment in the local currency, because this is what the board of directors has control over. I am familiar with some investors who focus on the payment in US dollars, and therefore reach incorrect conclusions about the length of dividend increases and might end up avoiding a quality company through no fault of its own.
That being said, the company has managed to increase dividends every single year since 1995. This means that this international dividend achiever has rewarded its shareholders with a dividend increase for 21 years in a row. You may want to check the dividend history going back to the early 1990s in this article.

Monday, April 11, 2016

Procter & Gamble Raises Dividends for 60th Year in a row

The Procter & Gamble Company (PG), together with its subsidiaries, manufactures and sells branded consumer packaged products worldwide. It operates through five segments: Beauty, Hair and Personal Care; Grooming; Health Care; Fabric Care and Home Care; and Baby, Feminine and Family Care.

The company raised its quarterly dividends to 66.95 cents/share. This marked the 60th consecutive annual dividend increase for this dividend king. There are only 18 dividend kings, which have raised dividends for more than 50 years in a row.

Unfortunately, the problem with Procter & Gamble’s dividend increase was that it was only 1%. This was the slowest dividend increase I could find going back 46 years. It shows that things are not going as well as expected. The company is in the middle of a turnaround, and it is trying to streamline its operations and focus on a smaller number of brands. A lot of operations are set to be sold off.
Throughout my experience as a dividend investor, I have learned that management usually bases their new dividend rates based on their business outlook. In the case of Procter & Gamble, it would seem that management sees the near term business outlook as grim. Since I hold a diversified dividend portfolio, the effect of P&G's slow dividend growth will be offset by other companies that grow dividends faster.

Monday, March 14, 2016

What should I do about slowing dividend growth?

In the past week, two of my holdings raised their quarterly dividends. Unfortunately, those dividend increases were pretty pathetic. I evaluated each of them, to determine what to do in this situation.

Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and sells consumer products worldwide. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The company announced a 2.60% increase in its quarterly dividend to 39 cents/share. This marked the 53rd consecutive annual dividend increase for this dividend king. The company has managed to increase annual dividends at a rate of 10.50%/year over the past decade.

I looked at previous dividend increases since 1977 for Colgate-Palmolive, in order to put the latest dividend increase in perspective. I noticed that in 1980, the company had a 3.70% dividend raise, after keeping distributions unchanged for over an year and a half. Throughout most of the 1980s, Colgate-Palmolive maintained a rate of slow dividend growth, particularly as it increased quarterly dividends every two years. Due to the fact that the dividend increase always occurred on the last quarter of the first year after the raise, the company still managed to boost annual dividends paid to shareholders, despite the fact that the quarterly dividend was actually hiked every two years. The slow dividend growth in the 1980s was driven by slow earnings growth at the time.

Monday, February 22, 2016

Ten Dividend Growth Stocks Rewarding Long Term Investors With a Raise

I invest in dividend growth stocks for the regular and growing stream of cash dividends. I monitor the list of dividend increases every week. There were several companies that raised dividends last week. I included only those that raised dividends last week and have raised dividends for at least a decade below:

Genuine Parts Company (GPC) distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Canada, Mexico, Australia, New Zealand, Puerto Rico, the Dominican Republic, and the Caribbean region. The company raised its quarterly dividend by 6.90% to 65.75 cents/share. This marked the 60nd consecutive annual dividend increase for the dividend king Genuine Parts Company. In the past decade, Genuine Parts Company has managed to increase its annual dividend by 6.90%/year. The stock is selling at 19.20 times forward earnings and yields 2.90%. I find the company to be an attractive opportunity for long-term investors at the moment. Check my analysis of Genuine Parts Company for more information.

The Coca-Cola Company (KO), a beverage company, manufactures and distributes various nonalcoholic beverages worldwide. The company raised its quarterly dividend by 6.10% to 35 cents/share. This marked the 54th consecutive annual dividend increase for the dividend king Coca-Cola. In the past decade, Coca-Cola has managed to increase its annual dividend by 9%/year. The stock is selling at 22.60 times forward earnings and yields 3.20%. While raising dividends for 5 decades is an impressive track record, I do not like the fact that earnings per share have not increased since 2012. Without further growth in earnings per share, dividend growth will be limited. Therefore, at this time I would not be interested in adding to Coca-Cola. I would continue holding the stock however, but allocate dividends elsewhere ( in my case, I am spending taxable dividends in 2016).

