Wednesday, March 16, 2016

24 Dividend Champions for Further Research

The list of dividend champions is the most complete list of US dividend stocks that have managed to boost dividends for 25 years in a row. David Fish painstakingly maintains this list, and spends many hours each month on this very useful tool for dividend growth investors. As a side bonus, his list also includes dividend contenders (those which have increased dividends for 10 to 24 years) and dividend challengers ( those which have increased dividends for 5 to 9 years in a row).

I applied the following entry criteria on the list of dividend champions:

1) Dividend yield higher than 2%
2) 1,3, 5 and 10 year dividend growth of at least 5%/year
3) Dividend payout ratio of less than 60%
4) Dividends Increasing for at least 25 years in a row ( dividend champions)

I then went ahead, and reviewed the growth in earnings over the past decade. I wanted to eliminate companies which were not able to boost profitability over the past decade. Without growing profits, a company’s ability to boost distributions is severely limited.


Here is the list of 24 dividend champions for further research. Under the column for "company name", I have provided links to the most recent analysis of companies I have analyzed before.

Company Name
Ticker Symbol
Industry
No. 'Yrs
Dividend Payout Ratio
1-yr DG
3-yr DG
5-yr DG
10-yr DG
(MMM)
Conglomerate
58
58.50
19.9
20.2
14.3
9.3
(AFL)
Insurance
33
28.03
6.8
5.6
6.7
13.6
(APD)
Chemical-Specialty
33
53.55
6.0
8.6
10.8
9.9
American States Water
(AWR)
Utility-Water
61
55.65
5.3
11.2
10.9
6.9
(CL)
Personal Products
52
55.30
5.6
7.1
8.1
10.5
Donaldson Company
(DCI)
Industrial Equipment
29
49.28
5.5
24.2
22.0
16.9
Dover Corp.
(DOV)
Machinery
60
44.68
5.8
13.9
12.9
11.5
(EV)
Financial Services
35
48.18
11.5
9.2
9.0
11.6
(EMR)
Industrial Equipment
59
50.67
7.1
5.4
6.9
8.4
(BEN)
Financial Services
36
23.00
25.0
17.8
15.4
16.2
(GPC)
Auto Parts
60
56.80
5.2
7.7
8.2
6.9
(ITW)
Machinery
41
42.88
14.9
11.2
9.6
13.1
(JNJ)
Drugs/Consumer Prod.
53
54.74
6.9
7.1
6.9
8.8
(KMB)
Personal Products
44
60.20
6.9
7.5
7.1
7.6
Parker-Hannifin Corp.
(PH)
Industrial Equipment
59
41.72
21.7
15.9
18.7
16.0
Pentair Ltd.
(PNR)
Industrial Equipment
40
50.19
16.4
13.3
11.0
9.4
RPM International Inc.
(RPM)
Chemical-Specialty
42
59.14
7.7
6.6
5.0
5.6
Stanley Black & Decker
(SWK)
Tools/Security Products
48
37.04
4.9
5.9
9.8
6.5
(TROW)
Financial Services
30
46.35
18.2
15.2
14.0
16.3
(TGT)
Retail-Discount
48
42.42
13.7
17.8
20.8
19.6
Tompkins Financial Corp.
(TMP)
Banking
29
45.48
4.9
5.2
5.0
5.8
UGI Corp.
(UGI)
Utility-Electric/Gas
28
44.17
10.1
7.9
8.2
7.4
VF Corp.
(VFC)
Apparel
43
51.93
20.1
20.6
17.0
17.1
(GWW)
Electronics-Wholesale
44
39.23
10.1
14.5
17.2
17.4

Just so I can be clear of however, this screening is just the first step in narrowing down the investable universe to a manageable list of stocks for further research. If I were starting out as a dividend growth investor, this is the first step I would be going through.

The next steps would involve familiarizing myself with each of the companies on the list, and evaluating trends in earnings, dividends, revenues. The last step would be to determine whether the current valuation makes sense at the moment, before putting my money to work.

