Monday, June 29, 2020

Three Dividend Stocks in the News

I review the list of dividend increases as part of my monitoring process. This helps me to see whether the companies I own continue to progress financially, as evidenced by a well supported dividend increase. A well-supported dividend increase is one that is derived from growing earnings per share over time, and a business that continues humming along nicely. A well-supported dividend increase is one where the payout ratio is not too high, but just right.

Reviewing the list of dividend increases also helps me to identify companies for further research. While I do my fair share of screening on the list of dividend champions, dividend aristocrats, achievers and contenders, I also prefer to look at individual stories. I invest using a bottom up approach, but also try to look at the big picture as well.

Over the past week, there were three companies that raised dividends:

The Kroger Co. (KR) operates as a retailer in the United States. The company operates supermarkets, multi-department stores, marketplace stores, and price impact warehouse stores.

The Kroger Co.'s Board of Directors approved a dividend increase from 16 to 18 cents per quarter. Kroger's quarterly dividend has grown at a double-digit compound annual growth rate since it was reinstated in 2006. This marks the 14th consecutive year of annual dividend increases for this dividend achiever.

"Kroger's 12.50 percent dividend increase reflects our ability to deliver strong free cash flow during uncertain times and throughout the economic cycle," said Rodney McMullen, Kroger's chairman and CEO. "It also reflects the Board of Directors' confidence in both our business model and our commitment to return value to shareholders and achieve consistently attractive total shareholder returns."

Over the past decade, this dividend champion has managed to grow distributions at an annualized rate of 12.60%.

Kroger managed to grow earnings from 94 cents/share in 2009 to $2.04/share 2020. The company is expected to earn $2.71/share in 2021 and $2.56/share in 2022.

Kroger sells for 12.10 times forward earnings and yields 2.20%. Check my analysis of Kroger for more information about the company.

Hingham Institution for Savings (HIFS) is a Massachusetts-chartered savings bank located in Hingham, Massachusetts.

The bank announced that its Board of Directors has declared a regular quarterly cash dividend of $0.43 per share. This represents an increase of 2% over the previous regular quarterly dividend of $0.42 per share as well as a 10.20% increase over the dividend paid during the same time last year.
The company has consistently increased regular quarterly cash dividends over the last twenty-five years. The Bank has also declared special cash dividends in each of the last twenty-five years, typically in the fourth quarter.

Over the past decade, this dividend champion has managed to grow distributions at an annualized rate of 6.10%.

The bank has managed to grow earnings from $3.79/share in 2009 to $17.83/share in 2019. There are no earnings estimated for 2020 due to its small size, but trailing 12 month earnings are at 14.33/share.
The stock is selling for 11.10 times earnings and has a dividend yield of 1.10%.

Worthington Industries (WOR) is a leading industrial manufacturing company delivering innovative solutions to customers that span many industries including transportation, construction, industrial, agriculture, retail and energy.

The board of directors of Worthington Industries, declared a quarterly dividend of $0.25 per share, an increase of 4%. Worthington has increased its dividend for 10 consecutive years and has paid a quarterly dividend since it became a public company in 1968.

Over the past decade, this newly minted dividend achiever has managed to grow distributions at an annualized rate of 6.70%.

The company managed to grow earnings from 57 cents/share in 2010 to $1.41/share in 2020. The company is expected to earn $2.06/share in 2020 and 2021.

The stock sells at 16.60 times forward earnings and offers a dividend yield of 2.90%.

Relevant Articles:

My screening criteria for dividend growth stocks
How to read my stock analysis reports
Dividend Investing Resources I Use
How to determine if your dividends are safe

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