Six Dividend Growth Stocks Raising Dividends Last Week

I review the list of dividend increases every week. This exercise helps me monitor the dividend growth investing universe. I get to monitor exisitng positions and identify companies for further research.

This exercise also helps showcase the steps I take to review companies. In general, I look at the streak of consecutive annual dividend increases. I also focus on the historical dividend growth rate, in comparison to the most recent raise. I then look at the trends in earnings per share, in order to determine if that dividend growth rate is on a solid footing. This part of the process, along with trending of the dividend payout ratio, helps provide the dividend safety and likelihood of further dividend increases in perspective. Last, but not least, it's important to look at the valuation. 

Valuation of course is part art, part science. One needs to take into consideration the type of business, how cyclical the cashflow streams are, along with growth expectations and traditional metrics such as P/E ratio, dividend yield etc. Value and growth are connected at their core.

AptarGroup, Inc. (ATR) designs and manufactures a range of drug delivery, consumer product dispensing, and active material science solutions and services for the pharmaceutical, beauty, personal care, home care, and food and beverage markets. The company operates through Aptar Pharma, Aptar Beauty, and Aptar Closures segments. 

AptarGroup raised quarterly dividend by 7% to $0.48/share. This is the 32nd consecutive annual dividend increase for this dividend champion. The company has a 5 year annualized dividend growth rate of 4.56%.

The company's earnings went from $3.19/share in 2015 to $5.65/share in 2024.

The company is expected to earn $5.81/share in 2025. 

The stock sells at 23.59 times forward earnings and yields 1.40% 

First American Financial Corporation (FAF) provides financial services. It operates through Title Insurance and Services, and Home Warranty segments.

The company raised quarterly dividend by 1.90% to $0.55/share. This is the 16th consecutive annual dividend increase for this dividend achiever. The company has a 5 year annualized dividend growth rate of 4.66%.

The company's earnings went from $2.65/share in 2015 to $1.26/share in 2024.

The company is expected to earn $5.21/share in 2025. 

The stock sells at 13.06 times forward earnings and yields 3.26% 

Fifth Third Bancorp (FITB) operates as the bank holding company for Fifth Third Bank, National Association that engages in the provision of a range of financial products and services in the United States. It operates through three segments: Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management. 

Fifth Third Bancorp raised its quarterly dividend by 8% to $0.40/share. This is the 15th consecutive annual dividend increase for this dividend achiever. The company has a 5 year annualized dividend growth rate of 7.73%.

The company grew earnings from $2.03/share in 2015 to $3.16/share in 2024.

The company is expected to earn $3.54/share in 2025. 

The stock sells at 12.78 times forward earnings and yields 3.51% 

New Jersey Resources Corporation (NJR) is an energy services holding company, which distributes natural gas. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation.

New Jersey Resources raised quarterly dividend by 5.60% to $0.475/share. This is the 30th consecutive annual dividend increase for this dividend champion. The company has a 5 year annualized dividend growth rate of 7.57%.

The company grew earnings from $2.12/share in 2015 to $2.94/share in 2024.

The company is expected to earn $3.22/share in 2025. 

The stock sells at 14.72 times forward earnings and yields 4.02% 

Realty Income (O), is real estate partner to the world's leading companies. As of June 30, 2025, it hasa portfolio of over 15,600 properties in all 50 U.S. states, the U.K., and seven other countries in Europe.

The REIT hiked monthly dividends to $0.2695/share, which is a 2.27% increase over the dividend paid during the same time last year.

Realty Income is a dividend aristocrat, which has managed to increase annual dividends since going public in 1994. The company has a 5 year annualized dividend growth rate of 3.56%.

Realty Income managed to grow FFO/share  from $2.77 in 2015 to $4.02 in 2024.

The REIT is expected to generate $4.28/share in FFO in 2025.

The stock sells for 14.07 times forward FFO and yields 5.32%.

U.S. Bancorp (USB) is a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions in the United States. The company operates through Wealth, Corporate, Commercial and Institutional Banking; Consumer and Business Banking; Payment Services; and Treasury and Corporate Support segments.

U.S. Bancorp raised quarterly dividends by 4% to $0.52/share. This is the 14th consecutive annual dividend increase for this dividend achiever.  The company has a 5 year annualized dividend growth rate of 3.55%.

The company grew earnings from $3.18/share in 2015 to $3.79/share in 2024.

The company is expected to earn $4.38/share in 2025. 

The stock sells at 11.26 times forward earnings and yields 4.06% 

Relevant Articles:

- Two Dividend Growth Companies With Raises Last Week

- Eleven Dividend Growth Stocks Raising Dividends Last Week

- Seven Dividend Growth Companies Raising Dividends Last Week

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Two Dividend Growth Companies With Raises Last Week

I review the list of dividend increases, as part of my monitoring process. This exercise helps me monitor existing companies, and also monitor the breadth in the dividend growth investing universe.

I usually focus on the companies that have managed to increase dividends annually for at least a decade. 

During the past week, there were two companies that both raised dividends and have a ten year track record of annual dividend increases under their belts:

Verizon Communications Inc. (VZ) engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business).

Verizon raised quarterly dividends by 1.90% to $0.69/share. This is the 19th consecutive annual dividend increase for this dividend achiever. 

Between 2015 and 2024, earnings per share went from $4.38 to $4.15.

The company is expecteed to earn $4.69/share in 2025.

The stock sells for 9.40 times forward earnings and yields 6.20%.

Brady Corporation (BRC) manufactures and supplies identification solutions and workplace safety products that identify and protect premises, products, and people in the Americas, Asia, Europe, and Australia.

Brady raised quarterly dividends by 2.10% to $0.245/share. This is the 40th consecutive annual dividend increase for this dividend champion.

Between 2015 and 2024, earnings per share went from $1.57 to $3.96.

The company is expecteed to earn $4.92/share in 2025.

The stock sells for 16.80 times forward earnings and yields 1.20%.

Relevant Articles:

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- Six Dividend Growth Stocks Raising Dividends Last Week

Start investing with the end goal in mind

Planning your retirement is one of the most challenging exercises in the world. There are plenty of ways, methods and advisors, who try to influence your choice with formulas and narratives. Some of these methods may work, while others will fail most of the time. Everyone’s situation is different of course, which further complicates things. The investment path and environment will vary from individual to individual as well. For example, your experiences will be different if you started retirement in 2012, versus starting retirement in 2007 or 1929.

Some lucky investors have the benefit of pensions in addition to social security. This alone can be enough to quit your job, albeit in your late 50s or early 60s.

