In compiling the Dividend Champions list, I get to see which companies are nearing the anniversaries of their previous dividend increases. Since most of these firms raise their payout about the same time every year, I can say with some confidence that they are likely to do so again.
Based on last year's announcements, I'm expecting the following companies to announce dividend increases between now and the anniversary of their previous increase:
Dividend Champions (25 or more years)
| | | No. | 1/31 | | Qtrly | % | LY |
| Company | Symbol | Yrs | Price | Yield | Rate | Inc. | Ex-Div |
| Air Products & Chem. | 28 | 87.25 | 2.25 | 0.4900 | 8.89 | 3/30/10 | |
| CenturyLink Inc. | 37 | 43.24 | 6.71 | 0.7250 | 3.57 | 3/5/10 | |
| Chubb Corp. | 45 | 57.93 | 2.55 | 0.3700 | 5.71 | 3/17/10 | |
| Coca-Cola Company | 48 | 62.85 | 2.80 | 0.4400 | 7.32 | 3/11/10 | |
| Genuine Parts Co. | 54 | 51.75 | 3.17 | 0.4100 | 2.50 | 3/3/10 | |
| Old Republic Int'l | 29 | 12.23 | 5.64 | 0.1725 | 1.47 | 3/3/10 | |
| Piedmont Natural Gas | 32 | 28.06 | 3.99 | 0.2800 | 3.70 | 3/23/10 | |
| Telephone & Data Sys | 36 | 35.75 | 1.26 | 0.1125 | 4.65 | 3/15/10 | |
| Tootsie Roll Industries | 45 | 27.66 | 1.16 | 0.0800 | 3.00 | 3/5/10 | |
| Wal-Mart Stores Inc. | 36 | 56.07 | 2.16 | 0.3025 | 11.01 | 3/10/10 |
Dividend Contenders (10-24 years):
| | | No. | 1/31 | | Qtrly | % | LY |
| Company | Symbol | Yrs | Price | Yield | Rate | Inc. | Ex-Div |
| Albemarle Corp. | 16 | 56.16 | 1.00 | 0.1400 | 12.00 | 3/11/10 | |
| | 16 | 116.00 | 3.56 | 1.0325 | 0.24 | 3/29/10 | |
| Raven Industries | 24 | 47.24 | 1.35 | 0.1600 | 14.29 | 3/29/10 | |
| RenaissanceRe Holdings | 15 | 65.62 | 1.52 | 0.2500 | 4.17 | 3/11/10 | |
| T. Rowe Price Group | 23 | 65.92 | 1.64 | 0.2700 | 8.00 | 3/12/10 |
Dividend Challengers (5-9 years):
| | | No. | 1/31 | | Qtrly | % | LY |
| Company | Symbol | Yrs | Price | Yield | Rate | Inc. | Ex-Div |
| American Greetings | 7 | 21.73 | 2.58 | 0.1400 | 16.67 | 3/19/10 | |
| Astro-Med Inc. | 7 | 7.85 | 3.57 | 0.0700 | 16.67 | 3/17/10 | |
| Birner Dental Mgmt Svcs | 7 | 19.42 | 4.12 | 0.2000 | 17.65 | 3/24/10 | |
| Cheviot Financial Corp. | 7 | 8.94 | 4.92 | 0.1100 | 10.00 | 3/11/10 | |
| Hanover Insurance Group | 6 | 47.30 | 2.11 | 0.2500 | 33.33 | 3/4/10 | |
| ITT Corp. | 8 | 58.92 | 1.70 | 0.2500 | 17.65 | 3/1/10 | |
| National Presto Industries | 7 | 128.02 | 6.30 | 8.1500 | 46.85 | 3/2/10 | |
| Novo Nordisk A/S | 9 | 113.13 | 1.24 | 1.4070 | 36.07 | 3/25/10 | |
| PG&E Corp. | 6 | 46.28 | 3.93 | 0.4550 | 8.33 | 3/29/10 | |
| PPL Corp. | 9 | 25.79 | 5.43 | 0.3500 | 1.45 | 3/8/10 | |
| Public Service | 7 | 32.43 | 4.22 | 0.3425 | 3.01 | 3/8/10 | |
| Silgan Holdings Inc. | 7 | 37.33 | 1.13 | 0.1050 | 10.53 | 3/5/10 | |
| Village Super Market Inc. | 8 | 31.41 | 3.18 | 0.2500 | 4.17 | 3/30/10 | |
| Westar Energy | 6 | 25.50 | 4.86 | 0.3100 | 3.33 | 3/5/10 |
Notably, the expected increases include the next company poised to graduate from Contender to Champions status (Raven Industries (RAVN)), and the next companies likely to graduate from Challenger to Contender status (PPL and Novo Nordisk (NVO)). Also note that National Presto Industries (NPK) has been added since the January 31 update. In addition, one company (FLS) that appears in the appendix is expected to record its fifth year of increases on or about March 22.
