As part of my monitoring process, I review the list of dividend increases every week. This process is helpful in observing how my investments are performing. This process is also helpful in monitoring companies on my watchlist for a potential addition to the portfolio.
I start by focusing my attention on companies that have managed to boost distributions for at least a decade. The next step includes reviewing each company, in order to compare the latest dividend increase against the ten year performance in terms of annual dividend growth. It is helpful to see if a company is accelerating or decelerating its rate of annual dividend growth from year to year.
The next step involves reviewing trends in earnings per share. In an ideal world, we would want earnings and dividends to be rising in tandem. While there will be some differences from a period to period due to one-time items, we want those two indicators to be growing in sync. Otherwise, a growth in dividends that is not supported by growth in earnings per share would show the investor that the dividend streak may be in jeopardy. Reviewing the payout ratio is helpful, in order to determine dividend safety. I review the payout ratio as an absolute number, and also by reviewing ten year trends in this ratio.
The last step to consider involves looking at valuation. I believe that even the best company in the world is not worth overpaying for. You want to have an adequate margin of safety when investing in a solid blue chip dividend payer.
The companies that raised dividends last week include:
Monday, April 30, 2018
Saturday, April 28, 2018
Best Dividend Investing Articles For April
For your reading enjoyment, I have highlighted several articles that the readers found of particular interest this month. I have included the article title, as well as a short description.
How to Generate a 15% Yield on Cost in Ten Years
I highlighted the real story of one investor who put some money to work in a popular REIT a decade ago. After that, they automatically reinvested dividends for a decade, and they left their investment alone. After a decade of dividend growth and patient dividend reinvestment, this investment is generating an yield on cost of 15%.
Four Dividend Growth Stocks Rewarding Shareholders With A Raise
I highlighted several dividend growth stocks which rewarded their shareholders with a raise in April. There are some prominent and widely held companies on that list. It is important to keep monitoring investments for changes in fundamentals.
Are you ready for the next bear market?
After a 9 year bull market, it is hard to imagine share prices declining and staying low for more than a few months. Despite the fact that we are long-term investors we have to be prepared for the eventual bear markets. This is where focusing on company fundamentals such as earnings and dividends can be helpful in staying the course. The beauty of dividend investing is that in retirement you are living off dividends, and do not have to sell shares. This means that investors in the accumulation phase should be praying for lower prices, while retired investors should largely ignore stock prices and focus on the stability of their dividend income stream. This is why we focus so much on analyzing what we own, and making sure that the dividends are safe and that the assets we own are acquired at an attractive value.
Three Cheap Dividend Stocks To Consider
I highlighted three dividend paying companies, which sell at bargain prices today. Fears of Amazon entering the drug distribution market have plagued the share prices for these companies. According to recent reports I have read, Amazon has shelved plans to sells drugs to hospitals. That’s because these companies may have some competitive advantages that would take quite a few obstacles for a new incumbent such as Amazon. Selling drugs online is a different business from selling books online.
Thank you for reading!
Relevant Articles:
- 2018 Dividend Kings List
How to Generate a 15% Yield on Cost in Ten Years
I highlighted the real story of one investor who put some money to work in a popular REIT a decade ago. After that, they automatically reinvested dividends for a decade, and they left their investment alone. After a decade of dividend growth and patient dividend reinvestment, this investment is generating an yield on cost of 15%.
Four Dividend Growth Stocks Rewarding Shareholders With A Raise
I highlighted several dividend growth stocks which rewarded their shareholders with a raise in April. There are some prominent and widely held companies on that list. It is important to keep monitoring investments for changes in fundamentals.
Are you ready for the next bear market?
After a 9 year bull market, it is hard to imagine share prices declining and staying low for more than a few months. Despite the fact that we are long-term investors we have to be prepared for the eventual bear markets. This is where focusing on company fundamentals such as earnings and dividends can be helpful in staying the course. The beauty of dividend investing is that in retirement you are living off dividends, and do not have to sell shares. This means that investors in the accumulation phase should be praying for lower prices, while retired investors should largely ignore stock prices and focus on the stability of their dividend income stream. This is why we focus so much on analyzing what we own, and making sure that the dividends are safe and that the assets we own are acquired at an attractive value.