Others plan to rely on a combination of investments, and withdraw a portion for so many years. There are hundreds of articles, papers and opinions on the best way to live off investments. I have read a portion of them, but have decided to largely focus elsewhere.

For my retirement, I plan to live off the dividends generated from my equity portfolio.

Dividend payments are more stable than share prices and the potential for capital gains, which makes them an ideal source of income for retirement. Historically, US dividend growth has exceeded the rate of inflation. This means that dividend income not only maintains purchasing power, but increases it over time.

I go a step further by focusing on companies that can grow those dividends, have adequate dividend payout ratios and are available at attractive valuations. By assembling a portfolio of carefully selected dividend growth stocks, I can easily see how much income my retirement portfolio generates right from day one. When I compare my dividend income to my expenses, I know exactly where I am on my journey towards financial independence or retirement. This is the so called the divided crossover point.

Dividends also take into consideration current valuation available to investors today. A lot of retirees rely on historically backtested studies that show how they will not outlive their money by withdrawing 4% of their portfolios annually. Unfortunately, some of these studies are using data from historical periods that may not be directly comparable with todays situation. If the data was for periods where bond yields were above 4% and dividend yields were above 4%, it may make sense that withdrawing 4% from a portfolio was sustainable ( even when prices largely went nowhere, such as the period between 1965 and 1982). The question is whether it makes sense to withdraw 4% from a portfolio today, during a time when bond yields are closer to 2% and equity dividend yields are closer to 2% as well.

These studies attempt to make up the difference by hoping for quick annual gains in principle. Unfortunately, it is difficult to predict what share or bond prices will do in the short run when you need to sell. While the yields themselves will vary, the dividend payments will not. Relative to share prices, dividend payments look like an ocean of stability. They make retirement planning to be a breeze.

I have decided to focus on dividend income, since it is easier to predict. For example, I am reasonably certain that Johnson & Johnson will pay at least $3.60/share in annual dividend income over the next 12 months. Chances are high that this dividend king will continue growing the dividend at least once during the same time as well. However, I have no idea whether the stock price will go above $150/share or below $100/share. If you plan to sell shares to pay for retirement expenses, it makes a difference whether you sell at a high price or at a low price. Unfortunately, no one can predict share prices. On the other hand, predicting dividend incomes is much easier. This is why I focus on dividend income for my retirement planning, and ignore share price fluctuations. I think like a business owner.

Again, I focus on analyzing each individual business, in order to determine if it can safely pay and grow dividends per share over time. I also focus on underlying valuations, in order to lock in a set rate of dividend yield today. I also go a step further, by trying to build out a diversified portfolio consisting of as many companies as possible that meet my basic criteria. Besides diversification by sector, I also try to diversity over time, in order to build my positions in these companies more gradually.

The focus on dividend income makes the transition from earning a paycheck to retirement much easier. When you work, you receive a paycheck once or twice per month. When you create a dividend portfolio, you generate dividend income that replaces those paychecks. In effect, with dividemd investing you are creating your own paycheck to live off in retirement.

Compared to my paycheck however, dividend income is more reliable because it is generated from at  least 30 – 60 global businesses, and not a single client ( employer). My job is to diversify, build over time, buy at the right valuation and ensure that the underlying profit machine is humming along nicely. When you start with the end in mind, and you keep at it, you can track your progress until you reach your own dividend crossover point.

To put things in perspective, I believe that it is relatively easy to create a diversified portfolio today with a starting yield of roughly 3%. This portfolio will have adequate sector allocations, and could be built out over a period of several months to an year, in order to take advantage of dollar cost averaging and the variety of different opportunities available at different periods. If you place $1,000 in such a portfolio, it can easily generate $30 in annual dividend income today. If history is any guide, this dividend income will increase over time at or above the rate of inflation.

An investor who needs $30,000 in retirement income can get there by potentially investing $1,000,000. Few investors have this type of cash ready to be deployed however. The mindset of viewing income and expenses through the lens of dividend income investing however, can change you. The investor can see that if they only require $24,000 in annual retirement income, they need a nest egg with $800,000 today. However, if they need $36,000 to live off in retirement, they will need a nest egg worth $1,200,000.

For each extra dollar of extra expenses in retirement, our investor will have to save $33 extra dollars. These 33 extra dollars, invested at a 3% starting yield will generate one dollar in dividend income for ever. If you increase expenses by $10,000/year, prepare to come up with an extra $333,000. This can take quite a few years of hard work to accumulate.

Alternatively, if our investor manages to cut expenses, they can rest assured that for reducing each dollar in annual expenses, they need to save and invest $33 less. If you decrease expenses by $10,000/year, you can retire with a nest egg that is $333,000 less than originally expected. If you are the average person, the fact that you need to save a lower amount for retirement means that you can also retire earlier.

As I mentioned above, few investors have $1,000,000 to invest right from the start. However, if you choose to invest regularly over a set period of time, you can get there within a reasonable period of time. The inputs will vary from individual to individual of course, because different investors can invest different amounts every month. The conditions will vary as well.  For example, when I invested in 2008 - 2010, it was much easier to find quality companies yielding 4% than it is today.  However, if you keep investing regularly, keep reinvesting dividends, and manage to put money to work in a diversified portfolio of quality blue chip dividend payers, you may reach that goal in a reasonable amount of time.

For example, lets look at how long it would take you to reach $30,000 in annual dividend income if you invest $3,000 per month in dividend growth stocks. Let's assume an average yield of 3% and an average dividend growth of 6%/year. We will assume automatic reinvesting of dividends.

At this rate, it would take the investor roughly 14 years to reach their goals. This is not bad.
If money is tight, and our investor can only afford to put $2,000 to work each month, they can reach their goal within roughly 17.50 years. If the investor can put only $1,000 to work every month, they will be able to generate $30,000 in annual dividend income after 24 years. I used the spreadsheet in this article to calculate the different scenarios.

In this article, I showed that it pays to focus on the end goal in mind when investing for retirement. The first step involves coming up with a target monthly dividend income to pay for retirement expenses. The next step involves creating a dividend strategy that allows the investor to build a dividend portfolio that showers them with a growing stream of dividend income. Depending on current condition, investors can see how each dollar they invest generates a certain amount of dividend income. As a result, investors can see their progress towards the coveted dividend crossover point after every new investment they make, after every dividend increase and after every single action to reinvest dividends. By investing regularly, keeping investment costs low, and sticking to their strategy through thick or thin, our investors have a very high chance of hitting their retirement objectives.

Thank you for reading!

