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

Several of the large banking institutions in the US passed the Stress Tests imposed by the Federal Reserve. As a result, they announced their intentions to raise dividends and boost buyback allocations.

I went through the list of increases from last week, and focused on the institutions that have a ten year track record of annual dividend increases:

I also added ten year charts showcasing the trends in share price, quarterly earnings and quarterly dividends.

In order to understand equity returns, you need to decompose them to their sources. 

Equity returns are a function of:

1. Dividend Yields

2. Earnings Per Share Growth

3. Change in valuation

In the long-run, the first two items (dividends and earnings per share) are the so called fundamental sources of returns. They drive the total return over periods longer than say a decade. The changes of valuation matter the least in the very long-run.

In the short-run however, for periods of five to ten years or less, valuation does matter a lot. This is why your returns would be much different if you bought a company at a starting yield of 4% versus a starting yield of 2%. That being said, rising earnings and dividends matter a lot too, because they provide the needed fuel behind great returns in the long-run. However, if you manage to acquire a good company at a discount, your potential returns will be higher.

Visualizing the interplay between dividend yields, earnings per share growth and the changes in valuation showcases where returns have come from perfectly well. It also provides the perspective to determine where we are today, and also to potentially provide some markers as to where a potential future buy point could be set at.

Bank of America (BAC) hiked its quarterly dividend by 8% to $0.28/share. This will be the 12th year of consecutive annual dividend increases for this dividend achiever. The company has managed to grow dividends at an annualized rate of 8.70% over the past five years. 

The company has managed to grow earnings from $1.38/share in 2015 to $3.25/share in 2024.

The company is expected to earn $3.63/share in 2025.

The stock sells for 13.46 times forward earnings and a dividend yield of 2.13%.

Bank of New York Mellon (BK) increased its quarterly dividend by 12% to $0.53/share. This will be the 15th consecutive increase in the annual dividend for this dividend achiever. The company has managed to grow dividends at an annualized rate of 8.60% over the past five years. 

The company has managed to grow earnings from $2.72/share in 2015 to $5.84/share in 2024.

The company is expected to earn $6.80/share in 2025.

The stock sells for 13.60 times forward earnings and a dividend yield of 2.03%.

Bank OZK (OZK) increased its quarterly dividend to $0.44/share. While this is a 2.30% raise over the dividend paid in the previous quarterly, it is also a 10% increase over the dividend paid during the same time last year. Bank OZK tends to raise dividends every quarter. This dividend aristocrat has regularly increased dividends since 1997.  It has managed to grow dividends at an annualized rate of 10.90% over the past five years.

The company has managed to grow earnings from $2.10/share in 2015 to $6.16/share in 2024.

The company is expected to earn $6.10/share in 2025.

The stock sells for 8.36 times forward earnings and a dividend yield of 3.45%.

Goldman Sachs (GS) increased its quarterly dividend by 33% to $4/share. This is the 14th year of consecutive annual dividend increases for this dividend achiever. It has managed to grow dividends at an annualized rate of 22.60% over the past five years. 

The company has managed to grow earnings from $12.35/share in 2015 to $41.07/share in 2024.

The company is expected to earn $44.70/share in 2025.

The stock sells for 16.20 times forward earnings and a dividend yield of 1.67%.

JPMorgan Chase (JPM) increased its quarterly dividend by 7% to $1.50/share. This is the 15th year of consecutive annual dividend increases over this dividend achiever. The company has managed to grow dividends at an annualized rate of 6.90% over the past five years.

The company has managed to grow earnings from $6.05/share in 2015 to $19.79/share in 2024.

The company is expected to earn $18.48/share in 2025.

The stock sells for 16 times forward earnings and a dividend yield of 1.89%.

Morgan Stanley (MS) boosted its quarterly dividend by 8% to $1/share. This is the 12th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 22.30% over the past five years.

