The Walt Disney Company (DIS) Dividend Stock Analysis

The Walt Disney Company (NYSE:DIS) operates as an entertainment company worldwide. The company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. The company is not a typical dividend growth stock, although it has paid dividends since 1957, and has never cut them. Disney is a dividend angel which often raises dividends several years in a row, after which it keeps them unchanged. This is followed by another round of dividend raises again.

The most recent dividend increase was in December 2015, when the Board of Directors approved a 7.60% increase in the semi-annual dividend to 71 cents/share. The largest competitors for Disney include Time Warner (NYSE:TWX), Viacom (NYSE:VIA) and Twenty-First Century Fox (NASDAQ:FOXA).

Over the past decade the stock has delivered an annualized total return of 13.20% to its shareholders. Future returns will be dependent on growth in earnings and dividend yields obtained by shareholders.

Six Dividend Stocks Sending More Cash to Shareholders

Each week I review the list of dividend increases. This is helpful in monitoring existing dividend holdings, and monitoring the breadth of dividend increases across the universe of prominent dividend growth stocks. Dividend increases also provide a proxy for near term expectations for the performance of the underlying businesses. If management continues raising dividends at the same rate as before, without achieving that through increases in the payout ratio, this indicates that they are expecting continued success in the business. If management raises dividends slower than expected, this might be an indication that things are slowing down.

Regular readers know that dividend increases are just one of the things I look for in evaluating companies. I am looking for a company with a strong track record of annual dividend growth, which is supported by growth in earnings per share. If such a company is available at an attractive valuation, it should be analyzed in detail, before being considered for my dividend growth portfolio.

Over the past week, there were six companies that met my minimum requirement for annual dividend increases. The companies include:

Six Dividend Stocks Rewarding Shareholders with a Raise

Each week, I go through the list of dividend increases in order to monitor performance of existing holdings, and uncover hidden dividend gems. I then narrow down the list by eliminating companies with a dividend growth streak that is less than a decade. I also look at things like trends in earnings per share, dividends per share, dividend payout ratios, in order to determine the likelihood of future dividend growth and growth in intrinsic value. My basic analysis also focuses on valuation and dividend sustainability.

Over the past week, there were six dividend stocks with a long streak of consecutive annual dividend increases, which raised dividends to shareholders. The companies include:

Brown-Forman Corporation (BF.B) manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages worldwide. It provides spirits, wines, ready-to-drink cocktails, whiskey, vodka, tequilas, champagnes, brandy, and liqueur. Last week, the company raised its quarterly dividend by 7.40% to 18.25 cents/share. This marked the 33th consecutive annual dividend increase for this dividend champion. Over the past decade, Brown-Forman has managed to raise its dividends at a rate of 9.40%/year. Currently, the stock is overvalued at 26.10 times forward earnings and yields 1.60%. Brown-Forman would look more appealing on dips below $36/share. Check my analysis of Brown-Forman for more information about the company.

3 Low Volatility Dividend Stocks To Make Staying The Course Easier

This is a guest post written by Ben Reynolds at Sure Dividend.  Sure Dividend helps individual investors build high quality dividend growth portfolios from Dividend Aristocrats and other dividend stocks with long histories.

The article Dividend Growth Investors: Stay The Course thoughtfully examines the difficulties of investing in dividend growth stocks when stock prices are falling.  

The article discusses how important it is to stay the course and continue building your dividend growth portfolio – even when prices are falling.  See below for an excerpt:

“There is a reason why stocks have done much better than bonds in the long-run – they are riskier. With stocks, there is always the chance that there will be violent fluctuations in the price. You can have steep downturns, which can have many weak hands scrambling for the exits. When stock prices go down, many investors assume that something is wrong, they panic and sell. They forget that your upside potential in terms of dividends and capital gains is virtually unlimited.”

The volatility of dividend stocks is what makes staying the course more difficult.  The larger the price fluctuations, the harder it is to hold onto a stock.

Starbucks (SBUX) Dividend Stock Analysis

Starbucks Corporation (NASDAQ:SBUX) operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company initiated its dividend in 2010 and has been growing distributions rapidly since then. While the company has only managed to increase dividends for four years in a row, I believe that it has the potential to reach dividend achiever status, and has the growth story to become as successful for its dividend growth investors.

The most recent dividend increase was in November 2016, when the Board of Directors approved a 25% increase in the quarterly dividend to 25 cents/share. The company's competitors include McDonald's (NYSE:MCD), Nestle (OTCPK:NSRGY) and Dunkin Brands (NASDAQ:DNKN).

Since the company initiated a dividend payment in 2010, the stock has returned 315%. Future investment returns will be dependent on growth in earnings and dividend yields obtained by shareholders, as well as the initial valuation locked in at the time of investment.