Tuesday, February 16, 2016

Eight Dividend Growth Stocks Rewarding Investors With a Raise

As part of my portfolio management process, I scan the list of dividend increases every week. I use this list in order to monitor dividend increases from companies I own, and also monitor the rate of dividend growth from companies I have on my watchlist.

Dividend payments on US stocks have been much more stable than capital gains over the past 70 years. Dividend payments from a diversified portfolio are more stable and more reliable than prices, which is why I have chosen to live off dividend income in retirement. I cannot tell you whether PepsiCo will sell for $50/share or for $150/share in 2016. However, I am reasonably certain that it will pay four dividends in 2016 for a total of $2.96/share. I want to avoid schemes where I have to dip into principal or slowly liquidate my portfolio in retirement and hope that I don’t outlive my shrinking asset base. Ironically, asset depletion strategies such as the four percent rule were tested using historical data where average dividend yields were around 4%, and dividend payments were either flat or rising 90% of the time. I say ironic, because the four percent rule effectively proved that living off dividends in retirement is a sustainable way to pensionize your nest egg in retirement. This is why my retirement plan focuses on the stable and growing cash dividend payments, and ignores stock price fluctuations.

In the past week, there were three companies in which I have a position, which rewarded their patient shareholders with a dividend raise. Those companies include:

Monday, February 8, 2016

Five Dividend Growth Stocks Rewarding Investors With Higher Dividends

Most of my money is invested in a portfolio of companies that have a track record of regular dividend increases. I have found that dividend payments in a diversified portfolio of equities is more stable than capital gains. This is why I have chosen to live off dividends in retirement. A cash dividend is a return on investment that is tangible and provides the investor with the positive reinforcement to keep holding onto that position. When you get paid to hold on to a stock every 90 days, and that payment goes up every year, it is much easier to ignore stock market fluctuations, and instead focus on fundamentals. After all, that cash dividend is a reminder that those quotes on your brokerage statement are real businesses.

One of my favorite things to look at is the list of dividend increases. I use it to check whether any companies I own are boosting dividends. I also use it to check for hidden dividend stars I may want to put on the list for further research. In this article, I have isolated those companies that raised dividneds in the past week by more than a token amount, which yielded at least 1%, and had managed to increase dividends for at least years in a row. The companies include:

3M Company (MMM) operates as a diversified technology company worldwide. The company raised its quarterly dividend by 8.40% to $1.11/share. This dividend king has managed to increase dividends for 58 years in a row. Over the past decade, it has managed to boost dividends by 9.30%/year. It sells for 18.70 times forward earnings and yields 2.90%. I believe that the company is attractively valued at the moment, though if prices fall down further, it could be an even better value. Check my analysis of 3M for more details.

Monday, December 21, 2015

Dividend Growth Investing At Work

Dividend growth investing is a wonderful strategy. Most of the work in selecting and purchasing an attractive security is done upfront. After that, the dividend investor is paid a growing dividend for work they may have done years ago. Of course, this dividend investor should regularly monitor his portfolio holdings, and dispose of any companies that no longer fit their goals of providing with a dependable dividend income to live off in retirement.

Over the past week, there were several dividend companies which increased their dividends. The companies include:

AT&T Inc. (T) provides telecommunications services in the United States and internationally. The company operates through two segments, Wireless and Wireline. The company increased its quarterly dividend by 2.10% to 48 cents/share. This dividend champion has managed to boost dividends for 32 years in a row. In the past decade, AT&T has managed to increase dividends by 3.90%/year. The stock is selling for 12.40 times forward earnings and yields 5.70%. Check my analysis of AT&T for more information about the company.