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Eleven Dividend Growth Stocks Raising Dividends Last Week

I review the list of dividend increases every week, as part of my monitoring process.This exercise helps me stay in touch with changes in the dividend growth investing universe. It's helpful to see how companies are performing in real time. The most recent dividend increases provide a good signaling mechanism for my monitoring process of various businesses. This is a helpful step in monitoring existing companies and potentially uncovering companies for further research.

This exercise also summarizes the key factors I look at the business level, before determining if I want to dive further into a company.

Over the past week, there were 17 companies that raised dividends. Eleven of these companies have managed to raise dividends for at least a decade. The companies include:

Altria Group, Inc. (MO) manufactures and sells smokeable and oral tobacco products in the United States.

The company raised its quarterly dividend by 3.92% to $1.06/share. This is the 56th consecutive annual dividend increase for this dividend king. Over the past five years, the company has managed to grow dividends at an annualized rate of 3.84%.

The company managed to grow earnings from $2.67/share in 2015 to $6.54/share in 2024. The company is expected to earn $5.44/share in 2025.

The stock trades at 12.44 times forward earnings and yields 6.27%.

American Financial Group, Inc. (AFG) is an insurance holding company, provides specialty property and casualty insurance products in the United States. 

The company raised its quarterly dividend by 10% to $0.88/share. This is the 20th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 12.17%.

The company managed to grow earnings from $4.02/share in 2015 to $10.57/share in 2024. The company is expected to earn $9.44/share in 2025.

The stock trades at 14.26 times forward earnings and yields 2.61%.

Avnet, Inc. (AVT) distributes electronic component technology in the Americas, Europe, the Middle East, Africa, and Asia/Pacific. It operates through two segments, Electronic Components and Farnell. 

The company raised its quarterly dividend by 6.06% to $0.35/share. This is the 13th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of  9.31%.

The company's earnings went from $3.87/share in 2015 to $2.78/share in 2024. The company is expected to earn $4.57/share in 2025.

The stock trades at 12.17 times forward earnings and yields 2.52%.

Dillard's, Inc. (DDS) operates retail department stores in the southeastern, southwestern, and midwestern areas of the United States. 

The company raised its quarterly dividend by 20% to $0.30/share. This is the 15th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 17.32%.

The company managed to grow earnings from $6.91/share in 2015 to $36.82/share in 2024. The company is expected to earn $30.07/share in 2025.

The stock trades at 17.75 times forward earnings and yields 0.22%.

Popular, Inc. (BPOP) provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. 

The company raised its quarterly dividend by 7.14% to $0.75/share. This is the 11th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 15.63%.

The company's earnings went from $8.66/share in 2015 to $8.56/share in 2024. The company is expected to earn $11.35/share in 2025.

The stock trades at 10.75 times forward earnings and yields 2.46%.

EastGroup Properties, Inc. (EGP) is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in high-growth markets throughout the United States with an emphasis in the states of Texas, Florida, California, Arizona and North Carolina. 

The company raised its quarterly dividend by 10.71% to $1.55/share. This is the 14th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 12.35%.

The company managed to grow FFO from $3.67/share in 2015 to $8.35/share in 2024. The company is expected to earn $8.96/share in 2025.

The stock trades at 18.90 times forward FFO and yields 3.66%.

Intuit Inc. (INTU) provides financial management, compliance, and marketing products and services in the United States. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax. 

The company raised its quarterly dividend by 15.40% to $1.20/share. This is the 14th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 14.03%.

The company managed to grow earnings from $3.74/share in 2015 to $13.82/share in 2024. The company is expected to earn $23.02/share in 2025.

The stock trades at 28.78 times forward earnings and yields 0.72%.

MGE Energy, Inc. (MGEE) operates as a public utility holding company in the United States. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other segments.

The company raised its quarterly dividend by 5.56% to $0.475/share. This is the 50th consecutive annual dividend increase for this newly minted dividend king. Over the past five years, the company has managed to grow dividends at an annualized rate of 4.93%.

The company managed to grow earnings from $2.06/share in 2015 to $3.33/share in 2024. The company is expected to earn $3.65/share in 2025.

The stock trades at 24.06 times forward earnings and yields 2.17%.

Stock Yards Bancorp, Inc. (SYBT) operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T.

The company raised its quarterly dividend by 3.23% to $1.20/share. This is the 16th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 3.24%.

The company managed to grow earnings from $1.68/share in 2015 to $3.91/share in 2024. The company is expected to earn $4.61/share in 2025.

The stock trades at 17.71 times forward earnings and yields 1.57%.

United Bancorp, Inc. (UBCP) operates as the bank holding company for Unified Bank that provides commercial and retail banking services in Ohio.

The company raised its quarterly dividend by 1.35% to $0.1875/share. This is the 13th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 5.28%.

The company managed to grow earnings from $0.65/share in 2015 to $1.27/share in 2024. The company is expected to earn $1.32/share in 2025.

The stock trades at 10.87 times forward earnings and yields 5.23%.

Unity Bancorp, Inc. (UNTY) operates as the bank holding company for Unity Bank that provides commercial and retail banking services.

The company raised its quarterly dividend by 7.14% to $0.15/share. This is the 14th consecutive annual dividend increase for this dividend achiever. Over the past five years, the company has managed to grow dividends at an annualized rate of 10.90%.

The company managed to grow earnings from $1.03/share in 2015 to $4.13/share in 2024. The company is expected to earn $5.32/share in 2025.

The stock trades at 9.81 times forward earnings and yields 1.15%.

Relevant Articles:

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Seven Dividend Growth Companies Raising Dividends Last Week

I review the list of dividend increases every week as part of my monitoring process. This exercise helps me review existing holdings quickly and potentially uncover hidden gems for further research.

It's a prime example of the types of data I use to quickly determine if a company should be placed on my list for further research or not. That's because it shows you all the important drivers behind stock market wealth creation.

Namely, dividends, growth in earnings per share and valuation. The interplay between these three items determine if you are going to make money or not. Your future returns are dependent on finding a good quality company at a good entry valuation, which keeps delivering on its growth, while patiently reinvesting those growing distributions.

Anywho, there were a little over 20 companies raising dividends last week. Seven of these companies managed to increase dividends last week AND also have a ten year track record of annual dividend increases under their belt. The companies include:

Cboe Global Markets, Inc. (CBOE) operates as an options exchange in the United States and internationally. It operates through six segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital.

The company raised quarterly dividends by 14.30% to $0.72/share. This is the 15th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 11.70%.

The company has managed to grow earnings from $2.46/share in 2015 to $7.24/share in 2024.