Three Cheap Dividend Stocks To Consider
I highlighted three dividend paying companies, which sell at bargain prices today. Fears of Amazon entering the drug distribution market have plagued the share prices for these companies. According to recent reports I have read, Amazon has shelved plans to sells drugs to hospitals. That’s because these companies may have some competitive advantages that would take quite a few obstacles for a new incumbent such as Amazon. Selling drugs online is a different business from selling books online.
Thank you for reading!
Relevant Articles:
- 2018 Dividend Kings List
Friday, April 27, 2018
Johnson & Johnson: My Favorite Dividend King For Reliable Dividend Growth And Income
Johnson & Johnson (JNJ), together with its subsidiaries, is engaged in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices & Diagnostics. This dividend king has paid dividends since 1944 and has managed to increase them for 56 years in a row. Dividend increases have been like clockwork every year for decades.
The company's latest dividend increase was announced in April 2018 when the Board of Directors approved a 7.10% increase in the quarterly dividend to 90 cents /share.
Over the past decade this dividend growth stock has delivered an annualized total return of 9.80% to its shareholders.
The company has managed to deliver 4.10% average increase in annual EPS over the past decade, which was slower than the rate of dividend growth. Johnson & Johnson is expected to earn $8.12 per share in 2018 and $8.57 per share in 2019. In comparison, the company earned $5.41/share in 2017 ( adjusted for the provisional amount of $4.94/share associated with the recent enactment of tax legislation)
The company's latest dividend increase was announced in April 2018 when the Board of Directors approved a 7.10% increase in the quarterly dividend to 90 cents /share.
Over the past decade this dividend growth stock has delivered an annualized total return of 9.80% to its shareholders.
The company has managed to deliver 4.10% average increase in annual EPS over the past decade, which was slower than the rate of dividend growth. Johnson & Johnson is expected to earn $8.12 per share in 2018 and $8.57 per share in 2019. In comparison, the company earned $5.41/share in 2017 ( adjusted for the provisional amount of $4.94/share associated with the recent enactment of tax legislation)
Wednesday, April 25, 2018
Kimberly Clark (KMB) Dividend Stock Analysis
Kimberly-Clark Corporation (KMB), manufactures and markets personal care, consumer tissue, and health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional, and Health Care. This dividend champion has paid dividends since 1935 and has increased them for 46 years in a row. The company’s peer group includes Procter & Gamble (PG), Colgate-Palmolive (CL), and Clorox (CLX).
The company’s last dividend increase was in January 2018 when the Board of Directors approved a 3.10% increase in the quarterly annual dividend to $1/share.
Over the past decade this dividend growth stock has delivered an annualized total return of 9.50% to its shareholders.
The company’s last dividend increase was in January 2018 when the Board of Directors approved a 3.10% increase in the quarterly annual dividend to $1/share.
Over the past decade this dividend growth stock has delivered an annualized total return of 9.50% to its shareholders.
Monday, April 23, 2018
Five Dividend Growth Stocks Boosting Shareholder Distributions
I review the list of dividend increases every single week as part of my portfolio monitoring process. It is helpful to see dividend growth in action for companies I own, and also for companies I may consider owning at the right valuation. I usually focus my attention on companies which have rewarded shareholders with a raise for at least ten years in a row. I ignore the rest for a few years ( until they meet the required dividend streak)
In the past week, there were five dividend paying companies that raised dividends to their shareholders that met the criteria stated above. I reviewed every company, outlining their dividend track record in terms of length and rate of change. I also reviewed the changes in fundamentals, in order to determine if the dividend growth is sustainable. Last, but not least, I also review the valuation for attractiveness. All of these points should be viewed all at once, in order to get the best picture of investment reality.
The companies include:
In the past week, there were five dividend paying companies that raised dividends to their shareholders that met the criteria stated above. I reviewed every company, outlining their dividend track record in terms of length and rate of change. I also reviewed the changes in fundamentals, in order to determine if the dividend growth is sustainable. Last, but not least, I also review the valuation for attractiveness. All of these points should be viewed all at once, in order to get the best picture of investment reality.
The companies include:
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