The company has managed to grow earnings from $2.97/share in 2015 to $8.05/share in 2024.

The company is expected to earn $8.68/share in 2025.

The stock sells for 16.60 times forward earnings and a dividend yield of 2.57%.

PNC Financial (PNC) raised its quarterly dividends by 6.30% to $1.70/share. This is the 15th year of consecutive annual dividend increases over this dividend achiever. The company has managed to grow dividends at an annualized rate of 8.40% over the past five years.

The company has managed to grow earnings from $7.52/share in 2015 to $13.77/share in 2024.

The company is expected to earn $15.13/share in 2025.

The stock sells for 13 times forward earnings and a dividend yield of 3.26%.

State Strett (STT) raised its quarterly dividend by 11% to $0.84/share. This is the 15th year of consecutive annual dividend increases over this dividend achiever. The company has managed to grow dividends at an annualized rate of 8% over the past five years.

The company has managed to grow earnings from $4.53/share in 2015 to $8.34/share in 2024.

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

The stock sells for 11.50 times forward earnings and a dividend yield of 2.76%.

U.S. Bancorp (USB) raised its quarterly dividend by 4% to $0.52/share. This is the 15th year of consecutive annual dividend increases over this dividend achiever. The company has managed to grow dividends at an annualized rate of 5.20% over the past five years.

The company has managed to grow earnings from $3.18/share in 2015 to $3.79/share in 2024.

The company is expected to earn $4.04/share in 2025.

The stock sells for 11.76 times forward earnings and a dividend yield of 4.17%.

Relevant Articles:

- Three Dividend Growth Companies Raising Dividends Last Week

- Seven Dividend Growth Companies Raising Dividends Last Week

- Two Dividend Achievers Increasing Dividends Last Week

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Three Dividend Growth Companies Raising Dividends Last Week

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

It's one of my processes to monitor existing holdings and potentially uncover companies for further research. 

This exercise helps me stay sharp and keep the pulse of the Dividend Growth Investing Universe. 

This exercise also showcases the inputs I use to quickly decide if I want to study a company further or not. In general, I look for companies that can grow dividends at a decent clip, fueled by growth in earnings per share. I want to acquire such a company at a good entry price. I also want a company that can keep growing those dividends in the future, as the durable business model produces higher earnings. 

You can see I have humble needs from life.

For this review, I focused on the companies that raised dividends last week, which also have a ten year minimum streak of consecutive annual dividend increases under their belts. The companies include:

The Kroger Co. (KR) operates as a food and drug retailer in the United States.

Kroger raised quarterly dividends by 9.40% to $0.35/share. This marks the 19th consecutive year of dividend increases for this dividend achiever. During the past decade, the company managed to grow dividends at an annualized rate of 13.52%.

Between 2015 and 2024, the company managed to grow earnings from $2.09/share to $3.7/share.

The company is expected to earn $4.77/share in 2025.

The stock sells for 14.94 times forward earnings and yields 1.80%.

Matson, Inc. (MATX) engages in the provision of ocean transportation and logistics services. It operates through two segments, Ocean Transportation and Logistics. 

The company raised quarterly dividends by 5.90% to $0.36/share. This is the 13th consecutive annual dividend increase for this dividend achiever. During the past decade, the company managed to grow dividends at an annualized rate of 7.18%.

Between 2015 and 2024, Matson managed to grow earnings from $2.37/share to $14.14/share. There were some record earnings per share in 2021 and 2022 of $21.67/share and $27.28/share respectively however. That Covid boom really messed the business cycle for a lot of companies, by pulling a lot of demand into a few short years, followed by a lower demand thereafter.

The company is expected to earn $10.49/share in 2025.

The stock sells for 10.35 times forward earnings and yields 1.25%.

Worthington Enterprises, Inc. (WOR) operates as an industrial manufacturing company. It operates through two segments, Consumer Products and Building Products. 