Monday, November 30, 2015

Four Notable Dividend Increases From Last Week

As a dividend investor, my goal is build a portfolio that regularly grows dividend income. This ensures that my dividend income maintains its purchasing power, without me having to add new funds. It is little surprise that I regularly monitor the lists of dividend growth stocks for dividend increases every single week. This is a fun and easy way to observe how my investments are doing. Checking up on dividend increases also helps me in uncovering hidden dividend gems that I may have to add to my list for further research.

Over the past week, there were several notable dividend champions that rewarded their shareholders with a dividend increase. I have a stake in the first two, while the latter two are companies I have on my list for monitoring purposes. The companies include:

McCormick & Company (MKC) manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry worldwide. It operates through two segments, Consumer and Industrial. The company raised its quarterly dividend by 7.50% to 43 cents/share. This marked the 30th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 10.20%/year. The company is overvalued at 24.60 times expected earnings and yields 2%. I would be interested in adding to the stock on dips below 20 times earnings. Check my analysis of McCormick.

Monday, October 26, 2015

Four Dividend Growth Stocks Rewarding Investors with a Raise

I invest in dividend growth stocks for two reasons; the predictability of dividend income and predictability of dividend increases. I usually have a very good handle on the payment schedule of each dividend payment. I also know when to expect a dividend increase from each company I own. Most companies raise dividends once an year. A few select ones manage to boost dividends to shareholders more often than that. Either way, since I started tracking my organic dividend growth from my portfolio, the raises have been much higher than the raises I receive from my day job ( where I spend 40 – 60 hours/week). It is a very nice feeling to receive a raise for an investment that I may have done several years ago, without really having to do any subsequent work on it.

Monitoring the rate of change in dividend payments is one of the things I look for when I monitor dividend growth stocks. A company that is experiencing short-term turbulence and still manages to deliver a substantial dividend increase signals confidence in the business. A company that tells investors that things are going to turn around quickly, but raises dividends by a token amount usually raises red flags in my monitoring process.

Over the past week, there were several notable dividend increases from companies I own:

Friday, September 18, 2015

Two Recent Dividend Increases from my Dividend Machine

Two of the companies I own announced their intentions to hike their dividends. As a dividend growth investor, this is always good news. The companies included:

Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products.

The company raised its quarterly dividend by a paltry 2% to $1.02/share. This was the lowest rate of increase since the spinoff in 2008. It was much lower than the five year dividend growth rate of 12%/year. It was disappointing to many investors. This marked the 7th consecutive annual dividend increases nevertheless. The new yield is close to 5%.

As I mentioned in my analysis of the company however, this should not have been unexpected given the lack of earnings growth in the past few years and the rising dividend payout ratio. While I am bullish on the company for the long-term, I cannot ignore the data that has been showing me that things are not going according to plan. I will keep holding on to this position, because I believe that management will ultimately turn things around. Of course, in the meantime, I will redirect dividends elsewhere.

Monday, August 31, 2015

Altria Delivers Another Strong Dividend Hike

Last week, anywhere I checked on the internet, everyone was focused on stock market volatility. The fear is that we might be entering a new bear market. As a long term dividend investor I don’t really care much about things like that.

I care about selecting quality companies which can deliver results in any environment. I view declines in stock prices as opportunities to buy more shares at a discount.

The sad thing is that few managed to cover the news that Altria (MO) just raised its dividends. The company has been raising dividends for over 4 decades, and is still not done growing earnings and paying larger dividends to its shareholders. I find it impressive when a company can afford to be boring today, and just keep calm and carry on with its proven business model. As an investor, I like boring and predictable, particularly when I am paid in cash to hold on to that investment. Check my analysis of Altria for more details on the company.

Altria raised its quarterly dividend by 8.70% to 56.50 cents/share. This dividend champion has raised dividends for 46 years in a row. The ten year dividend growth rate is 11.60%/year. Given the fact that shares have been consistently undervalued over the past 60 years, the high dividend growth and the consistently high dividend yield, it is no surprise that Altria has been the best performing stock in the S&P 500 since 1957.