The company is expected to earn $9.68/share in 2025.

The stock sells for 32.30 times forward earnings and yields 0.52%.

Dover Corporation (DOV) provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. 

The company increased quarterly dividends by 1% to $0.52/share. This is the 70th consecutive year in which this dividend king has increased its annual cash dividend. Over the past decade, the company has managed to grow dividends at an annualized rate of 2.84%.

The company has managed to grow earnings from $5.52/share in 2015 to $10.16/share in 2024.

The company is expected to earn $9.48/share in 2025.

The stock sells for 18.62 times forward earnings and yields 1.18%.

J&J Snack Foods Corp. (JJSF) manufactures, markets, and distributes nutritional snack food and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates through three segments: Food Service, Retail Supermarkets, and Frozen Beverages. 

The company raised quarterly dividends by 2.60% to $0.80/share. This is the 20th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 8.80% over the past decade.

Between 2015 and 2024, the company managed to grow earnings from $3.76/share to $4.46/share.

The company is expected to earn $4.10/share in 2025.

The stock sells for 27.17 times forward earnings and yields 2.80%.

Martin Marietta Materials, Inc. (MLM) is a natural resource-based building materials company, which supplies aggregates and heavy-side building materials to the construction industry in the United States and internationally.

The company raised quarterly dividends by 5.10% to $0.83/share. This is the 10th consecutive annual dividend increase for this newly minted dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 6.70%.

The company has managed to grow earnings from $4.31/share in 2015 to $32.49/share in 2024.

The company is expected to earn $18.87/share in 2025.

The stock sells for 32.30 times forward earnings and yields 0.52%.

MGE Energy, Inc. (MGEE) operates as a public utility holding company in the United States. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other segments.

The company hiked quarterly dividends by 5.60% to $1.90/share. This marked the 50th consecutive year of annual dividend increases for this newly minted dividend king. Over the past decade, the company has managed to grow dividends at an annualized rate of 4.70%.

The company managed to grow earnings from $2.06/share in 2015 to $3.33/share in 2024.  It's on track to earn $3.58/share in 2025.

The stock sells for 23.50 times forward earnings and yields 2.15%.

RB Global, Inc. (RBA) operates a marketplace that provides insights, services, and transaction solutions for buyers and sellers of commercial assets and vehicles worldwide. 

The company raised quarterly dividends by 6.90% to $0.31/share. This is the 23rd consecutive annual dividend increase for this dividend achiever. Over the past decade the company has managed to grow dividends at an annualized rate of 9.25%.

The company managed to grow earnings from $1.7/share in 2015 to $2.91/share in 2024.

The company is expected to earn $5.03/share in 2025.

The stock sells for 31.55 times forward earnings and yields 1.07%.

United Community Banks, Inc. (UCB) operates as the bank holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors in the United States. 

The company raised quarterly dividend by 4.20% to $0.25/share. This is the 11th consecutive annual dividend increase for this dividend achiever. Over the past 5 years, the company has managed to grow dividends at an annualized rate of 7.10%.

The company has managed to grow earnings from $1.09/share in 2015 to $2.04/share in 2024.

The company is expected to earn $2.65/share in 2025.

The stock sells for 11.77 times forward earnings and yields 3.08%.

Relevant Articles:

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Six Dividend Growth Stocks Raising Dividends Last Week

I review the list of dividend increases every week as part of my review process.

There were 35 dividend increases over the past week. Six of these companies have managed to raise dividends for at least ten consecutive years. The companies include:

Badger Meter, Inc. (BMI) manufactures and markets flow measurement, quality, control, and communication solutions worldwide. 

Badger Meter raised quarterly dividends by 18% to $0.40/share. This is the 33rd consecutive year of dividend increases for this dividend champion. During the past decade, the company has managed to grow dividends at an annualized rate of 13.60%.

Between 2015 and 2024, the company has managed to grow earnings from $0.90/share to $4.26/share.

The company is expected to earn $4.79/share in 2025.

The stock sells for 39.25 times forward earnings and yields 0.85%.

Broadridge Financial Solutions, Inc. (BR) provides investor communications and technology-driven solutions for the financial services industry in the United States and internationally. 

Broadridge Financial raised quarterly dividends by 10.80% to $0.975/share. This is the 19th consecutive annual dividend increase for this dividend achiever. During the past decade, the company has managed to grow dividends at an annualized rate of 12.54%.

Between 2016 and 2025, the company has managed to grow earnings from $2.60/share to $7.70/share.

The company is expected to earn $9.39/share in 2025.

The stock sells for 28.41 times forward earnings and yields 1.46%.

Carlisle Companies Incorporated (CSL) operates as a manufacturer and supplier of building envelope products and solutions in the United States, Europe, North America, and internationally. It operates through two segments, Carlisle Construction Materials (CCM) and Carlisle Weatherproofing Technologies (CWT). 

Carlisle Companies raised quarterly dividends by 10% to $1.10/share. This was the 49th consecutive annual dividend increase for this dividend champion. During the past decade, the company has managed to grow dividends at an annualized rate of 14.87%.

Between 2015 and 2024, the company has managed to grow earnings from $4.89/share to $28.17/share.

The company is expected to earn $20.34/share in 2025.

The stock sells for 17.44 times forward earnings and yields 1.20%.

Federal Realty (FRT) is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as Northern and Southern California. 

Federal REIT raised quarterly dividend by 2.70% to $1.13/share. This is the 58th consecutive year of dividend increases for this dividend king. The company has managed to grow dividends by an annualized rate of 2.37% over the past decade.

Between 2015 and 2024, the REIT has managed to grow FFO from $5.05/share to $6.77/share

It's expected to generate $7.17/share in FFO in 2025.

The stock sells for 13 times forward FFO and yields 4.81%.

Open Text Corporation (OTEX) designs, develops, markets, and sells information management software and solutions in North, Central, and South America, Europe, the Middle East, Africa, Australia, Japan, Singapore, India, China, and internationally. 

Open Text raised the quarterly dividend by 4.80% to $0.275/share. This was the 12th consecutive annual dividend increase for this dividend achiever. During the past decade, the company has managed to grow dividends at an annualized rate of 13.17%.

Between 2015 and 2024, the company has managed to grow earnings from $1.20/share to $2.34/share.

The company is expected to earn $5.53/share in 2025.

The stock sells for 7.12 times forward earnings and yields 3.55%.

Terreno Realty Corporation (TRNO) acquires, owns and operates industrial real estate in six major coastal U.S. markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. 

