Sunday, May 22, 2022

Ten Dividend Growth Stocks Rewarding Shareholders With a Raise

I review the list of dividend increases each week as part of my monitoring process. This helps me in reviewing companies I already have a position in. This process also helps in uncovering hidden gems, by identifying companies for further research.

In general, I look for companies that have managed to grow dividends for at least a decade. I also look for companies that have managed to grow earnings and dividends, in order to ensure that future dividend growth is on a stable footing. It is helpful to review trends in earnings, dividends, payout ratios over the past decade, in order to find out companies that can deliver in the future and have adequately covered distributions. 

Last but not least, these companies are never a recommendation to buy; just a list of companies for further research. Not all companies are worthy of research, as some have uninspiring prospects. Others may have great businesses, which may be expensive however. 

Valuation is part art, part science. You can read more here on how I try to value companies; this process involves trade-offs between dividend growth and dividend yield, along with stability of the business model over time and through the ups and downs of the typical economic cycle.

Over the past week, there were ten companies that raised dividends. These companies have managed to grow dividends for at least a decade. The companies include:


American Tower Corporation (AMT) is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of approximately 219,000 communications sites. 

The REIT increased quarterly dividends by 2.10% to $1.43/share. American Tower has increased dividends every single quarter since 2012. As a result, the new distribution is actually 12.60% higher than the distribution paid during the same time last year.

This dividend achiever has increased dividends for 11 years in a row. Over the past decade, American Tower has hiked dividends at an annualized rate of 30.50%. The five year average is at 18%.

American Tower sells for 23.42 times forward FFO and yields 2.34%.

Chubb Limited (CB) provides insurance and reinsurance products worldwide. 

The company raised quarterly dividends by 3.70% to $0.83/share. This marked the twenty-ninth consecutive annual increase in the company's dividend. 

The raise is consistent with the five year average of 3%/year. Over the past decade however, this dividend aristocrat had managed to boost annual dividends by 8.80%/year.

The stock is selling for 13.45 times forward earnings and yields 1.63%

HNI Corporation (HNI) manufactures and sells workplace furnishings and residential building products primarily in the United States. The company operates through two segments, Workplace Furnishings and Residential Building Products. 

HNI increased quarterly dividends by 3.20% to $0.32/share. This marks the 12th year of consecutive annual dividend increases for this dividend achiever.

The company has managed to grow dividends at an annualized rate of 3%/year over the past decade.

The stock is selling at 13.60 times forward earnings and yields 3.49%.

Leggett & Platt (LEG) designs, manufactures, and markets engineered components and products worldwide. It operates through three segments: Bedding Products; Specialized Products; and Furniture, Flooring & Textile Products. 

Leggett & Platt increased quarterly dividends by 4.80% to $0.44/share. Leggett & Platt (LEG) has increased its annual dividend for 51 consecutive years and possesses one of the highest yields among the Dividend Kings.

Over the past decade, the company has managed to grow dividends at an annualized rate of 4.20%.

The stock is selling for 13.25 times forward earnings and yields 4.76%.

Lennox International Inc. (LII) designs, manufactures, and markets a range of products for the heating, ventilation, air conditioning, and refrigeration markets in the United States, Canada, and internationally. It operates through three segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. 

The company raised quarterly dividends by 15.20% to $1.06/share. This is the 13th year of consecutive annual dividend increases for this dividend achiever. The company has managed to grow dividends at an annualized rate of 17.20%/year over the past decade.

The stock sells for 14.71 times forward earnings and yields 2.04%.

Mid America Apartment Communities (MAA) is a real estate investment trust, or REIT, focused on delivering full-cycle and superior investment performance for shareholders through the ownership, management, acquisition, development and redevelopment of quality apartment communities in the Southeast, Southwest, and Mid-Atlantic regions of the United States. 

The company increased quarterly dividends by 14.90% to $1.25/share. This is the 12th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 5%.

The REIT sells for 21.61 times forward FFO and yields 2.85%.

Monro, Inc. (MNRO) provides automotive undercar repair, and tire sales and services in the United States. 

The company raised quarterly dividends by 7.70% to $0.28/share. This is the 17th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 11.20%.

The stock is selling for 24.31 times forward earnings and yields 2.89%.

