16 Dividend Growth Stocks Raising Dividends Last Week

I review the list of dividend increases each week as part of my monitoring process. This exercise helps me check out new companies for further research. It also helps me to monitor existing positions.

There were over 42 companies increasing dividends last week. I narrowed the list down to 16 by only focusing on the companies that have managed to raise dividends for at least ten years in a row. I have found that to be a very helpful requirement that weeds out cyclical companies.

I included the new dividend increase and calculated the rate of change relative to the last one. I also included the track record of consistent annual dividend increases. 

I have also included valuation metrics such as forward P/E ratio, 5 year dividend growth rate and dividend yield. 

You can view the full table below:

This list is not a recommendation to buy or sell stocks. It is simply a list of companies that raised dividends last week. The companies listed have managed to grow dividends for at least ten years in a row.

The next step in the process would be to review trends in earnings per share, in order to determine if the dividend growth is on strong ground. Rising earnings per share provide the fuel behind future dividend increases.

This should be followed by reviewing the trends in dividend payout ratios, in order to check the health of dividend payments. A rising payout ratio over time shows that future dividend growth may be in jeopardy. There is a natural limit to dividends increasing if earnings are stagnant or if dividends grow faster than earnings.

Obtaining an understanding behind the company’s business is helpful, in order to determine how defensible the dividend will be during the next recession. Certain companies are more immune to any downside, while others follow very closely the rise and fall in the economic cycle.

Of course, valuation is important, but it is more art than science. P/E ratios are not created equal. A stock with a P/E of 10 may turn out to be more expensive than a stock with a P/E of 30, if the latter is growing earnings and the former isn’t. Plus, the low P/E stock may be in a cyclical industry whose earnings will decline during the next recession, increasing the odds of a dividend cut. The high P/E company may be in an industry where earnings are somewhat recession resistant, which means that the likelihood of dividend cuts during the next recession is lower.

For a sample analysis of Hershey (HSY), check here.

Relevant Articles:

- Seven Companies Rewarding Shareholders With a Raise

- Five Dividend Growth Companies Raising Dividends Last Week

- Seven Dividend Growth Stocks Rewarding Shareholders with Raises

- 48 Dividend Champions For Further Research

48 Dividend Champions For Further Research

As part of my research, I ran a screen on the Divided Growth Investor Universe.

I looked for companies, which have:

1) Increased dividends for at least 25 years in a row (dividend champion)

2) Consistently managed to increase dividends by at least 5%/year over the past decade

3) Increased earnings per share over the past decade

4) Forward Dividend Payout Ratio below 70%

I came up with a list of 48 Dividend Champions for further research here:

In my opinion, these are great companies for further research. I believe they posses the characteristics to keep growing dividends over the next decade. I also view them as quality companies as well.

However, I believe that investors need to evaluate each company, in order to confirm they are well suited for their portfolios.

In addition, investors need to determine if the valuation is right. Quite often, the best quality companies command a premium. Choosing between companies can only be done if you understand the business, the defensibility of the earnings stream, the growth pattern and combine that with today's valuations metrics such as P/E.

I am mainly posting this list as a starting point for my research, nothing more. I would be monitoring the list, and potentially pouncing on the right opportunity if they appear attractively valued.

Relevant Articles:

- 2023 Dividend Champions List

- How to value dividend stocks

- How to become a successful dividend investor

Five Dividend Growth Companies Raising Dividends Last Week

As part of my monitoring process, I review the list of dividend increases every week. I am able to monitor companies I own and those I may be considering owning at the right price. I find the rate of recent dividend increases to be very telling about management’s expectations for near term profitability growth. If they believe that their company is operating at a predictable rate, they are likely to consider growing the dividend close to the historical average annual rate of increase. If there is the expectation for a deceleration in profitability, we will see management growing their distribution’s at a much slower pace than before.

This is why I try to compare the most recent dividend increase relative to the ten year average. In order to get more context, I also review the historical trends in earnings per share along with the near term earnings expectations by Wall Street Analysts (which should be taken with a grain of salt of course).

Over the past week, there were several companies that announced dividend raises to their shareholders. As usual, I focus on companies that have managed to increase dividends for at least a decade. I want companies that can pay and grow dividends throughout the economic cycle.

The companies include:

The Bank of New York Mellon Corporation (BK) provides a range of financial products and services in the United States and internationally. The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and other segments. 

The company increased quarterly dividends by 13.50% to $0.42/share. This was the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 10.60%.

Between 2013 and 2022 the company managed to grow earnings from $1.74/share to $2.91/share.