Terreno Realty increased quarterly dividend by 6.10% to $0.52/share. This was the 14th consecutive annual dividend increase for this dividend achiever. During the past decade, the company has managed to grow dividends at an annualized rate of 12.20%.

FFO/share increased from $0.84 in 2015 to $2.43 in 2024. The company is expected to generate $2.59/share in FFO in 2025.

The stock sells for 21.08 times forward FFO and yields 3.59%.

Relevant Articles:

- Fifteen Dividend Companies Raising Distributions Last Week

- Twenty Dividend Growth Companies Rewarding Owners With Raises Last Week

- Four Dividend Growth Stocks Increasing Dividends Last Week

- Nine Dividend Achiever Banks Raising Dividends After Passing the Fed's Stress Tests

Twenty Dividend Growth Companies Rewarding Owners With Raises Last Week

I review the list of dividend increases every single week, as part of my monitoring process. This process helps me check the pulse of the dividend growth investing universe.

It's helpful to monitor developing trends in newer companies, and to monitor trends in more established ones as well. The dividend increase provides strong signaling signal to me, as to the direction of the business. It's particularly helpful when compared to historical averages. For even more context, it's helpful to take it one step further and review ten year trends in financials such as earnings per share, dividends per share, dividend payout ratios etc. Last but not least, you have to look at valuation, which is more art than science.

Anyways, last week there were 41 companies in North America that raised dividends to shareholders. Twenty of these companies have a minimum ten year streak under their belts. 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.

Relevant Articles:

- Fifteen Dividend Companies Raising Distributions Last Week

- Seven Dividend Growth Stocks Raising Dividends Last Week

- Four Dividend Growth Stocks Increasing Dividends Last Week

- Nine Dividend Achiever Banks Raising Dividends After Passing the Fed's Stress Tests

S&P 500 Annualized Returns by Decade

Breaking down the total returns by source, helps you understand perfectly how total returns are generated

Total Returns are a function of:

1. Dividends

2. Earnings Per Share Growth

3. Change in valuation

The first two items matter the most in the long run; the last matters the most in the short run.

Ultimately, the trade-offs between each item on a given time period determine total returns overall.

As Benjamin Graham aptly summarized it, "In the short-run, the market is a voting machine. In the long-run, the market is a weighting machine."

I recently found a chart that breaks down S&P 500 returns by decade, starting in 1880 and ending in 2019.

It's fascinating to understand how annualized total returns were generated by looking at the interplay between those sources of returns.

For example, during the first decade of the 2000s, total returns were driven mostly by dividends, as share prices declined due to multiple's decreasing. Earnings growth was muted as well. This is when a lot of investors realized that trees don't always grow to the sky.

The 2010s however showed a completely different picture. The dividend portion of total returns was smaller and overshadowed by changes in earnings growth, and aided slightly by changes in the multiple.

Overall, changes in the multiple tend to produce big swings in the positive or the negative direction. However, these tend to revert to the mean over time. Ultimately, the longer your timeframe, the lower the impact of multiple changes on total returns. However, the shorter the timeframe, the higher the impact of the multiple changes on total returns. However, be advised that multiple changes are properly titled as "speculative" source of returns. That's because it's heavily influenced by the short-term views of Mr Market.

For example, in the 1970s, valuations multiple shrank, which subtracted a steep 8.30%/year from annualized returns. Paying a high valuation in the late 1960s turned out to be a headwind to shorter term returns. While a decade is "short-term", holding through a painful decade definitely doesn't feel short-term.

However, in the 1980s, valuations expanded, which added 8.20%/year to annualized returns. It's definitely a good situation to be in when you can buy stocks on the cheap, and then they deliver earnings growth, solid dividends and the multiples expand too.

This type of a model is directly applicable to studying individual companies as well. This is why I find it helpful to evaluate dividend growth and earnings growth for each company I review, and then also review that in tandem with valuation multiples such as dividend yield and P/E ratio. It's important to look at the bigger picture, and not get stuck on one item however.

Thank you for reading!

Fifteen Dividend Companies Raising Distributions Last Week

 As part of my monitoring process, I review the list of dividend increases every week. I usually focus on companies that have managed to boost dividends to shareholders for at least a decade (with one exception this week). 

There were 30 companies that raised dividends in the US last week. Fifteen of them have increased dividends for at least ten years in a row.

The companies that raised their dividends to shareholders are listed 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.

Relevant Articles:

- Seven Dividend Growth Stocks Raising Dividends Last Week

- Four Dividend Growth Stocks Increasing Dividends Last Week

- Nine Dividend Achiever Banks Raising Dividends After Passing the Fed's Stress Tests

- Three Dividend Growth Companies Raising Dividends Last Week

The 10 largest Dividend Growth Companies in the US

Dividend Growth Companies are businesses that have managed to increase annual dividends for several years in a row. Typically, established dividend growth companies need at least 10 years of annual dividend increases before they could be added to the dividend achievers list. If they have at least a 25 year track record, they are added either to the list of dividend aristocrats (if they are members of S&P 500) or the dividend champions list. Some folks also use a 5 year track record to establish presence in the dividend growth investing universe, believing that they can potentially identify future stars earlier than everyone else.

I wanted to take a look at the ten largest Dividend Growth Companies in the US, in order to look for value. I narrowed the list down to the largest publicly traded companies in the US, which have managed to increase dividends for at least 10 years in a row.

These are well-known, established and highly followed and widely owned companies. If you had bought them a decade ago, you would have locked in good starting valuations, and enjoyed a decade of solid dividend growth and total returns. All of those were driven by growth in earnings per share over the past decade.

The question of course is whether they are worth adding to today. Let's take a look at them:

Frankly, those companies all look expensive to me. Perhaps J.P. Morgan Chase is the one that looks close to fairly valued today, albeit 15 times for a financial and a dividend yield below 2% may be a stretch too.

I love the dividend growth stats for Microsoft, Broadcom, Eli Lilly, Visa, Mastercard and Costco. However, those multiples are pretty steep if you ask me. I would not pay more than 25 forward for these growth stories, in order to get some margin of safety in case growth slows down and to take into consideration the risk I am taking. It is quite possible that a lost decade where P/E multiples shrink could cause low returns, even if growth turns out to be reliable and durable (which it is not always the case). If I start out with a low yield in the first place, I may not be paid much to wait either. Either way, I love those companies and would love to buy/add to them at the right price. 

In the case of Apple, I dislike the high valuation and the slowdown in dividend growth. Plus, the dividend yield is low. Hence if earnings stagnate from here there is low margin of safety and I am not paid much to wait.

