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.
Becton, Dickinson and Company (BDX), is a medical technology company which develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products worldwide. The company raised its quarterly dividend by 10% to 66 cents/share. This marked the 44th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 14.10%/year. The company is attractively valued at 18 times expected earnings and yields 1.70%. I would be interested in adding to my position if it yields more than 2%. Check my analysis of Becton Dickinson.
Hormel Foods Corporation (HRL) produces and markets various meat and food products worldwide. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The company raised its quarterly dividend by 16% to 29 cents/share. This marked the 50th consecutive annual dividend increase for this dividend king. The ten year dividend growth rate is 13.50%/year. The company is overvalued at 25.60 times expected earnings and yields 1.60%. I will add it to my list for further research.
The Valspar Corporation (VAL) develops, manufactures, and distributes a range of coatings, paints, and related products worldwide. It operates in two segments, Coatings and Paints. The company raised its quarterly dividend by 10% to 33 cents/share. This marked the 38th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 11.60%/year. The company is attractively valued at 16.90 times expected earnings and yields 1.60%. I will add it to my list for further research.
Full Disclosure: Long MKC and BDX
Relevant Articles:
- Dividend Kings List for 2015
- Dividend Champions - The Best List for Dividend Investors
- How I Manage to Monitor So Many Companies
- How to read my weekly dividend increase reports
- These Books Shaped My Investing Strategy
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Long BDX and hope to be long MKC at some point. The valuation on MKC just doesn't make much sense right now so I'll look elsewhere.
ReplyDeleteYep, around 70 would be great. Even at $75 might be a decent entry for an initial position
DeleteThanks DGI, I missed the raise from BDX. I worked for BDX back in the '80s, and it was one of my purchases in early 2013 when I switched from index funds to company stocks. The only drawback is that it is up almost 50%, which is another way to say that I should have bought more. :)
ReplyDeleteI dragged my feet on BDX for the longest time - I had it on my list in 2011 and 2012. Luckily I bought a little a couple years ago, though similar to you not enough..
DeleteI've been waiting for MKC to be reasonably valued for a number of years. I'm beginning to think that it may never happen (or happen once every 10-15 years, a la mortgage/financial crisis). It just might be one of these companies where you can wait and wait for an entry point but in all that waiting, you miss out on the gains. I know we can buy other stocks, but as far as moat-worthy stocks go, you really can't go wrong with MKC. Look at this:
ReplyDeletehttps://finance.yahoo.com/q/co?s=MKC
Check out the Competitors portion. I don't think there are any.
I like MKC, and would like it even more around $70. In an ideal world, I would manage to double the number of shares I own. MKC is a true example of slow and steady accumulation of wealth, income and dividends over the long-term
Delete