NACCO Industries, Inc. (NC) engages in the natural resources business. The company operates through three segments: Coal Mining, North American Mining, and Minerals Management. 

The company raised quarterly dividends by 5.10% to $0.2075/share. This is the 37th consecutive annual dividend increase for this dividend champion. Over the past decade, the company has managed to grow dividends at an annualized rate of 13.90%/year.

The stock sells for 7.31 times earnings and yields 1.60%.

Northrop Grumman Corporation (NOC) operates as an aerospace and defense company worldwide. 

The company raised quarterly dividends by 10.20% to $1.73/share. 

“Northrop Grumman remains focused on deploying our capital in value-creating ways for our customers and investors,” said Kathy Warden, chair, chief executive officer and president. “We are investing in our business to support our growth and we continue to provide a competitive return of capital to shareholders. This includes today’s 10 percent increase to our dividend, which represents the 19th consecutive annual increase.”

This dividend achiever has managed to boost dividends at an annualized rate of 12.30% over the past decade

The stock sells for 17.89 times forward earnings and yields 1.56%.

First Financial Corporation (THFF) provides various financial services. 

The company increased semi-annual dividends by 1.90% to $0.54/share. This is the corporation's 34th consecutive year of increased regular dividends. This dividend champion has managed to grow dividends at an annualized rate of 1.30%/year over the past decade.

The stock sells for 8.82 times forward earnings and yields 2.48%.

Saturday, May 21, 2022

Warren Buffett Portfolio Holdings as of 03/31/2022

 Berkshire Hathaway is the holding company of super-investor Warren Buffett. He transformed a struggling textile mill into a conglomerate with a significant portfolio of equites and significant interests in railroads, insurance, utilities, industrials etc.

Because of the size of his equity portfolio investments, Berkshire Hathaway has to report its US equity holdings every quarter to the SEC. Some foreign investments are also reported to the corresponding Foreign securities regulator.

You can find the updated portfolio holdings for Berkshire Hathaway (BRK.A)(BRK.B) as of March 31, 2022.

Company Name

Ticker

Value

(Millions)