The stock sells for 9.27 times forward earnings and has a dividend yield of 3.86%.

Community Bank System, Inc. (CBU) operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. 

The company increased quarterly dividends by 2.30% to $0.45/share. This is the 31st consecutive year in which the Company has increased its annual dividend. Over the past decade, the company has managed to increase dividends at an annualized rate of 5%.

Between 2013 and 2022 this dividend champion managed to grow earnings from $1.96/share to $3.48/share.

The stock sells for 14.69 times forward earnings and has a dividend yield of 3.59%.

PPG Industries, Inc. (PPG) manufactures and distributes paints, coatings, and specialty materials worldwide. The company operates through Performance Coatings and Industrial Coatings. 

The company increased quarterly dividends by 4.80% to $0.65/share. This was the 52nd consecutive annual dividend increase for this dividend king. Over the past decade, the company has managed to increase dividends at an annualized rate of 7.50%.

Between 2013 and 2022 the company managed to grow earnings from $2.97/share to $4.35/share.

The stock sells for 20.30 times forward earnings and has a dividend yield of 1.74%.

Regions Financial Corporation (RF), a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. 

The company increased quarterly dividends by 20% to $0.24/share. This was the 11th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 33.30%. This would not be possible going forward - the only reason for the high rate was that the bank cut dividends severely over the 2008 - 2009 Global Financial Crisis. It's "easier" to get a high rate of return off a very low base.

Between 2013 and 2022 the company managed to grow earnings from $0.76/share to $2.30/share.

The stock sells for 8.26 times forward earnings and has a dividend yield of 4.80%.

State Street Corporation (STT) provides a range of financial products and services to institutional investors worldwide. 

The company increased quarterly dividends by 9.50% to $0.69/share. This was the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 10%.

Between 2013 and 2022 the company managed to grow earnings from $4.52/share to $7.28/share.

The stock sells for 9.60 times forward earnings and has a dividend yield of 3.92%.

Relevant Articles:

- Five Dividend Growth Companies Increasing Distributions to Shareholders

- Seven Dividend Growth Stocks Rewarding Shareholders with Raises

- Four Companies Increasing Dividends to Shareholders Last Week

- Eight Companies Rewarding Shareholders With a Raise

Seven Dividend Growth Stocks Rewarding Shareholders with Raises

I review the list of dividend increases each week, in an effort to monitor the dividend growth investment universe. This exercise helps me monitoring existing positions but also identify new companies for further research.

I do tend to focus on companies with at least a ten year history of annual dividend increases. This helps me identify companies that have been through at least one full economic cycle. 

Over the past week, there were seven companies which managed to increase dividends and have a ten year track record of annual dividend increases under their belt. The companies include:

Cummins Inc. (CMI) designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and New Power.

The company increased quarterly dividends by 7% to $1.68/share. Cummins has increased the quarterly common stock dividend to shareholders for 14 consecutive years.

Over the past decade, this company has managed to increase dividends at an annualized rate of 12.90%.

The stock sells for 12.67 times forward earnings and yields 2.65%. Check my analysis of Cummins for more information about the company.

Duke Energy Corporation (DUK) operates as an energy company in the United States. It operates through two segments, Electric Utilities and Infrastructure (EU&I) and Gas Utilities and Infrastructure (GU&I).

The company increased quarterly dividends by 2% to $1.025/share. This is the 19th consecutive annual dividend increase for this dividend achiever. Over the past decade, this company has managed to increase dividends at an annualized rate of 2.80%.

The stock sells for 16.57 times forward earnings and has a dividend yield of 4.40%.

Enterprise Products Partners L.P. (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services.

The partnership hiked quarterly distributions by 2% to $0.50/share. This year marks the partnership’s 25th consecutive year of distribution growth for this newly minted dividend champion. Over the past decade, this company has managed to increase distributions at an annualized rate of 4%.

Enterprise Products Partners yields 7.57%.

The J. M. Smucker Company (SJM) manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. 

The company increased quarterly dividends by 3.90% to $1.06/share. This is the 26th consecutive year of annual dividend increases for this dividend champion.

Over the past decade, this company has managed to increase dividends at an annualized rate of 7.20%.

The stock sells for 15.70 times forward earnings and has a dividend yield of 2.86%.

Marsh & McLennan Companies, Inc. (MMC) a professional services company, provides advice and solutions to clients in the areas of risk, strategy, and people worldwide. It operates in two segments, Risk and Insurance Services, and Consulting.

