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%.