% of BRK Portfolio

Shares Held

% of Shares Outstanding Held

Holdings Date

Apple Inc

AAPL

$155,564.10

45.68%

890,923,410

5.50%

3/31/2022

Bank of America Corp

BAC

$41,636.30

12.23%

1,010,100,606

12.54%

3/31/2022

American Express Co

AXP

$28,351.20

8.32%

151,610,700

20.13%

3/31/2022

Chevron Corp

CVX

$25,919.00

7.61%

159,178,117

8.10%

3/31/2022

Coca-Cola Co

KO

$24,800.00

7.28%

400,000,000

9.23%

3/31/2022

Kraft Heinz Co

KHC

$12,826.80

3.77%

325,634,818

26.61%

3/31/2022

Occidental Petroleum Corp

OXY

$9,173.80

2.69%

143,162,392

15.28%

5/12/2022

Moody's Corp

MCO

$8,323.80

2.44%

24,669,778

13.37%

3/31/2022

US Bancorp

USB

$6,719.10

1.97%

126,417,887

8.51%

3/31/2022

Activision Blizzard Inc

ATVI

$5,152.30

1.51%

64,315,222

8.23%

3/31/2022

DaVita Inc

DVA

$4,082.80

1.20%

36,095,570

38.16%

3/31/2022

Bank of New York Mellon Corp

BK

$3,591.10

1.05%

72,357,453

8.96%

3/31/2022

Kroger Co

KR

$3,326.60

0.98%

57,985,263

8.04%

3/31/2022

Citigroup Inc

C

$2,945.30

0.86%

55,155,797

2.84%

3/31/2022

Verisign Inc

VRSN

$2,851.00

0.84%

12,815,613

11.70%

3/31/2022

General Motors Co

GM

$2,713.90

0.80%

62,045,847

4.25%

3/31/2022

Paramount Global

PARA

$2,606.90

0.77%

68,947,760

11.33%

3/31/2022

Charter Communications Inc

CHTR

$2,088.80

0.61%

3,828,941

2.00%

3/31/2022

Itochu Corp

8001

$2,045.00

0.60%

79,509,400

5.02%

8/24/2020

Liberty Media Corp

LSXMK

$1,975.90

0.58%

43,208,291

19.60%

3/31/2022

Visa Inc

V

$1,840.10

0.54%

8,297,460

0.50%

3/31/2022

Mitsubishi Corp

8058

$1,776.90

0.52%

74,887,500

5.04%

8/24/2020

Amazon.com Inc

AMZN

$1,738.50

0.51%

533,300

0.10%

3/31/2022

Mitsui & Co Ltd

8031

$1,562.70

0.46%

86,453,900

5.26%

8/24/2020

Aon PLC

AON

$1,431.50

0.42%

4,396,000

2.07%

3/31/2022

Mastercard Inc

MA

$1,424.70

0.42%

3,986,648

0.41%

3/31/2022

Snowflake Inc.

SNOW

$1,403.50

0.41%

6,125,376

1.95%

3/31/2022

Celanese Corp

CE

$1,126.00

0.33%

7,880,998

7.28%

3/31/2022

Liberty Media Corp

LSXMA

$923.70

0.27%

20,207,680

20.44%

3/31/2022

Mckesson Corp

MCK

$894.50

0.26%

2,921,975

2.01%

3/31/2022

Nu Holdings Ltd

NU

$827.00

0.24%

107,118,784

3.07%

3/31/2022

Sumitomo Corp

8053

$819.30

0.24%

63,121,100

5.04%

8/24/2020

RH

RH

$707.60

0.21%

2,170,000

10.00%

3/31/2022

T-Mobile US Inc

TMUS

$672.80

0.20%

5,242,000

0.42%

3/31/2022

Globe Life Inc

GL

$639.20

0.19%

6,353,727

6.44%

3/31/2022

Liberty Media Corp

FWONK

$539.30

0.16%

7,722,451

3.75%

3/31/2022

Marubeni Corp

8002

$530.80

0.16%

87,877,700

5.05%

8/24/2020

STORE Capital Corp

STOR

$431.30

0.13%

14,754,811

5.26%

3/31/2022

Ally Financial Inc

ALLY

$390.00

0.11%

8,969,420

2.78%

3/31/2022

Floor & Decor Holdings Inc

FND

$387.20

0.11%

4,780,000

4.52%

3/31/2022

StoneCo Ltd

STNE

$125.10

0.04%

10,695,448

3.82%

3/31/2022

Verizon Communications Inc

VZ

$70.30

0.02%

1,380,111

0.03%

3/31/2022

Marsh & McLennan Companies Inc

MMC

$69.00

0.02%

404,911

0.08%

3/31/2022

Royalty Pharma PLC

RPRX

$58.30

0.02%

1,496,372

0.34%

3/31/2022

Johnson & Johnson

JNJ

$58.00

0.02%

327,100

0.01%

3/31/2022

Procter & Gamble Co

PG

$48.20

0.01%

315,400

0.01%

3/31/2022

Mondelez International Inc

MDLZ

$36.30

0.01%

578,000

0.04%

3/31/2022

Liberty Latin America Ltd

LILA

$25.50

0.01%

2,630,792

5.86%

3/31/2022

Vanguard 500 Index Fund

VOO

$17.90

0.01%

43,000

0.01%

3/31/2022

SPDR S&P 500 ETF Trust

SPY

$17.80

0.01%

39,400

0.00%

3/31/2022

United Parcel Service Inc

UPS

$12.70

-

59,400

0.01%

3/31/2022

Liberty Latin America Ltd

LILAK

$12.30

-

1,284,020

0.72%

3/31/2022

The chart was compiled using information from Tikr.com.

You can see that Apple (AAPL) accounts for over 45% of the equity portfolio as of March 31, 2022. This position has generated close to $100 billion in profits for Buffett's Berkshire Hathaway.

Buffett has managed to accumulate the position between 2016 and 2018 at a total cost of approximately $36 billion. He did sell about $11 billion worth of Apple stock in 2020. In addition, Apple sends $820 million in dividends each year to Berkshire Hathaway.

He did make large investments in Apple, Bank of America, Coca-Cola, American Express and Kraft Heinz. His portfolio is concentrated mostly as a result of letting winners run, and not selling prematurely. 

