Monday, February 10, 2025

25 Companies Rewarding Shareholders With Raises

I review the list of dividend increases each week as part of my monitoring process. I use this process to review existing holdings and potentially uncover more companies for further research. 

That is just one part of my overall monitoring process however.

While I may report on some of the increases, that doesn't mean these companies are automatic buys. The intelligent dividend growth investor would have to apply a set of logical criteria to focus on the promising companies from a fundamental perspective, and then apply another net to catch them at a hopefully good valuation.

In my case, I apply a set of criteria to decide whether I research a company further or not.

Dividend increases do provide signaling value to me in my research process, because they basically provide an input into managements thoughts about the business prospects. It's great to bump this up against past results and my expectations. Then combine with other data I track.

Basically increases are one of the tools that help me monitor existing holdings, monitor the heart of dividend growth investing universe &potentially uncover companies for further research

I wanted to point all that for context, as my sharing increases always seem to confuse someone who is new to my work.

During the past week, there were 69 companies which raised dividends in the US. I reviewed each increase, and narrowed it down to more established dividend growth companies. I define established dividend growth companies as those that have at least a ten year streak of consecutive annual dividend increases under their belt.

In the old days, when we still had a recession every five years or so, a ten year requirement of annual dividend increases was a test of whether a company is cyclical or not. Today, when recessions are happening once every decade, if not even longer, this is perhaps sounds too conservative. However, we still need to establish a baseline for quality. I would argue that someone who is focusing on long-term investing, spanning decades, is looking for companies that can hopefully compound earnings, dividends and intrinsic value for decades. Rather than look for quick hits that may rise quickly to the sun, only to have their wings burned off just as quickly. 

Anywho, of the 69 companies that raised dividends last week, only 25 have managed to grow dividends for at least a decade. The companies that both raised dividends last week and have a ten year track record of annual dividend increases are listed below:


As I mentioned above, this is just the first step in narrowing down an investment popiulation. While this weekly dividend increase exercise is helpful as part of the monitoring process, it is also a good exercise in applying criteria to narrow down any list of companies to an investable universe.


At a minimum I would look at:

1. Growth in earnings per share over the past decade
2. Consistency of dividend growth over the past raise versus the 5 or 10 year historical record
3. Dividend payout ratio which is not too high, and not trending upwards
4. Good valuation. Which is part art, part science.

Note, the list above already includes only companies that have managed to grow dividends annually for at least a decade. In a regular population screening, that would be a key entry criteria.

Then I would review the company. But in general, a diversified portfolio of companies that pass through these types filters would likely generate good results to the investor who applies them. 

Relevant Articles:



Monday, February 3, 2025

34 Companies Rewarding Shareholders With Raises

I review the list of dividends increases as part of my monitoring process. This exercise helps me monitor existing holdings and potentially identify new companies for further research.

Last week was a very busy week for dividend increases. There were 70 companies in the US which managed to increase dividends to shareholders. This time of the year is typically a busy time for dividend increases in general.

I typically focus my attention on the companies that have managed to increase dividends for at least a decade, in order to identify companies that are more likely to keep growing those dividends in the future.

There were 34 companies that raised dividends last week, which have also managed to increase anual dividends for at least a decade.




This is a list of companies for further review. Most seem attractive as businesses, but that doesn’t mean that they should be invested in at any price, regardless of valuation.

The next step is to check each business, in order to determine if it is worth further review. I would look at ten year trends in earnings per share, dividends per share, payout ratios, shares outstanding. I would try to understand what the business does, and make an assessment if the good times would continue, so that I can expect higher earnings, dividends and intrinsic values over time. I would look at the valuation relative to earnings and dividend growth, in order to determine if the business is fairly valued, if it looks promising too. 

Relevant Articles:





Thursday, January 30, 2025

How Robert McDevitt Built A $250 Million Estate

I love the power of compound interest. 

I also love reading stories of ordinary folks, who invested for the long-run in blue chip, dividend paying companies.

As we all know, building wealth is a matter of:

1. How much you invest

2. Your rate of return

3. How long you invest for

If you invest a small amount at the start, and generate a good enough return over time, you may end up with a very large nest egg at the end of your investment journey. For example, if you invest $10,000 today in a tax-advantaged account such as a Roth IRA or Roth 401 (k), at a 10% annualized return, and hold for 50 years, you'd end up with a little more than $1.17 Million.

If you pull any or all additional levers listed above (1, 2, or 3), you may end up with an even higher amounts. This means adding more money at the start, or over time, increasing the rate of return (which is hard to do), or increasing the holding period.

For example, if you manage to increase the holding period to 100 years, you end up with much more than $135 Million. Few have the vision to do this today, and set their family up financially for generations to come, because most do not really care about those other than themselves. Many also lack the financial literacy that folks such as the Rockefellers have. But I digress.


Today, I will share the story of Robert McDevitt, who left a little over $250 Million to charity when he died in 2008.


He died at the age of 90 in 2008. He ran a nice-enough but unremarkable funeral home near the center of town. He lived a frugal life, living off his business income, and keeping invested on his stock. Sadly, his spouse died a little before him, and they had no children. 

The bulk of this estate was in IBM stock, which he had inherited from his mother.

Robert McDevitt was an early investor in IBM stock which he inherited from his mother and held for his life. (Source)

At the time of his passing, he was the single largest shareholder of IBM stock, valued at over $250 million. 

McDevitt's mother, Mary Graif McDevitt, was secretary to A. Ward Ford, one of the original board members of the Computing Tabulating Recording Company in the early 1900s. 

A. Ward Ford was responsible for hiring Tom Watson, Sr. as president, who eventually changed the company's name to IBM and ran it until the 1950s. 