Monday, July 20, 2015

Six Dividend Growth Stocks That Keep Delivering For Their Shareholders

Dividend growth stocks are the gift that keeps on giving. I like the fact that most of the work in selecting good dividend growth stocks is upfront in analyzing those investments. What follows next is a lifetime of dividend payments, distributed every quarter, which grow over time. My goal is to assemble enough dividend growth stocks in my portfolio, in order to start generating income to pay for my retirement. My dividend portfolio is a silent worker in my household, who works 24/7 for me, and who dutifully shares all of their income with me. This income is completely passive in nature, and it does not require me to wake up at 6 am every day, shuffle TPS reports all day long, and make sure I do not forget to put a coversheet on those same reports.

I like watching dividend growth investing at work – this is when the companies I own keep rewarding me with a higher dividend check for a decision I made years ago. There were several notable companies which raised their dividends to shareholders. The list includes:


Monday, July 13, 2015

Six Confident Dividend Stocks Giving Shareholders a Raise

I love it when the stock market goes on sale, like it has been so far in the past two - three weeks. For aspiring dividend growth investors, this means that we are purchasing future income at discounted prices. When I acquire ownership stakes at discounted prices in quality companies like the ones I discussed last week, I get closer and closer to my goal of reaching my dividend crossover point sooner.

I also like it when companies I purchased long time ago keep rewarding me with a higher dividend payment, year after year. It is amazing that just because I have had the foresight to identify and purchase a quality dividend growth stock, I end up receiving a passive income stream, which grows above the rate of inflation.

In the past week, there were several companies that hiked dividends to their loyal shareholders. I isolated several of those which had raised distributions for at least five years in a row to present here:

Monday, June 15, 2015

Seven Dividend Growth Stocks to Consider for Further Research

One of my favorite aspects of dividend growth investing is the ability to receive more passive dividend income, simply because I made the right decision years ago. It is amazing that simply because I had the foresight to identify quality dividend growth stocks, I get paid more with the passing of every single year. What is even more amazing is the fact that the rate of dividend growth is usually higher than the rate of salary increases I receive at my day job. I work hard to get my work done timely, and then receive a raise that pretty much keeps up with inflation. With dividend growth companies on the other hand, my money is working hard for me, and reward me with consistent dividend increases.

There were several dividend growth stocks, which announced that they are increasing their distributions to shareholders. I included the ones I own and the ones I find interesting for further research below:


Monday, June 8, 2015

Lowe’s Delivers Consistent Dividend Growth to Investors

Lowe’s Companies, Inc. (LOW) operates as a home improvement retailer. Lowe’s operates approximately 1,840 home improvement and hardware stores in North America. The company also sells its products through online sites comprising Lowes.com, Lowes.ca, and ATGstores.com, as well as through mobile applications. I last analyzed Lowe's a couple of years ago, so I decided to do a quick update on it.

Lowe’s recently announced that it was raising its quarterly dividend by 21.70% to 28 cents/share. This marked the 53rd consecutive annual dividend increase for this dividend king. As we have discussed the dividend kings before, this is an elite group of companies that have raised distributions for at least 50 years in a row. It is a rare feat when a company has managed to grow dividends every year for over half a century. It is an even rarer accomplishment when that company is firing up on all cylinders, and keep growing dividends at the rate of Lowe’s.

The ten year dividend growth rate for Lowe’s is an impressive 25%/year. The company managed to grow earnings per share by 7.10%/year. Therefore, a large reason behind the high dividend growth is due to expansion in the dividend payout ratio. However, you should not forget that the past decade also included one of the worst housing crises in the US and the recession of 2007 – 2009. One of the main reasons I picked up Lowe’s after the housing crisis is because management kept raising the dividend. When they raised the dividend, this showed me that they had confidence in the long-term sustainability of the business.

Competitor Home Depot (HD) on the other hand stopped raising dividends in 2008.

As I mentioned above, earnings per share grew at a respectable 7.10%/year over the past decade, which included a terrible housing crisis. Lowe’s earned $2.71/share in 2015. The company is expected to earn $3.29/share in 2016 and $3.95/share in 2017. Lowe’s also has had an aggressive share buyback policy over the past decade. As a result, the company has reduced its share count from 1.606 billion shares in 2006 to 990 million shares in 2015. While I would prefer special dividends to share buybacks as a stockholder, I would get what I can.