The company raised quarterly dividends by 11.80% to $0.19/share. This is the 15th year of consecutive annual dividend increases for this dividend achiever. During the past decade, the company managed to grow dividends at an annualized rate of 4.36%.

Between 2016 and 2025, the company's earnings per share went from $2.30 to $1.94.

The company is expected to earn $3.53/share in 2025.

The stock sells for 17.90 times forward earnings and yields 1.08%.

Relevant Articles:

- Four Dividend Growth Companies Increasing Dividends Last Week

- Two Dividend Achievers Increasing Dividends Last Week

- Seven Dividend Growth Companies Raising Dividends Last Week

- Three Dividend Growth Companies Raising Dividends Last Week

Warren Buffett's Net Worth and Charity

Warren Buffett is the best investor in the world. I've dedicated a ton of time studying him and writing about him on this humble site.

He recently made the news again, after writing that he's contributed roughly $6 Billion in Berkshire Hathaway stock to several charitities.Those include The Bill & Melinda Gates Foundation, Susan Thompson Buffett Foundation and the Sherwood, Howard G Buffett and NoVo Foundations. He has continued his philantropic donations for 19 years now.

The fascinating part is Warren Buffett owned 474,998 A shares of Berkshire Hathaway in 2006, before he started donating to charity.

If he hadn't donated anything, he would have been worth $347 billion and be the second richest person on earth

Today he owns 198,117 A shares, worth only $145 billion.

This is from the press release:

“The mathematics of the lifetime commitments to the five foundations are interesting. The schedule for annual grants was made on June 26, 2006, and has since been supplemented by significant grants to four of the five recipients. When originally made, I owned 474,998 Berkshire A shares worth about $43 billion and those shares represented more than 98% of my net worth. I have converted A shares into B shares before making contributions. During the following 19 years, I have neither bought nor sold any A or B shares nor do I intend to do so. The five foundations have received Berkshire B shares that had a value when received of about $60 billion, substantially more than my entire net worth in 2006. I have no debts and my remaining A shares are worth about $145 billion, well over 99% of my net worth. Nothing extraordinary has occurred at Berkshire; a very long runway, simple and generally sound decisions, the American tailwind and compounding effects produced my current wealth. My will provides that about 99½% of my estate is destined for philanthropic usage. The lifetime commitments expire upon my death or at an earlier time if certain conditions set forth in the 2006 letter occur. All of these conditions continue to be met. My November 21, 2023 release set forth procedures of my will that are unlikely to be changed before my death. My then-current will becomes public upon my death.”

No one cares more about your money than you do

 The best decision I ever made was to invest in my own financial education. Everything I have done is easily achieved by anyone else with a DIY mentality.

This means reading as much as possible, trying to learn from various sources, and connect the dots into a full blown financial plan.

This plan takes care of:

1. Income/Expense monitoring and improvement

2. Savings/Investments

3. Keeping costs low

4. Tax/Estate Planning

5. Continuous Improvement

After many years of managing my own finances, it's all second nature by now. Once things are set-up, it's mostly smooth sailing from there. 

Mistakes can and will happen, but that's how one learns. If you start your journey right away when you have some modest initial amounts of capital at stake, those mistakes are going to be small. I believe it is better to miss out on tens of dollars of missed tax savings and optimization in the early days (mistake I made) versus potentially falling for an expensive mutual fund, private REIT or an annuity in the latter days (mistake many of my peers have made)

The best part of it is that knowledge accumulates, like compound interest. That knowledge is scalable as well.

If you know how to manage $1,000, you know how to manage $10k, $100k, $1 Million etc... Once you set up those basic processes, you can expand from there and grow

It's also very helpful to be involved in all aspects of the process myself, because I can see how one decision somewhere can make a huge impact today and down the road.

E.g. Contributing to a pre-tax 401 (k) today saves on taxes today, allows for tax-deferred compounding, and I could come out ahead if the tax rate at withdrawal/Roth Conversion is lower than the tax rate I save today. 