Wal-Mart is expensive as well, given their slow dividend growth and low yield. The company is trying to transform its business to better compete with online retailing, which has taken out some capital from dividend growth initiatives. They are starting to crank up dividend growth again, but the valuation is still rich for a large company like that. I would love to buy more at the right valuation.

As for Exxon Mobil, it is optically cheap at a 16 times forward earnings and a dividend yield of 3.67%. This is a company that has paid dividends for decades, and increased them for 42. They didn't cut dividends during the past decade, which was very hard on the energy sector, amidst glut of production, disruptions, and negative prices at one point in 2020. Hence I have a high degree of confidence (as much as you can have confidence of course) that this dividend is important to management and shareholders, and won't be just cut on a whim. However, dividend growth has been very slow in the past decade. The business was not easy in the past decade however, and a lot of competitors ended up cutting or suspending dividends at least once in the past decade. Hence, that slow growth in dividends is actually a win.

Well, there you have it, my opinion on the largest dividend growth companies in the US. Note, they are weighted heavily in several popular dividend growth funds in the US. Unfortunately, those valuations are high, which could weigh on future returns.

The other fun fact to consider is that the ten largest dividend growth companies of 2035 mey turn out to be a list that is much different than this list above.

Just for reference, the ten largest dividend growth companies in 2015 were:

Wal-Mart, Johnson & Johnson, Coca-Cola, PepsiCo, Qualcomm, Exxon Mobil, CVS Health, IBM, 3M and United Technologies.

Either way, the way to succeed is to find good quality dividend growers, but acquire them at a good valuation.

Seven Dividend Growth Stocks Raising Dividends Last Week

I review the list of dividend increases every single week, as part of my monitoring process. This exercise helps me to monitor existing holdings. It also helps me potentially identify companies for further research.

I typically focus my attention on the companies with a ten year track record of annual dividend increases. 

Over the past week, there were seven companies that both raised dividends to shareholders and also have a ten year streak of consecutive annual dividend increases. I have included a short summary behind each company, the raise, and the type of fundamental and valuation information I use to quickly decide if a company should be placed on my list for research or not.

The nine companies are listed below:

Community Financial 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, institutional, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. 

The company raised quarterly dividends by 2.2% to $0.47/share. This is the 33rd consecutive year of dividend increases for this dividend champion. The annualized dividend growth rate over the past decade is 4.73%.

The company managed to grow earnings from $2.21/share in 2015 to $3.45/share in 2024.

The company is expected to earn $4.08/share in 2025.

The stock sells at 14.33 times forward earnings and has a dividend yield of 3.15%.

Cummins Inc. (CMI) offers various power solutions worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera. 

The company raised quarterly dividends by 9.90% to $2/share. This is the 20th consecutive year of dividend increases for this dividend achiever. The annualized dividend growth rate over the past decade is 9.56%.

The company managed to grow earnings from $7.86/share in 2015 to $28.55/share in 2024.

The company is expected to earn $21.05/share in 2025.

The stock sells at 16.54 times forward earnings and has a dividend yield of 2.30%.

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 raised quarterly dividends by 1.90% to $1.065/share. This is the 21st consecutive annual dividend increase for this dividend achiever. The annualized dividend growth rate over the past decade is 2.77%.

The company managed to grow earnings from $4.06/share in 2015 to $5.70/share in 2024.

The company is expected to earn $6.32/share in 2025.

The stock sells at 18.59 times forward earnings and has a dividend yield of 3.63%.

NNN REIT (NNN) invests in high-quality properties subject generally to long-term, net leases with minimal ongoing capital expenditures. 

This REIT increased the quarterly dividend by 3.40% to $0.60/share. This dividend champion has increased its annual dividend for 36 consecutive years. The annualized dividend growth rate over the past decade is 3.33%.

NNN REIT managed to grow FFO fom $2.22/share in 2015 to $3.32/share in 2024.

The company is expected to generate $3.38/share in FFO in 2025.

The stock sells at 12.64 times forward FFO and has a dividend yield of 5.62%.

PPG Industries, Inc. (PPG) manufactures and distributes paints, coatings, and specialty materials in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through three segments: Global Architectural Coatings, Performance Coatings, and Industrial Coatings. 

The company raised quarterly dividends by 4.40% to $0.71/share. This is the 54th consecutive annual dividend increase for this dividend king. The annualized dividend growth rate over the past decade is 7.34%.

The company's earnings went from $5.18/share in 2015 to $4.77/share in 2024.

The company is expected to earn $7.86/share in 2025.

The stock sells at 14.77 times forward earnings and has a dividend yield of 2.34%.

The J. M. Smucker Company (SJM) manufactures and markets branded food and beverage products worldwide. The company operates through four segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks.

The company increased the quarterly dividend by 1.90% to $1.10/share. This is the 28th consecutive annual dividend increase for this dividend champion. The annualized dividend growth rate over the past decade is 5.78%.

The company's earnings went from $5.77/share in 2015 to a loss of $11.57/share in 2024, driven by one-time charges.

The company is expected to earn $9.22/share in 2025.

The stock sells at 11.82 times forward earnings and has a dividend yield of 3.97%.

Union Pacific Corporation (UNP) Union Pacific Railroad Company, operates in the railroad business in the United States.

The company announced a 3% dividend increase to the quarterly dividends to $1.38/share. This dividend achiever has managed to increase annual dividends for 19 years in a row. The annualized dividend growth rate over the past decade is 11.33%.

The company's earnings went from $5.51/share in 2015 to $11.10/share in 2024.

The company is expected to earn $11.58/share in 2025.

The stock sells at 19.64 times forward earnings and has a dividend yield of 2.36%.

Relevant Articles:

- Four Dividend Growth Stocks Increasing Dividends Last Week

- Nine Dividend Achiever Banks Raising Dividends After Passing the Fed's Stress Tests

- Three Dividend Growth Companies Raising Dividends Last Week

- Seven Dividend Growth Companies Raising Dividends Last Week

Four Dividend Growth Stocks Increasing Dividends Last Week

I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing companies, and also potentially identify companies for further research.

In my reviews, I focus on companies that have managed to increase dividends for at least ten consecutive years. I also drill down on understanding whether dividend growth was supported by rising earnings per share. In addition, I want to compare the most recent dividend increase to the historical average.

Last but not least, I want to look at valuation. Valuation is part art, part science. It takes into consideration the current P/E, and dividend yield, along with growth in earnings and dividends, and then making an extrapolation about the future.

During the past week, there were four companies that announced increases in their quarterly dividends, which also have a ten year minimum streak of consistent annual dividend increases. The companies include:

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. It operates in four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services.