The company’s fortunes are tied to the fortunes of the housing market in North America. As the US housing market bounces back, this could translate into more traffic to home improvement stores, and to high growth in same store sales. As the housing market improves, there will be more remodeling, and more need for store trips to Lowe’s or Home Depot to accommodate for that remodeling. An up-tick in new home construction could also provide another source of growth. The company focuses on do-it-yourself, do it for me customers as well as commercial customers.

Research shows that renovations tend to accelerate for homes older than 25 years. According to latest Census, 71% of homes in the US have been built more than 25 years ago. As a result, homeowners will be much more likely to participate in do it yourself home renovation and upkeep projects, in order to try to increase the value of their home, to make it more marketable or just to make it a better place to live.

A further source of growth will be the opening of new stores. Unfortunately, the level of new store openings has slowed down to 15 – 20/year. In the long-term, the company can capture growth by expanding internationally, beyond North America. This could be an interesting development to check. Currently, it has operations in US, Canada and Mexico, as well as an Australian Joint-Venture with Woolworths where Lowe’s has a one-third share of the ownership. I like the fact that the company is only interested in expanding in international markets after intense analysis, and only if their research determines that expansion will support compelling long-term returns.

Being the second largest home improvement retailer, Lowe’s also has scale and strong purchasing power. This bargaining power translates into lower costs, and higher profits. Another important characteristic for Lowe’s and competitor Home Depot is the fact that their knowledgeable staff can deliver quality level of service, and the knowledge to address the specific customer needs. This is something that is difficult to maintain in a purely online shopping experience. The company is aiming to enhance its relevance to customers through omni-channel retailing and differentiate itself through better customer experiences.

The company is continued focus on developing its omni-channel retail capabilities. Thus it is ensuring Lowe's meets customer needs whenever and wherever they choose to engage with the company, whether in store, in home and on the job, online and through contact centers. The company is also focused on further building customer experience design capabilities that differentiate Lowe's from other home improvement providers, improving its offering for Pro customers and continuing to improve productivity and profitability.

Currently, the stock is overvalued at 21.20 times forward earnings and a current yield of 1.60%. While I do not believe that the company is a buy at present levels, it is definitely a hold. I think it is important to keep companies purchased at attractive prices, and to monitor them at least once every 12 – 18 months. I do not subscribe to the theory that I should sell a company, merely because the price is a little on the high side, and buy something “cheaper”. I believe holding on to a company like Lowe’s, which grows intrinsic value over time is a wise decision. However, wise investors will know that Lowe’s is exposed to the cyclical nature of the housing market, which is why its results are not going to look pretty during the next recession. This would be the time to scoop up more shares of the retailer, provided the fundamentals are still intact.

Full Disclosure: Long LOW

Relevant Articles:

Let dividends do the heavy lifting for your retirement
Dividend Growth Stocks Increase Intrinsic Value Over Time
Dividend Kings List for 2015
Price is what you pay, value is what you get
Rising Earnings – The Source of Future Dividend Growth

Monday, May 18, 2015

Four Companies Growing Future Yields With Increased Dividends

I try to assemble my dividend portfolio by mixing three distinct types of dividend growth stocks. The first group consists of higher yielding companies which have lower dividend growth expectations. The second group includes companies in the sweet spot, which have average yields anywhere around 2.50% - 4% and average to above average dividend growth. The third group includes companies which have lower current yields, but offer the possibility of high dividend growth. When combining expected dividend growth with current yields, I determine the type of company I am reviewing, and also decide whether it is worth pursuing at some point in the future. I uncover those companies by screening the list of dividend champions or by reviewing the list of dividend increases for the week. I also use my process of reviewing recent dividend increases to monitor the performance of any companies I already own.