In another example, seeing how for each say $1,000 I invest, I generate $20 - $40 in annual dividend income that keeps growing over time through dividend increases and dividend reinvestment. Most of it is taxfree due to smart planning.

I never used a financial advisor, but rather relied on myself and my education. There are plenty of resources online. The important thing is to have the desire to improve your situation. 

Using a professional can be helpful, but you also need to have the knowledge to evaluate this professional, and making sure they are qualified, and competent.

If you do not know what you are looking for, someone may take advantage of you. It could be costly down the road.

Why did I never use a financial advisor?

Well, when I was just starting out, nobody cared for someone with a few thousand dollars. I was also skeptical of anyone that was trying to sell me solutions that could bring them commissions, but not really incentivize my financial well being. 

I saved on a ton of fees over the past 20 years as well. And would likely save even more over the next several decades as well. Those fees compound too...

I do not believe I need a financial advisor today either, as I can manage estate on my own. I have found it very difficult to find a good adviser as well. 

Identifying a good adviser is as hard as identifying the next Google. Plus, you need to evaluate not only how good they are, but you also need to evaluate how long would they be in business for. You do not want to be nickel and dimed in fees either and sold high commission products. (e.g annuities, high fee mutual funds)

I believe most individuals do not need a financial advisor, but can easily manage their net worth on their own. Thus saving in fees.

Most finances are not that complicated. 

They only need to have the desire to learn, and the desire to keep learning and improving over time. 

I personally love learning, and seeing how others do it. I try to get best practices out of it. 

I am an extreme case, but I do not believe financial education is really that complicated. Once you get the basics right, it can all beset-up to be done on autopilot. Getting it right can also be done after reading a book or two or a few on personal finance and investments. 

You just have to have the desire to get your financial house in order. Otherwise, you have to pay someone to do it for you.

An investment in knowledge pays the highest dividends.

Three Dividend Growth Companies Raising Dividends Last Week

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

I typically focus my attention to companies that have managed to grow dividends for at least ten years in a row. 

Over the past week, there were three companies that managed to raise dividends to shareholders. Each of these companies have managed to raise annual dividends for at least ten years in a row. 

The companies include:

First Farmers Financial Corporation (FFMR) operates as the financial holding company for First Farmers Bank & Trust that provides banking products and services to individuals, families, and businesses.

The company raised quarterly dividends by 2% to $0.50/share. The company managed to grow dividends at an annualized rate of 13.33% over the past decade. This is the 36th consecutive annual dividend increase for this dividend champion.

The company managed to grow earnings from $2.35/share in 2015 to $5.04/share in 2024.

The stock sells for 13.30 times earnings and yields 3%.

Investar Holding Corporation (ISTR) operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States.

The company raised quarterly dividends by 4.80% to $0.11/share. This is the 12th consecutive annual dividend increase for this dividend achiever. The company managed to grow dividends at an annualized rate of 12.04% over the past 5 years. 

The company managed to grow earnings from $0.98/share in 2015 to $2.06/share in 2024.

The stock sells for 9.13 times forward earnings and yields 2.27%.

PSB Holdings, Inc. (PSBQ) operates as a bank holding company for Peoples State Bank that provides a range of retail consumer and commercial banking products and services to individuals and businesses in the United States.

The company raised semi-annual dividends by 6.30% to $0.34/share. This is the 32nd consecutive ywar of increased dividends per share for this dividend champion. The company managed to grow dividends at an annualized rate of 9.15% over the past decade.

The company managed to grow earnings from $1.61/share in 2015 to $2.37/share in 2024.

The stock sells for 9.26 times earnings and yields 2.68%.

Relevant Articles:

- Four Dividend Growth Companies Increasing Dividends Last Week

- Seven Dividend Growth Companies Raising Dividends Last Week

- Two Dividend Achievers Increasing Dividends Last Week