Enterprise Products Partners raised its quarterly distribution to $0.545/unit. This is a 3.80% increase over the distribution paid during the same time last year. This dividend champion has increased annual distributions to partners since 1998.

Over the past decade, EPD has managed to boost distributions at an annualized rate of 3.73%.

The partnership yields 6.80%. 

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

The company raised quarterly dividends by 10.40% to $0.90/share. This is the 16th year of consecutive annual dividend increases for this dividend achiever. The company has managed to boost dividends at an annualized rate of 11.28% over the past decade.

Between 2015 and 2024, earnings per share increased from $3.01 to $8.25.

The company is expected to earn $9.58/share in 2025.

The stock sells for 22.40 times forward earnings and yields 1.70%.

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). 

Ryder raised its quarterly dividends by 12.30% to $0.91/share. This is the 21st consecutive year of dividend increases for this dividend achiever. The company has managed to boost dividends at an annualized rate of 8.15% over the past decade.

Between 2015 and 2024, earnings per share increased from $5.75 to $11.28.

The company is expected to earn $12.88/share in 2025.

The stock sells for 13.70 times forward earnings and yields 1.84%.

Unum Group (UNM) provides financial protection benefit solutions in the United States, the United Kingdom, and Poland. It operates through Unum US, Unum International, Colonial Life, and Closed Block segment.

The company raised quarterly dividends by 9.5% to $0.46/share. This is the 17th consecutive annual dividend increase for this dividend achiever.  The company has managed to boost dividends at an annualized rate of 9.79% over the past decade.

Between 2015 and 2024, earnings per share increased from $3.51 to $9.49.

The company is expected to earn $8.90/share in 2025.

The stock sells for 9 times forward earnings and yields 2.30%.

Relevant Articles:

- Nine Dividend Achiever Banks Raising Dividends After Passing the Fed's Stress Tests

- Three Dividend Growth Companies Raising Dividends Last Week

- Two Dividend Achievers Increasing Dividends Last Week

- Nine Companies Raising Dividends Last Week

Consumer Staples Have Some Value Left

There is some news around the consumer staples, which is a popular bread and butter sector for many dividend growth investors. It looks like the sector has some value, that could be unlocked by private buyers or spin-offs.

Last week, Ferrero Group announced that it will acquire WK Kellogg (KLG) for $23/share.

Back in 2023, Kellogg's split into WK Kellogg (KLG) and Kellanova (K). Kellanova itself is in the process of being acquired by Mars Inc

Today, Kraft Heinz is rumored to be planning to split off its grocery business, from its sauce and spreads business. In effect splitting into a Kraft and a Heinz. That could unlock some value, and potentially get someone else to bid up for those separate companies.

Looks like there is some value left in consumer staple brands after all. Perhaps those deals are a sign that public market valuations are lower than what the intrinsic values to a private buyer would be.

For those who like to play the relative performance game, the consumer staples sector (XLP) has lagged the averages in the past 15 years.

Of course, it really did much better in the lost decade of the 2000s and then some.

Those companies have managed to weather many storms, and succeed in a slow and steady fashion.

It's fascinating to look under the hood on the staples etf. 

The two largest companies, Costco (COST) and Walmart (WMT),  are not what many of us would consider to be a consumer staple. 

These sector classifications are indeed something, arent' they?

There is some untapped value there I think, in the traditional consumer staples space however. These companies can weather storms well, but also deliver returns when things are good too. 

There are some risks to some companies in the sector, though these companies have also been known to manage a ton of risks and obstacles over the decades, and overcome them. 

These strong brands have some pricing power left too, along with some loyal customer following. Yes, consumers are squeezed, and yes there is always the risk of generics and probably other risks as well     ( Ozempic for some). But these companies have also managed to overcome those risks in the past, so perhaps they'd pull another trick from up their sleeves.

There's probably a reason why there are so many consumer staples in the list of the best performing companies over the past half a century or so..

Even an average return can compound to a lot of wealth if left uninterrupted for a long time..

That being said, one should always use the type of logical evaluation of each company, before investing in my opinion. On my end this means requiring a long history of dividend increases, that is supported by growth in earnings per share. I also want an adequate dividend payout ratio as well as a good valuation.  This provides some margin of safety for the diversified dividend growth investor.

Warren Buffett's investment in Coca-Cola

Warren Buffett's investment in Coca-Cola (KO) is really fascinating.

He started buying it in 1988 after the 1987 Stock Market crash.

Buffett built his position in Coca-Cola by the end of 1994, and his average cost is $3.25/share. 

The stock sold for a P/E of 12 - 15 in 1988.

However, it grew EPS from $0.153 in 1987 to $0.495 in 1994 (adj for splits). Then it grew again to $0.82/share in 1997, before hitting a short-term snag.

You can view the trends in earnings per share, share price and dividends between 1984 and 2003

The 1990s were are great time for US multi-national branded companies, as a lot of new markets opened for them. Demand increased as well, while they also maintained pricing power too.

In the meantime, the company's "quality" was re-descovered and investors bid it up to much higher P/E ratios.

In hindsight, one could argue that Warren Buffett should have sold out of Coca-Cola in 1997 - 1998, when it sold at a P/E above 30. 

The problem with this thinking is that it wreaks of hindsight bias. It's easy to see the top, and apply "criteria" after the fact when you have perfect hindsight.

The reality of making such rash decisions in real-time is much more complicated. For example, Coca-Cola stock was equally overvalued in 1991, selling above 30 times earnings as well. If you had sold back then at a high price of $10.22/share, you would have missed out on all the upside from 1991 to 1998, when it reached over $44/share. And not including dividends even. Valuation based timing only works perfectly with the benefit of hindsight, but rarely in real time.

Of course, selling would have also triggered steep corporate taxes of 35% or so. So if they sold at close to the all-time-highs at $43.25/share in 1998, they'd have realized a gain of $40/share. The IRS would have taken away $14/share in taxes. Of course, it is impossible to sell at the very top. It is also impossible to just sell 400 Million shares just like that, which represents a very high percentage ownership of the float. This sale by Buffett would have depressed the share price, so they would have had to sell at a lower price, even if they knew where the top and bottom would be (which is impossible) on top of losing a steep amount of value in taxes on capital gains.

As a corporation, Berkshire Hathaway does not get a preferential tax rate on realized capital gains. They do get a preferential tax rate on dividends, due to the dividends received deduction. 

