Dividends have at least three functions
1. Provide a predictable, low-risk, spendable and repeatable investment return to shareholders
2. Provide a metric for security analysts to value a company
3. Signaling
- If a company that increases dividends regularly is perceived by investors as sound, growing company.
- If a company reduces its dividend the market takes this as evidence that the company is in trouble
As part of my review process, I look at the list of dividend increases each week. I then narrow my search, by reviewing the list of companies that have raised dividends for at least a decade.
Below, you can find a quick summary for each company that has managed to increase dividends last week and also has managed to increase dividends for at least 10 years in a row:
Alliant Energy Corporation (LNT) operates as a utility holding company that provides regulated electricity and natural gas services. It operates through three segments: Utility Electric Operations, Utility Gas Operations, and Utility Other.
The company raised quarterly dividends by 6.10% to $0.48/share. This is the 21st consecutive annual dividend increase for this dividend achiever.
Over the past decade, the company has managed to increase dividends at an annualized rate of 6.80%.
The stock sells for 17 times forward earnings and yields 3.90%.
Enterprise Bancorp, Inc. (EBTC) operates as the holding company of Enterprise Bank and Trust Company that provides commercial banking products and services.
The company raised quarterly dividends by 4.30% to $0.24/share. This is the 32nd consecutive annual dividend increase for this dividend champion.
Over the past decade, the company has managed to increase dividends at an annualized rate of 7.20%.
The stock sells for 8 times earnings and yields 3.30%.
Fastenal Company (FAST) engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, and internationally.
The company increased quarterly dividends by 11.42% to $0.39/share. This is the 26th consecutive annual dividend increase for this dividend champion.
Over the past decade, the company has managed to increase dividends at an annualized rate of 13.30%.
The stock sells for 31.60 times forward earnings and yields 2.25%.
J.B. Hunt Transport Services, Inc. (JBHT) provides surface transportation, delivery, and logistic services in North America. It operates through five segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT).
The company raised quarterly dividends by 2% to $0.43/share. This is the 20th year of consecutive annual dividend increase for this dividend achiever.
The company has managed to grow dividends at an annualized rate of 10.80% over the past decade.
The stock sells for 24.73 times forward earnings and yields 0.86%.
Mercantile Bank Corporation (MBWM) operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services to small- to medium-sized businesses and individuals in the United States.
The company increased quarterly dividends by 2.90% to $0.35/share. That was a 6.06% raise over the dividend paid during the same time last year.
This dividend achiever has managed to raise dividends for 12 years in a row. It has a 10 year annualized rate of dividend growth of 11.50%. However, annualized dividend growth has been decelerating to 7% over the past 5 years, and now about 6% since..
The stock sells for 8.55 times forward earnings and yields 3.58%