There were five companies last week I decided to review briefly in this blog post. I focused on the companies with at least a ten year streak of dividend growth and the right mix between dividend yield and dividend growth:

The Clorox Company (CLX) manufactures and markets consumer and professional products worldwide. The company operates in four segments: Cleaning, Household, Lifestyle, and International. The company raised its quarterly dividend by 4% to 77 cents/share. This marked the 38th consecutive annual dividend increase for this dividend champion. The current rate of dividend increase is lower than the ten year average raise of 10.40%/year.  The company had a disappointing dividend raise in 2014 as well. The last time it had two years of dividend growth below 4%/year was in 2005 and 2006. Subsequently, the dividend is up by 165% since 2005. The stock is overvalued at 24.20 times forward earnings and yields 2.90%. Given the low recent growth, and overvaluation, I would not consider adding to my position in the company. I last analyzed Clorox in early 2014. I would refresh it after full year earnings are released in the latter part of 2015.

The Southern Company (SO), together with its subsidiaries, operates as a public electric utility company. It is involved in the generation, transmission, and distribution of electricity through coal, nuclear, oil and gas, and hydro resources in the states of Alabama, Georgia, Florida, and Mississippi. The company raised its quarterly dividend by 3.30% to 54.25 cents/share. This marked the 16th consecutive annual dividend increase for this dividend achiever. The latest dividend increase was slightly lower than the ten year average dividend growth of 3.90%/year. The high current yield compensates for the slow rate of dividend growth however. The stock is attractively valued at 15.40 times forward earnings and yields 5%. I will add the stock to my list for further research.

FactSet Research Systems Inc. (FDS) provides integrated financial information and analytical applications to investment community in the United States, Europe, and the Asia Pacific. The company raised its quarterly dividend by 12.80% to 44 cents/share.This marked the 17th consecutive annual dividend increase for this dividend achiever. The latest dividend increase was slightly lower than the ten year average dividend growth of 23.80%/year. The stock is overvalued at 29.50 times earnings and yields 1.10%. This is the type of company in the initial stage of dividend growth that can deliver high future yields on cost for patient dividend investors. I will monitor the situation, but would like to acquire the stock at 20 times earnings or less. It is on my list to post an analysis on in the foreseeable future.

Franklin Electric Co., Inc. (FELE), together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates in two segments, Water Systems and Fueling Systems. The company raised its quarterly dividend by 8.30 to 9.75 cents/share. This marked the 23rd consecutive annual dividend increase for this dividend achiever. The latest dividend increase was in line with the ten year average dividend growth rate of 8.40%/year. The stock is fully valued at 19.80 times earnings and yields a low 1.10%. I have heard interesting things about the company, which is why I am adding it to my list for further research.

Full Disclosure: Long CLX

Relevant Articles:

Types of dividend growth stocks
Three stages of dividend growth
Clorox (CLX) Delivers a Disappointing Dividend Increase
How to read my weekly dividend increase reports
Do not despise the days of small beginnings

Monday, May 11, 2015

Dividend Stocks Rewarding Patient Investors With a Raise

My goal is generate a sufficient stream of dividends that exceeds my expenses. In order to achieve that, I try to identify companies that have a track record of consistent dividend increases for further analysis. My analysis tries to determine if there is a margin of safety in the dividend and that this dividend is supported by earnings. I generally want a company where earnings and dividends grow hand in hand, though I am also aware that this is dependent on the stage the company is in. It is also helpful to determine if earnings can continue growing over time. When earnings are growing, a company can afford to grow dividends easily, and will get more valuable to investors in the process. The next important step in the process is purchasing that right quality company at the right price. Even the best dividend stock is not worth overpaying for. This process has helped me since I started my dividend investing journey in 2008.

The best positive confirmation that my analysis is working is when a company I own keeps increasing dividends years after I have purchased it. I monitor those dividend increases weekly for companies I own and companies I monitor. A few companies to note include:

PepsiCo, Inc. (PEP) operates as a food and beverage company worldwide. The company raised its quarterly dividend by 7.30% to 70.25 cents/share. This marked the 44th consecutive annual dividend increase for this dividend champion. In the past decade, PepsiCo has managed to boost its dividends by 12.50%/year. The stock is overvalued at 21.40 times earnings and yields 2.90%. Check my analysis of PepsiCo.

