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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

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How to value dividend stocks
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