Full Disclosure: Long MMM, AFL, APD, CL, EV, EMR, GPC, JNJ, KMB, TROW, TGT, VFC, GWW, ITW

Relevant Articles:

How to retire in 10 years with dividend stocks
How to become a successful dividend investor
How to read my stock analysis reports
How to value dividend stocks
Buying Quality Companies at a Reasonable Price is Very Important

16 comments:

  1. Hey DGI,

    Nice list! I'm fairly new to the community and I have a small portfolio, but I already own 4 of these companies! (AFL, JNJ, TROW & TGT)

    Thanks for sharing.

    Best wishes, DfS

    ReplyDelete
  2. Great work, thanks for sharing. I am missing an additional column with current dividend yield... is it asking for too much? Thanks again anyway!

    ReplyDelete
  3. I am not very patient... there they go sorted by dividend yield:

    Company Name Ticker Symbol Div yield
    Emerson Electric (EMR) 4.13
    Eaton Vance Corp. (EV) 3.7
    Tompkins Financial Corp. (TMP) 3.14
    Target Corp. (TGT) 3.09
    T. Rowe Price Group (TROW) 2.93
    Dover Corp. (DOV) 2.87
    Johnson & Johnson (JNJ) 2.87
    Genuine Parts Co. (GPC) 2.85
    AFLAC Inc. (AFL) 2.83
    Pentair Ltd. (PNR) 2.8
    RPM International Inc. (RPM) 2.8
    Kimberly-Clark Corp. (KMB) 2.74
    3M Company (MMM) 2.72
    UGI Corp. (UGI) 2.68
    Parker-Hannifin Corp. (PH) 2.59
    Air Products & Chem. (APD) 2.56
    Illinois Tool Works (ITW) 2.44
    Donaldson Company (DCI) 2.41
    W.W. Grainger Inc. (GWW) 2.38
    VF Corp. (VFC) 2.36
    Stanley Black & Decker (SWK) 2.33
    Colgate-Palmolive Co. (CL) 2.25
    Franklin Resources (BEN) 2.08
    American States Water (AWR) 1.97

    ReplyDelete
  4. I really like these lists and appreciate the work you put in them. Time for me now to update my watch lists and look for buying opportunities.

    Thanks!

    SAK

    ReplyDelete
  5. Sad day - I only own one of the stocks on your list. Looks like I need to return to the drawing board ;)!

    -Dividend Reaper

    ReplyDelete
  6. Great list, will have to take a closer look at these companies.

    ReplyDelete
  7. Nice list, thanks for compiling! I own several of the stocks on the list: MMM, AFL, JNJ, KMB, TROW, and TGT.

    Cheers
    FerdiS, DivGro

    ReplyDelete
  8. MMM is an awesome company to go with for the extremely long run. I intend to pick this one up soon!

    ReplyDelete
  9. Thanks for this list! I'm a long time reader, first time commenter. Always enjoy reading your material. I own a number of the companies on this list. Keep up the great work! :)

    ReplyDelete
  10. I went through a similar process to start picking stocks for DGI. David Fish's spreadsheet is a gold mine! I am both happy and sad that many of the stocks in the list are doing really well (depending on whether I was observant enough to buy them in the August dip or not when I started my dividend growth journey :)

    I went through the trouble of creating VBA macros to do the multiple filters before finding out about Excel's copy/paste for only visible rows (while manual, much easier. Google for excel copy/paste "Visible Cells Only" to see how)

    Thanks for all the help you've given me along the way!

    ReplyDelete
  11. hi DGI,

    I've analysed some of mentioned companies on my blog. If I were you I would probably start with analyzing BEN - valuation is not demanding (especially after adjusting for cash) - I think on some global short term weakness I will buy some shares...

    ReplyDelete
  12. I like and hold Aflac (AFL) in my tIRA. It has done well in both distributions and capital growth. Insurance is just a great business when the underwriting is strong and AFL has a dominant position in Japan.

    ReplyDelete
  13. I have a small spanish dividend growth investment portfolio. I am looking to diversy with international stocks. Which 3 - 5 stocks should you recommend for a long term dividend investment strategy?
    Thanks in advance

    ReplyDelete
  14. I also own quite a few of these, EMR for many years in fact. I am starting to buy more and more dividend champs that will provide income in my early retirement. Thanks for all your posts and research.

    ReplyDelete

Questions or comments? You can reach out to me at my website address name at gmail dot com.

Popular Posts