Although I'm basing this listing on March ex-dividend dates, there may be other companies that announce increases to be paid in April or later. (Companies announce dividend declarations anywhere from two to six weeks before the ex-dividend date.) Not all of these companies will meet the strict standards of every investor, but they may be appropriate for portfolio diversification. Potential investors should do more research before committing funds.
Disclosure: I am long CTL, KO, GPC
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25 Comments
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alphaman991Comments (32)
Wow thats a lot of companies. Thanks for the article and your hard work on the Dividend Champions list, Mr. Fish!
Feb 15 03:51 PMReply! Report abuse+90
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David FishComments (1637)
Thanks! The good news is that, with over 400 Dividend Champions, Contende4rs, and Challengers, there should be an average of 30-40 companies per month increasing their dividends...and some of them do it more than once per year.
Last month, it was 39 companies...
seekingalpha.com/artic...
Feb 15 11:35 PMReply! Report abuse+50
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nasdaqpickerComment (1)
Hi David, I have watched and owned RAVN for over 20 years. They just closed out their most spectacular year in history, IMHO, January 31 and will be reporting shortly. Their 3 main divisions of Applied Tech (precision ag); Engr Films (for the specialized oil and construction pit industry) and Aerostar (communication and surveillance balloons for military) plus the contract electronics division are knocking the sock off the ball as evidenced by 1st 9 mos earning of $33 million or $1.83 p/s vs $28 million and $1.58 p/s for ALL 12 mos of FY 2010!
You can bet the dividend WILL be increased again this year as well as the good possibility of another large special dividend.
If you would like to chat more about RAVN, please respond.
Feb 15 05:30 PMReply! Report abuse+50
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David FishComments (1637)
Raven is one of those stocks that I've been aware of for years, but never bought, maybe because of the low yield (and the fact that I already own lots of stocks). I'm sure that the company will increase its dividend and although special payouts are always nice, I'd like to see a healthy increase in the regular dividend rate.
Feb 15 05:49 PMReply! Report abuse+30
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Stocks1Comments (41)
David, thanks for another great article.
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Feb 15 10:30 PMReply! Report abuse+40
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George FisherComments (218)
David,
So many to choose from, so little cash. Nice list to start dd, as always.
Feb 16 12:31 AMReply! Report abuse+5-1
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tweednComments (1126)
Thanks David for the heads up on dividend increases. I appreciate your addition of NPK. My first pass at RAVN shows a small cap growth stock which may or may not be over priced with a p/e of 24.41 and 1.3% yield. However, there is a dividend growth rate although not consistant of 18.5% 10yr. The earnings per share growth rate is not consistant either, but the special dividends are a sweetner.
Feb 16 04:50 AMReply! Report abuse+40
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David FishComments (1637)
I should mention for anyone not familiar with NPK that its dividend payments are made on an annual basis and consist of a regular dividend and a "special" dividend that has become an annual event, giving the company a rising total payout over the past 7 years.
I had posed the question to readers in my latest monthly update of whether or not a company with a rising regular+special dividend should be included or not.
seekingalpha.com/artic... (Normally, special or "extra" dividends are excluded so as not to "penalize" a company by showing an overall decrease in payments the following year.)
Feb 16 06:11 AMReply! Report abuse+7-1
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saravabobComment (1)
Did you make your call on CTL before the Feb 15 earnings and guidance? Guiding a decrease in income and an increase in expenditures should pressure dividends. I would be happy with no change but with an EPS drop of 15% and a payout ratio of almost 90% it is hard to see them maintaining let alone raising. Is your projection based solely on history?
Feb 16 09:02 AMReply! Report abuse00
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David FishComments (1637)
It's based on a history of dividend increases, as well as the board of directors stated intention of paying out virtually all of free cash flow to shareholders...which they adopted in 2008, when they boosted the quarterly dividend from 6.75¢ to 70¢ per share.
Having said that, the annual increase could be delayed, as it was last time, when the company went six quarters at 70¢ before raising it to 72.5¢ a year ago. (They can still maintain a dividend streak by increasing theg apyout at any time in 2011.)
Feb 16 11:59 AMReply! Report abuse+4-1
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Albert_AComments (8)
TY David for this fine article. Your work on these lists has help me get started on a passive income portfolio. I've already bought PBI and CINF with its help.
Feb 16 09:29 AMReply! Report abuse+4-1
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notbobComments (938)
Good work, Albert_A! I wish you continued success!