The company increased quarterly dividends by 20.30% to $0.71/share. This is the 17th consecutive annual dividend increase for this dividend achiever. Over the past decade, this company has managed to increase dividends at an annualized rate of 9.60%.

The stock sells for 24.45 times forward earnings and yields 1.52%

National Retail Properties (NNN) invests primarily in high-quality retail properties subject generally to long-term, net leases. As of March 31, 2023, the company owned 3,449 properties in 49 states with a gross leasable area of approximately 35.3 million square feet and with a weighted average remaining lease term of 10.3 years.

The REIT hiked quarterly dividends by 2.70% to $0.565/share. This marks NNN's 34th consecutive annual dividend increase.

Over the past decade, this REIT has managed to increase dividends at an annualized rate of 3.30%.

The stock sells for 13.46 times forward FFO and has a dividend yield of 5.23%.

Ryder System, Inc. (R) operates as a logistics and transportation company worldwide. It operates through three segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS). 

The company increased quarterly dividends by 14.50% to $0.71/share. This is the 19th consecutive annual dividend increase for this dividend achiever. Over the past decade, this company has managed to increase dividends at an annualized rate of 7.20%.

The stock sells for 7.63 times forward earnings and yields 3.31%.

Thank you for reading!

Relevant Articles:

- How to find companies for my dividend portfolio

- Four Companies Increasing Dividends to Shareholders Last Week

- Five Dividend Growth Companies Increasing Distributions to Shareholders

- Eight Companies Rewarding Shareholders With a Raise

Buffett on ignoring stock price fluctuations and thinking like a business owner

One of my favorite Berkshire Hathaway letters to shareholders is the one from 2013. It left a very big impression on me, mostly because it discussed some important lessons on dealing with market fluctuations. The lessons were illustrated by two investments that Buffett had made.

The investments were in a farm in Nebraska and a New York property adjacent to NYU.

He made these investments at what he believed to be a low price. In the case of the farm, Buffett tried to estimate how much agricultural products like soybeans and corn can be produced. He looked at estimated costs, and calculated the effect on future productivity improvements.  While he knew that there will be disappointing years, he did know that over time, things would be ok. As a result he held on to the farm. It cost $280,000 in 1986 and had an yield of about 10%. By 2013, the farm had increased five times in value, and tripled its earnings. In this deal, he seeked the expertise of his son Howard, who is a farmer.

The other property he invested in 1993 was the one close to NYU. It also had an unlevered yield of 10%, When analyzing the deal, Buffett looked for improvements such as replacing tenants that weren’t charged market rents with new ones as well as leasing vacant stores. He partnered with a couple experienced real estate investors, who knew how to manage the property and unlock value.

As a result of a couple of debt refinancing, expiring leases which were signed at higher rates, and better management of operations, annual distributions increased to 35% of the original equity investment. In addition, he also received several special distributions totaling more than 150% of the original investment. Annual distributions being compared to original cost remind me of the Yield on Cost indicator than many dividend growth investors use. 

Buffett used these investments in order to illustrate several fundamentals of investing:

- You don’t need to be an expert in order to achieve satisfactory investment returns

- Focus on the future productivity of the asset you are considering.

- Think only of what the properties would produce and cared not at all about their daily valuations

- If you instead focus on the prospective price change of a contemplated purchase, you are speculating

- Forming macro opinions or listening to the macro or market predictions of others is a waste of time. What the economy, interest rates, or the stock market might do in the years immediately following is of no importance of making those investments.

There was a big difference between investing in businesses and investing in stocks however. Equities offer minute by minute prices. Yet, his farm or real estate do not produce quotes.

Warren Buffett is famous for saying :

 ‘‘After we buy a stock, consequently, we would not be distrurbed if markets closed for a year or two. We don’t need a daily quote on our 100 percent position in See’s to validate our well being. Why, then, should we need a quote on our 7 percent interest in Coke (KO)?’’

Sometimes Mr Market offers a tremendous bargain and sometimes Mr Market offers a ridiculously high price for an asset. Most of the time, it pays to just ignore Mr Market, unless you want to take advantage of this moody fellow.

People who focus too much on stock price fluctuations, end up being influenced by the manic depressive Mr Market. They feel the urge to do something, which leads to many investors selling low and buying high.