You can view the dividend contribution from each of his portfolio holdings from the table below. Berkshire Hathaway is generating almost $5.30 billion in annual dividend income from his portfolio.

Company Name

Ticker

Reported Value of Shares Held

# Shares Held

Dividend Income

Chevron Corp

CVX

$25,919.00

159,178,117

 $    904,131,704.56

Bank of America Corp

BAC

$41,636.30

1,010,100,606

 $    848,484,509.04

Apple Inc

AAPL

$155,564.10

890,923,410

 $    819,649,537.20

Coca-Cola Co

KO

$24,800.00

400,000,000

 $    704,000,000.00

Kraft Heinz Co

KHC

$12,826.80

325,634,818

 $    521,015,708.80

American Express Co

AXP

$28,351.20

151,610,700

 $    315,350,256.00

US Bancorp

USB

$6,719.10

126,417,887

 $    232,608,912.08

Citigroup Inc

C

$2,945.30

55,155,797

 $    112,517,825.88

Bank of New York Mellon

BK

$3,591.10

72,357,453

 $       98,406,136.08

Mitsubishi Corp

8058

$1,776.90

74,887,500

 $       87,078,488.37

Mitsui & Co Ltd

8031

$1,562.70

86,453,900

 $       80,422,232.56

Itochu Corp

8001

$2,045.00

79,509,400

 $       80,125,751.94

Occidental Petroleum Corp

OXY

$9,173.80

143,162,392

 $       74,444,443.84

Moody's Corp

MCO

$8,323.80

24,669,778

 $       69,075,378.40

Paramount Global

PARA

$2,606.90

68,947,760

 $       66,189,849.60

Kroger Co

KR

$3,326.60

57,985,263

 $       48,707,620.92

Sumitomo Corp

8053

$819.30

63,121,100

 $       44,037,976.74

Marubeni Corp

8002

$530.80

87,877,700

 $       40,873,348.84

Activision Blizzard Inc

ATVI

$5,152.30

64,315,222

 $       30,228,154.34

STORE Capital Corp

STOR

$431.30

14,754,811

 $       22,722,408.94

Celanese Corp

CE

$1,126.00

7,880,998

 $       21,436,314.56

Visa Inc

V

$1,840.10

8,297,460

 $       12,446,190.00

Ally Financial Inc

ALLY

$390.00

8,969,420

 $       10,763,304.00

Aon PLC

AON

$1,431.50

4,396,000

 $         9,847,040.00

Mastercard Inc

MA

$1,424.70

3,986,648

 $         7,813,830.08

Mckesson Corp

MCK

$894.50

2,921,975

 $         5,493,313.00

Globe Life Inc

GL

$639.20

6,353,727

 $         5,273,593.41

Verizon Communications Inc

VZ

$70.30

1,380,111

 $         3,533,084.16

Johnson & Johnson

JNJ

$58.00

327,100

 $         1,478,492.00

Procter & Gamble Co

PG

$48.20

315,400

 $         1,152,219.28

Royalty Pharma PLC

RPRX

$58.30

1,496,372

 $         1,047,460.40

Marsh & McLennan Companies Inc

MMC

$69.00

404,911

 $             866,509.54

Mondelez International Inc

MDLZ

$36.30

578,000

 $             809,200.00

United Parcel Service Inc

UPS

$12.70

59,400

 $             361,152.00

Vanguard 500 Index Fund

VOO

$17.90

43,000

 $             236,070.00

SPDR S&P 500 ETF Trust

SPY

$17.80

39,400

 $             228,914.00

For the quarter ended on March 31, 2022, Warren Buffett and his lieutenants Todd and Ted added to the following existing positions:


Buffett seems to be a big fan of Oil and Gas companies as of recently, with his large investments in Occidental Petroleum and Chevron. He also seems to be investing in financials such as Ally and Citigroup, as well as Markel. This was an interesting investment, after his acquisition of Alleghany (Y).

They reduced ownership in the following companies:


Looks like he sold out of a lot of companies that Dividend Growth Investors own. For example Verizon, Bristol-Myers Squibb and Abbvie, as well as STORE Capital. Perhaps he wants to sell the more stable and dependable companies, that won't fall as much during a recession, and instead invest in companies that are cheaper and down more. 

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