Occidental Petroleum Corporation (OXY) engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing and Other. The company raised its quarterly dividend by 4.20% to 75 cents/share. This marked the 13th consecutive annual dividend increase for this dividend achiever . In the past decade, Occidental Petroleum has managed to boost its dividends by 17.70%/year. The stock is overvalued at 70 times forward 2015 earnings of $1.11/share and yields 3.80%. Check my analysis of Occidental Petroleum.

Cardinal Health, Inc. (CAH), a healthcare services company, provides pharmaceutical and medical products and services in the United States and internationally. The company operates in two segments, Pharmaceutical and Medical. The company raised its quarterly dividend by 13% to 38.70 cents/share. This marked the 19th consecutive annual dividend increase for this dividend achiever. In the past decade, Cardinal Health has managed to boost its dividends by 31.10%/year. The stock is fully valued at 19.80 times earnings and yields 1.80%. When I analyzed the company in 2010, I didn’t like what I saw, because earnings per share had been flat for several years. It is good to evaluate mistakes of omission, in order to improve method for stock selection.

Buckeye Partners, L.P. (BPL) owns and operates liquid petroleum products pipeline systems in the United States. The master limited partnership operates through four segments: Pipelines & Terminals, Global Marine Terminals, Merchant Services, and Development & Logistics. The partnership raised its quarterly distribution to $1.15/unit. Buckeye Partners has raised distributions for 20 consecutive years. The MLP is selling for 18.10 times 2014 distributable cash flow per unit and yields 5.60%. I will add it to my list for further research, though the distribution coverage seems thin.

Spectra Energy Partners, LP, (SEP) through its subsidiaries, engages in the transportation of natural gas through interstate pipeline systems, and the storage of natural gas in underground facilities in the United States. The partnership raised its quarterly distribution to 60.125 cents/unit. Spectra Energy Partners has raised distributions for 8 consecutive years. The MLP is selling for 14.50 times 2014 distributable cash flow per unit and yields 4.50%. I would add this MLP to my list for further research.

Full Disclosure: Long PEP

Relevant Articles:

How to read my weekly dividend increase reports
The Importance of Consecutive Dividend Increases in Stock Selection
Margin of Safety in Dividends
Margin of Safety in Financial Independence
How to monitor your dividend investments

Monday, May 4, 2015

Five Companies Showering Investors With More Cash

I expect that sometime around 2018, my forward dividend income will exceed my monthly expenses. I find dividends to be a more stable and dependable source of income, than capital gains. If I choose to live off dividends, and not have a job or other sources of income by the end of this decade, I want to make sure that I do not outlive my nest egg.

I purchase shares in companies that pay me to hold them and will increase those payments over time. When a company I hold rewards me with more cash, this shows me that my strategy works in achieving its expected goals and objectives. The news that a company I own raised dividends serves as a positive reinforcement tool.

In the past week, there were several companies that raised dividends. I have highlighted several which have managed to boost distributions for at least five years in a row. I have also focused only on those I already own, or find interesting for further research. The companies include:

Exxon Mobil Corporation (XOM) explores for and produces crude oil and natural gas in the United States, Canada/South America, Europe, Africa, Asia, and Australia/Oceania. The company boosted its quarterly dividend by 5.80% to 73 cents/share. This marked the 33th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 9.80%/year. Shares are slightly overvalued at 22.30 times forward earnings and a yield of 3.30%. I would consider the stock on dips below $80/share. Check my analysis of Exxon Mobil.

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. The company boosted its quarterly dividend by 18.20% to $1.30/share. This marked the 20th consecutive annual dividend increase for this dividend achiever. The ten year dividend growth rate is 19.80%/year. Shares are attractively valued at 10.90 times forward earnings and a yield of 3%. I find the stock attractively valued, and might consider adding shares to my position there. Check my analysis of IBM.