Mary McDevitt apparently borrowed $125 to buy the company stock and reinvested back into the company, passing the shares on to her son.

It's truly fascinating how a small initial investment, compounded over 90 years at a high rate of return, with dividends reinvested, turned into such an amazingly large estate. 

It sounds simple, but it's definitely not easy. IBM has gone through several shake-ups over the years, which threatened its business. Yet, the company is still going, and had overcome these obstacles.

IBM is a dividend aristocrat that has been able to pay dividends since 1913, and increased them annually for 29 years.

It's even more amazing that this money went to charitable causes, benefiting others. I love all of this.

The money was put in trust, and these benefactors will receive investment income from the pot of money.

It's fascinating to look at the source of this estate, namely IBM, which has generated a ton of wealth for those patient enough to hold on to the stock.

IBM has been one of the best performers on the stock exchange over the past century and then some.

If you invested $1 in $IBM in August 1911, it would have grown to $40,000 by 2014 on a price basis. 

If you reinvested your dividends, that $1 investment would have grown to $1,434,300 by 2014.


The source of that calculation is this Global Financial Data article. They (GFD) really know their stuff when it comes to historical data on various financial markets.

There is some element of survivorship bias of course. But it does seem that a lot of fortunes we hear about are generated from some cash from a business or regular employment, which have been invested in a single security or two, then held on for decades, while enjoying the fruits of patient long-term compounding. This is how wealth tends to be built. 

All those traders that try to time entries and exits, trying to outsmart everyone else, end up wasting those true long-term opportunities. And end up paying tons in taxes, fees, commissions, and missed opportunity. 

The other factor to discuss is that while the majority of the portfolio seems to have been largely in IBM stock, that doesn't mean there weren't other investments either. It's simply a testament to the power of a few principles such as the Coffee Can Portfolio. This is where you assemble a portfolio of a few solid blue chip companies, and then you let the winners run for as long as possible. As a result, the portfolio ends up really concentrating itself over time into the best performing investments. The failures end up as mere footnotes.

The conclusion for me is basically that long-term investing works for those patient enough to take advantage of it. In my case, it means continuing to invest in a diversified portfolio of quality companies, reinvesting those dividends, keeping taxes/commissions/fees low, and investing for the long-run. This also means being as inactive as possible, and letting winners run for as long as possible, without re-balancing/trying to time entries or exits, or second-guessing and micro-managing my investments.

Relevant Articles:

- Time in the market is your greatest ally in investing




Wednesday, January 29, 2025

Do not let politics influence your investment decisions

I recently stumbled upon an interesting statistic, which showed the performance of US Equities by president since president Kennedy.

This chart basically shows that on average, US Equities do not really care much who is in charge at the White House. While policy could affect some companies and some industries, it doesn't really seem to matter for markets who's at the White House. Even if those do occur, their impact and magnitude of the change are hard to ascertain at the moment. Hence, that change is as good as any guess.

If you had only invested if just the Republicans are in power or if just the Democrats are in power, you would have missed out on a large chunk of total returns over the past 63 years.

I am mostly posting this, as I have often heard folks make drastic portfolio changes based on political affiliations. In general, that is most likely a mistake. And possibly a very expensive one, given the opportunity cost of missed power of compounding. 

I would advise against letting political events influence investment decisions, as that is mostly a knee-jerk short-term timing. I emphasize long-term investment principles over political noise. This aligns with broader investment advice to focus on fundamentals rather than short-term political changes.

The chart in the post references historical data from January 1961 to December 2024, showing that the market generally grows under both Democratic and Republican presidencies, except for a notable decline during George W. Bush's term, which was impacted by significant economic events like the dot-com bubble burst and the Great Financial Crisis. That being said, no indicator is 100% right. But trying to time the market based on a single data point is probably not going to work out over time. The best investment strategy is to ignore that noise, try to avoid your costly biases, and stay invested.

As Dividend Growth Investors, we focus on individual companies and businesses. We care about whether those businesses can continue growing earnings and dividends over time, how safe those dividends are and whether we can buy those shares at a good entry point. It doesn't really matter as much who is in the White House. 

Even the Oracle of Omaha shares this view too. He has stated on numerous occasions that you do not want to have a political view when investing. That's because this view could bias you, and essentially you may end up shooting yourself in the foot. He has mentioned that he has been able to invest under every presidency he has lived through, without worrying who's in the White House.  Warren Buffett says it doesn't matter who's in the white house

Stay true to your long-term strategy, do not let yourself be driven by narratives and do not interrupt the compound interest effect without thinking.



Monday, January 27, 2025

16 Companies Rewarding Shareholders With Raises

I review the list of dividends increases as part of my monitoring process. This exercise helps me monitor existing holdings and potentially identify new companies for further research.

Last week was a very busy week for dividend increases. There were 40 companies in the US which managed to increase dividends to shareholders. This time of the year is typically a busy time for dividend increases in general.

I typically focus my attention on the companies that have managed to increase dividends for at least a decade, in order to identify companies that are more likely to keep growing those dividends in the future.

There were 16 companies that raised dividends last week, which have also managed to increase anual dividends for at least a decade.



This is a list of companies for further review. Most seem attractive as businesses, but that doesn’t mean that they should be invested in at any price, regardless of valuation.

The next step is to check each business, in order to determine if it is worth further review. I would look at ten year trends in earnings per share, dividends per share, payout ratios, shares outstanding. I would try to understand what the business does, and make an assessment if the good times would continue, so that I can expect higher earnings, dividends and intrinsic values over time. I would look at the valuation relative to earnings and dividend growth, in order to determine if the business is fairly valued, if it looks promising too. 


Relevant Articles:

- Three Dividend Growth Companies Increasing Dividends Last Week



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