Because of those taxes, it seems like selling Coca-Cola stock in 1997 - 1998 and investing in a diversified basket of equity investments would have been a moot point (due to the 35% tax on gains, the fact that Buffett's sales would have depressed the stock price and the fact that he would have missed out on all those dividends over the decades).

The best part of course is that Buffett never reinvested those Coca-Cola dividends that were received over the years. I calculate that since 1994, Berkshire has received over $29/share in dividends for Coca-Cola.

Even better is the fact that dividends are taxed at preferential rates for Berkshire Hathaway, because of the dividend received deduction.  Capital gains are taxed at worse tax rates for Berkshire Hathaway than dividends, because Berkshire is a corporation.

That dividend money has been invested at high rates of returns that Buffett has achieved interally into others stocks and businesses. Which means that market timing was not really necessary.

Today, Coca-Cola's growth has slowed down, as the company is expected to earn $2.97/share. But it's not out yet.

The company pays an annual dividend of $2.04/share, which represents an yield on cost of 62.76% for Berkshire. This means that every 18 months, Buffett's holding company gets its original cost back in dividends alone. Dividends are a return on investment and a return of investment.

Plus, at $69.48/share, Buffett is sitting at a nice unrealized gain of $666.23 per share (reminder his cost is $3.25/share)

The nice thing is that since 1994, he has received $29.27 in dividends per each share he owns.

Today, this investment is worth almost $28 Billion and generates $816 million in annual dividends.

That dividend money has been deployed by Buffett into the best opportunities he could find, at the ROI he requires.

Returns of S&P 500 Index Stocks by Dividend Policy

I am a big fan of Dividend Growth Investing. I like the mental model of Dividend Growth Investing, where a rising stream of annual dividend increases that spans over many years is a sign of a quality business. Characteristics of quality businesses include generating excess cashflows, high returns on investment, wide moats/competitive advantages and dominant market position and brand power. It also means have a business model that is not too cyclical either. Perhaps some pricing power as well.

Only a good business can afford to grow and also throw off a rising torrent of cash annually for many decades. If you generate a high return on invested capital, you know that there are only so many opportunitities in the physical world to deploy at that high rate of return anyways. Hence, a quality company with a 20% return on capital can afford to reinvest half of profits to grow EPS at 10%/year, while a mediocre company with a return on capital of 8% would have to reinvest everything to potentially grow EPS at 8%/year.

That ROI provides a good yardstick, and focuses management's attention only on those high value projects. The rest is sent back to shareholders.

In other words, a consistent history of dividend increases is the end result of having a quality business that has grown the bottom line for a long time. 

If you look at the statistics of many of America's great businesses, you see rising earnings per share over time, which fuels rising dividends per share and rising share prices over time as well. The issue of course is that share prices tend to be more volatile than the dividends and earnings.

Now, there are many good businesses in the world. There are also many businesses in different stages of their lifecycle.

For example, a start-up is unlikely to be paying dividends. However, most start-ups are lottery tickets, because the likelihood they will survive is very very low. 

Companies in their decline/the end of their lifecycle also cannot pay dividends, because they are struggling for their survival.

The middle point, where a company is established and thrives is where you get to see dividend growth appear.

Most quality companies cannot reinvest everything they earn at a high rate of return. Hence why they send it back to shareholders in the form of dividends. Very few quality and established companies can afford to generate a high durable return on investment and reinvest everything in their business at a high rate of return. Warren Buffett has discussed this in his discussion of his ideal business

This was a rather long introduction. I wanted to provide some nuance about Dividend Growth Investing. In my opinion, it is a worthwhile strategy as there are a lot of quality businesses that are dividend growth companies. Studying the lists of dividend achievers, dividend champions, dividend aristocrats and dividend kings can help identify and select good quality investments to hold for the long run.

That being said, not every company that is a dividend growth stock is a good investment. 

There are various studies about Dividend Growth Investing, the most popular being the Ned David Research one. It shows that companies that grew or initiated a dividend have experienced the highest returns relative to other stocks since 1973.

This chart shows you that dividend growers & initiators had a better performance than dividend cutters & eliminators and dividend non-payers. They also seem to be showing that the equal weighted S&P500 index did worse than dividend growers and initiators. In addition, dividend growers had a low standard deviation.

This outperformance looks very convincing, when you look at it in a chart format.

So case closed, right? You are sold on Dividend Growth Investing.

The problem for me is that I want to trust this data, but I have to verify it.

I simply took a look at historical S&P 500 total returns data since 1973. Source: Adamodar

According to this data source, a $100 investment in S&P 500 index at the end of 1972, with dividends reinvested, would have turned to $20,639.81. 

This is a logaritm chart of those total returns off a $100 investment at the end of 1972:

This shows me that S&P 500 itself did better than the dividend growers and initiators. And the S&P 500 itself did much better than the S&P 500 in the Ned Davis Research Study.

Which to me raises more questions, rather than solves anything. 

Why is it that the performance of S&P 500 in Ned Davis Research so poor relative to the actual S&P 500. Perhaps it has something to do with the way they weight their portfolios. Perhaps it could be due to their data integrity. Again, these performance gaps raise questions about the Ned Davis Research Study and data. I do not believe we have an apples to apples comparison.

Also that being said, their equal weighted data on S&P 500 does not feel right. That's because from all the research papers I have ever read, equal weighted indices typically have tended to OUTPERFORM market weight indices. This is a second reason why I am questioning the data in Ned Davis Research Study on returns based on a dividend policy.

Perhaps, if they did a comparison based on a market cap weighted basis, it would be a better apples to apples comparison. That can clearly show investors how Dividend Growth companies have done per their dividend policy. 

But in reality, it would be really helpful to understand what methodology Ned Davis Research used on their studies of performance on companies per dividend policy. 

Perhaps this study is used as a marketing tool from mutual funds to sell you dividend growth funds. As investors however, we know that nobody else cares more about your money than you do. Hence why you need to trust, but verify. And while that Ned Davis Research Study does look convincing at first glance, it does not seem right, as it raises more questions than it answers.

The issues are that it uses a methodology that is not well explained.

The study's results do not link to the performance of S&P 500 index itself. Why are dividend growth stocks showing as outperforming, when in reality that index seems to have done worse than the actual returns of the S&P 500 index?

The study uses an odd performance for S&P 500 equal weighted index, which has done much worse than the actual performance of S&P 500. It looks as if they forgot to add dividends on the performance of their equal weight index. Which seems odd to me.

The conclusion for me is to learn to read reports and studies critically. They are mostly marketing materials, rather than anything else.

It's also important to keep learning, and gathering different data points in your toolbelt, so you can try to connect the dots and identify gaps.