W.W. Grainger, Inc. (GWW) operates as a distributor of maintenance, repair, and operating (MRO) supplies; and other related products and services that are used by businesses and institutions primarily in the United States and Canada. The company boosted its quarterly dividend by 8.30% to $1.17/share. This marked the 44th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 18.20%/year. Shares are attractively valued at 19.80 times forward earnings and a yield of 1.90%. I would be interested in adding to my position in the stock on weakness. Check my analysis of W.W. Grainger.

Wells Fargo & Company (WFC) provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. The company raised its quarterly dividend from 35 to 37.50 cents/share. This marked the fifth consecutive annual dividend increase. The stock is attractively valued at 13.30 times forward earnings and yields 2.70%. Check my analysis of Wells Fargo for more details. Wells Fargo is an example of a situation where my assessment was wrong in May 2013, but I changed my mind after reviewing my analysis a couple of months later. I should refresh my analysis on the company.

American Water Works Company, Inc. (AWK), through its subsidiaries, provides water and wastewater services in the United States and Canada. The company operates through two segments, Regulated Businesses and Market-Based Operations. The company boosted its quarterly dividend by 9.70% to 34 cents/share. This marked the 8th consecutive annual dividend increase for American Water Works. The five year dividend growth rate is 8.10%/year. Currently, the stock is selling at 20.90 times forward earnings and yield 2.50%. The stock seems overvalued at present, and I need to add it to my list for further research.

Full Disclosure: Long XOM, IBM, GWW, WFC

Relevant Articles:

My Dividend Goals for 2015 and after
How to read my weekly dividend increase reports
Buying Quality Companies at a Reasonable Price is Very Important
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Monday, April 27, 2015

Four Quality Dividend Machines Hiking Distributions

Over the past week, there were four quality dividend paying companies, which announced that they are raising dividends for their shareholders. As a long-term shareholder, I like it when I am essentially paid to hold companies. I like it even better when that company I own regularly increases the amount of cash they send my way. I also view the near term rate of change in dividend hikes as a management indication about their expectations for earnings growth. One of the easiest ways for a time-starved investor like myself to monitor those dividend hikes on companies I own is my broker Interactive Brokers. I receive notifications about dividend payments that were just approved, and quarterly results that are about to be released.

In the past week, there were four companies that raised dividends, which also attracted my attention. I have shares in the first three. The last one is a company I have been monitoring.

Unilever (UL) increased its quarterly dividend by 6% to 30.20 eurocents/share. This marked the 20th consecutive annual dividend increase for this international dividend achiever. The ten year dividend growth rate is 6.20% /year. The stock slightly overvalued at 21.80 times forward earnings and yields 2.90%. Check my analysis of Unilever.

Ameriprise Financial, Inc. (AMP), through its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. The company raised its quarterly dividends by 15.50% to 67 cents/share. This marked the tenth consecutive dividend increase for this dividend achiever. The five year annual dividend growth is 27.20%/year, which is normal for companies in the initial phases of dividend growth. The shares are selling for 13.10 times forward earnings and yield 2.10%. Check my analysis of Ameriprise Financial. I decided to make a small addition to my position last week.

Johnson & Johnson (JNJ), together with its subsidiaries, researches and develops, manufactures, and sells various products in the health care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Devices. The company raised its quarterly dividend by 7.10% to 75 cents/share. This marked the 53rd consecutive annual dividend increase for this dividend king. The ten year dividend growth is 9.70%/year. The shares are selling for 16.50 times forward earnings and yield 3%. Unfortunately, Johnson & Johnson is one of my largest positions, which is why I may refrain from putting more capital there. Check my analysis of Johnson & Johnson.

Costco Wholesale Corporation (COST), together with its subsidiaries, operates membership warehouses. The company raised its quarterly dividend by 12.70% to 40 cents/share. This marked the 12th consecutive annual dividend increase for this dividend achiever. The ten year dividend growth rate for Costco is 16.40%/year. The stock is over valued at 28.30 times forward earnings and yield 1.10%. I have been following Costco for several years and really like the business, but I never really saw a good valuation to initiate a position in it.

Full Disclosure: Long AMP, JNJ, UL

Relevant Articles:

How to read my weekly dividend increase reports
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