Feb 16 09:30 AMReply! Report abuse+5-1
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guraafComments (206)
As George Fisher said - so many companies, so little cash. It is easy to have a feeling of "missing the boat" and loading up on too many companies (over-diversification, if that is even possible). I am guilty of this - own 40+ stocks!
Thanks David.
Feb 16 12:51 PMReply! Report abuse+3-1
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chowderComments (179)
@guraaf ... I own 60 equities! I don't apologize for it either. I invest in companies that are rated 1 or 2 for safety by Value Line. If one of these companies were to go to zero (highly unlikely), then the most I would lose is 1.6% of my portfolio value.
This is why I don't have to sweat share price movements like most people here on SA.
The other team can't win if they can't score! Mr. Market can take all the shots he wants, I try to invest in the best of. If they don't rebound, neither will the others.
Protect the downside and the upside takes care of itself.
Warren Buffett knows what he's doing and he owns more than 30 positions. I'm not as good as him and never will be. I need a better defensive line. I do this through owning as many positions as I do. My downside is limited per position and I like it like that.
I'm perfectly happy with that slow and steady growth my portfolio provides.
Feb 16 01:12 PMReply! Report abuse+60
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notbobComments (938)
I agree. It's way to easy to fall prey to the "I never met a dividend stock I didn't like" disease. :-)
That happened to me, until I sold off almost all of them, in order to concentrate on <>
Feb 16 01:32 PMReply! Report abuse+30
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mansura321Comment (1)
Wow, only <>
I have made the decision to switch my portfolio to a dividend growth portfolio earlier this year after reading many articles on Seeking Alpha.
It takes much work to research a stock and I am still learning, but at the risk of asking too much, are there any 1-2 stocks in your portfolio that you would recommend as building blocks to a beginner such as myself?
Feb 16 02:28 PMReply! Report abuse+20
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notbobComments (938)
I don't know about "high conviction", but at one point I owned over 100 dividend stocks, and that was way too many.
I reduced a lot when I read David Van Knapp's e-books, because many of what I owned did not meet the 3% yield at time of purchase rule.
Here's what I am down to now:
Abbott Labs
AFLAC
Coca Cola
Johnson & Johnson
McDonalds
Medtronic
Sysco
Walmart
and my next purchase will be Pepsico.
As always, do your own due diligence before investing.
I see this was your first comment. Welcome to SA! There's a lot of good people to listen to here, including (but not limited to) (and in no particular order) David Fish, David Van Knapp, Dividend Growth Investor, Low Sweat Investing, Dividends4Life, and many others. You might want to go back and read their past comments - many times the comments are more informative than the article itself. :-)
Feb 16 02:34 PMReply! Report abuse+40
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David Van KnappComments (1821)
The issue of portfolio concentration keeps coming up. As notbob notes, I lean toward concentrated portfolios (10-15, maybe 20 stocks), but the arguments for more holdings are strong too. I'm sure there must be some mathematically optimized answer, but in the end I think it comes down as much to individual style and what a person is comfortable with as it does to math.
It should be noted that as of last September (the last time I checked),
Feb 16 04:00 PMReply! Report abuse+50
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poortorichComments (421)
David F
Thanks for the list.
CHD doubled its dividend the other day. Where does it fit in your dividend group?
Feb 16 05:15 PMReply! Report abuse+10
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notbobComments (938)
My web site (www.tessellation.com/d...) shows that CHD has been raising its dividends well over the past 13 years, but it still has a yield of only 1%, so it does not meet my minimum purchase requirement of a yield of 3%.
Feb 16 05:21 PMReply! Report abuse+20
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poortorichComments (422)
Notbob
Thanks for the info. The yield is now 2% because they actually doubled it about a week ago.
Feb 16 05:23 PMReply! Report abuse+30
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notbobComments (942)
Thanks for that information. I didn't know that. My web site stopped at 12/31/10. :-(
I hope they raise their yield to 3%. I'd like to buy them. I use up enough cat litter laced with baking soda, to single-handedly push their profits higher. :-)
Feb 16 05:25 PMReply! Report abuse+40
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poortorichComments (422)
Notbob
Thats funny!
Check out their Trojan Vibrator commercial. Its even more hilarious!
Feb 16 05:39 PMReply! Report abuse+2-1
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notbobComments (942)
I'd like to - where is it on the internet?
Feb 16 07:23 PMReply! Report abuse0-1
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David FishComments (1640)
CHD did, indeed, double its dividend, which was the 15th year in a row of increases. Since it did so, it won't come up again until next February in terms of these "expected" articles, although it could be one of the increasing number of companies that raise their payout more than once this year
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