Most of these investors would likely do better by sticking to private businesses and real estate, where they do not get a daily quote. This let’s them focus on the business, its fundamentals and ignore all the noise. For many folks, the instant liquidity that the stock market offers is more of a curse, than a blessing. Perhaps these folks would be better off buying and owning a private business. But if they were to invest in equities, they need to see themselves as partial owners of a business enterprise, and not view stocks as some sort of a lottery ticket. Perhaps that’s why Buffett has stated that you should not buy a business, unless you are willing to hold it for a decade, even if they closed the stock market for ten years.

Thinking like a business owner has a lot of advantages. Mostly, it lets you focus on the business, and ignore noise. Second, it helps you stay patient, when everyone around you is panicking. This was evident during the Global Financial Crisis, and was evident during the Covid-19 crash in 2020. Few investors can sit patiently, when their stocks are going down or even going up. 

This is why I try to tell investors to focus on the dividend stream produced by the companies they own, and try to research to see if the payout is adequate and that earnings can grow over time. This lifehack of focusing on the stability of the dividend stream lets the investor avoid being scared away by share price fluctuations. If you are an investor in the accumulation phase, stock price declines should be viewed with excitement, because lower prices mean that future retirement income can be bought on sale. 

If you are a retired investor, you should ignore price fluctuations. Instead, focus on the income from your investments.

Both groups should care about prices only when they have money to invest.

Relevant Articles:

- Dividend Investors Should Ignore Market Fluctuations

- Are you ready for the next bear market?

- Dividend Investors: Stay The Course

- Dividend Investors Will Make Money Even if the Stock Market Closed for Ten Years

- Dividend Investors Should Ignore Price Fluctuations

Dividend Stocks versus Dividend ETFs

Readers often ask me about my favorite dividend ETFs. I do tend to prefer to build my own portfolios consisting of individual dividend stocks, over buying dividend ETFs. However, I realize that not everyone is like me.

I have listed several reasons why I prefer selecting my own companies over using a dividend ETF:

1) Cost

Buying individual stocks in the US is commission free. It doesn’t cost me anything to buy stocks in individual companies like PepsiCo, Johnson & Johnson or Lockheed Martin. In addition, it doesn’t cost me anything to hold on to individual companies in my portfolio. In comparison, ETFs have an annual charge, which can range dramatically. Paying 0.40%/year does not seem like much, but if you hold a portfolio worth $100,000, that’s $400 that goes out of your pocket each year. Over time, these fees can add up.

2) Portfolio holdings

When I select individual companies for my portfolio, I can control which companies to add and what criteria to use for inclusion. I can vary the number of holdings to as low or as high number as I choose. I can decide which types of companies can be included, and which don’t stand a chance. I can also decide when to remove a company and what to do with the proceeds. 

With ETFs, you are basically letting someone else decide what to include. You have to trust that they will follow their process consistently.

3) Portfolio Weights

I can decide how to properly weight my portfolio holdings. If investing a lump-sum, I can decide to allocate money equally between the number of holdings I have. I believe in giving each company I own an equal chance of success.

Most ETFs weight their holdings based on factors that make building an ETF easy for the ETF provider, not necessarily the best method for investors. For example, most ETFs are based on a market capitalization basis, which assigns the highest portfolio value to larger companies. 

Very often you see ETFs that may have 100 or more individual holdings. When you dig further however, you see that half of the portfolio value is concentrated in 10 - 20 companies, while the rest are just filler.

4) Portfolio Turnover

I have more control over turnover than a dividend ETF. For example, I try to be as passive as possible, because turnover costs in terms of commissions, taxes, fees, and opportunity costs. I try to avoid selling, for as long as the dividend is not cut. I would have turnover, as companies split, merge, get acquired, and cut dividends. But I have found that selling for other reasons has been a mistake for me.

I also like knowing that I own certain businesses, when I design a portfolio. With ETFs, I cannot say that the businesses I own would still be in the portfolio. For example, the Schwab Dividend ETF had Microsoft (MSFT) in 2016, but doesn’t have it today in 2023. The company is a quality one, and has kept raising dividends. I am not sure why it was deleted, but in my opinion, this is not a good move. Not just because it did so well, but because it was removed for no reason in my opinion.

That being said, there are reasons for using ETFs. Of course, for some investors, ETF’s may have appeal.

1) Time Factor

The main reason someone may like investing in a dividend ETF is because they do not want to select any of the companies themselves, and are fine to delegate this responsibility to someone else for a recurring annual fee. Some folks do not feel comfortable selecting well-known dividend growth stocks, which is fine. It’s better to let a more qualified party select companies for you, than to end up selecting the wrong companies in the process.

2) Instant Diversification

One advantage of ETFs is that you get instant diversification at the click of one button, albeit at the cost of a recurring annual fee that would increase in dollar amount as your investment accounts grow. I would argue that today I can generate this instant diversification by selecting companies one at a time, but I do understand the appeal of clicking just one button versus say 50.

3) Re-Balancing

The biggest advantage of ETFs is that they do not generate any capital gains to shareholders when they re-balance their portfolios. In other words, if an ETF decided to eliminate a certain company from its portfolio, and realizes a capital gain in the process, its shareholders do not get taxed on it. However, if there is a loss when an individual portfolio holding is disposed of, the ETF shareholders won’t be able to take the loss for tax purposes. This tax discussion only centers around the ETF portfolio holdings. If you sell the ETF at a gain, you will pay tax in a taxable account; if you sell an ETF at a loss, you will get a benefit.

Conclusion:

I have tried to summarize the pros and cons of selecting my own individual dividend stocks versus selecting a dividend ETF. I have discussed this topic a few times on the blog too. You may check out the "Relevant Articles" below for more information on my thought process.

Relevant Articles:

- The Best Dividend ETF to Consider

- The Best Dividend ETF In The Accumulation Phase

- Are Dividend ETF's for you?

- Dividend ETF or Dividend Stocks?

- Dividend ETF’s Are Bad for Investors: Here is Why

Interpublic (IPG) Dividend Stock Analysis

The Interpublic Group of Companies, Inc. (IPG) provides advertising and marketing services worldwide. It operates in three segments: Media, Data & Engagement Solutions, Integrated Advertising & Creativity Led Solutions, and Specialized Communications & Experiential Solutions.

The company initiated a dividend in 2011 and has been increasing it every single year starting in 2013. It has managed to increase dividends at an annualized rate of 10%/year over the past five years.

 

Interpublic has managed to grow earnings per share from $0.62 in 2013 to $2.40 in 2022. The company is expected to earn $2.93/share in 2023.

 

The company reduced shares outstanding by about 10% between 2013 and 2018. Since then, the number of shares outstanding have increased slightly.  The stock price was largely flat between 2014 – 2019.

 

The dividend payout ratio has remained below 60% over the past decade, with the exception of the tumultuous 2020 and the related Covid Shutdowns. It’s impressive to find a company that has managed to grow earnings and dividends, while largely retaining the same payout ratio over time. That’s because it has an asset light model that prints cashflow.

 

The stock is attractively valued today, selling at 12.86 times forward earnings and yielding 3.30%.

Relevant Articles:

- 

Seven Companies Rewarding Shareholders With a Raise

As part of my monitoring process, I review the list of dividend increases every week This activity helps me to monitor the business performance of any companies I am invested in. It also helps me to identify any hidden dividend gems, and place them on my list for further research.

My reviews are an example of the quick way I use to evaluate companies, before deciding if they are worth a second look later or not.

The companies in today’s article have managed to grow dividends for at least ten years in a row. These companies also announced a dividend increase during the past week. The companies include:

This list is not a recommendation to buy or sell stocks. It is simply a list of companies that raised dividends last week. The companies listed have managed to grow dividends for at least ten years in a row.

The next step in the process would be to review trends in earnings per share, in order to determine if the dividend growth is on strong ground. Rising earnings per share provide the fuel behind future dividend increases.

This should be followed by reviewing the trends in dividend payout ratios, in order to check the health of dividend payments. A rising payout ratio over time shows that future dividend growth may be in jeopardy. There is a natural limit to dividends increasing if earnings are stagnant or if dividends grow faster than earnings.

Obtaining an understanding behind the company’s business is helpful, in order to determine how defensible the dividend will be during the next recession. Certain companies are more immune to any downside, while others follow very closely the rise and fall in the economic cycle.

Of course, valuation is important, but it is more art than science. P/E ratios are not created equal. A stock with a P/E of 10 may turn out to be more expensive than a stock with a P/E of 30, if the latter is growing earnings and the former isn’t. Plus, the low P/E stock may be in a cyclical industry whose earnings will decline during the next recession, increasing the odds of a dividend cut. The high P/E company may be in an industry where earnings are somewhat recession resistant, which means that the likelihood of dividend cuts during the next recession is lower.

For a sample analysis of Kroger (KR), check this article.

Relevant Articles:

- Four Companies Increasing Dividends to Shareholders Last Week

- Five Dividend Growth Companies Increasing Distributions to Shareholders

- Eight Companies Rewarding Shareholders With a Raise

- 16 Companies Rewarding Shareholders With a Raise Last Week