27 Companies that Raised Divideds over the Past 2 Weeks
Karin is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
This year I, like many other investors, have discovered the allure of dividend-paying companies. I have narrowed my focus to a subset of companies that is termed “Dividend Growth,” which analyzes companies not only for their excellent dividend-paying histories, but also for the potential for those dividends to grow substantially in the future.
To this end, I look at a company’s dividend paying – and raising – history, its 5-year average Dividend Growth Rate (DGR), and its estimated 5-year average Earnings Growth Rate (EGR). I also determine the company’s past twelve months’ total return in my calculations.
I have begun introducing my own Dividend Portfolio to the Motley Fool community, with my first company, Abbott Laboratories.
Today I am examining the 27 companies which announced raises to their dividends during the past week.
These companies are, in alphabetical order, Alexandria Real Estate Equities, BankUnited, Becton, Dickinson & Co, C & F Financial, Churchill Downs, Disney, Erie Indemnity, Glacier Bankcorp, Hormel, Host Hotels, International Game Technology, J & J Snack Foods, McCormick, Montpelier Re Holdings, OGE, PepsiCo, R.G. Barry, RGC Resources, Seagate, SL Green, South Jersey Industries, TowneBank, Triangle Capital, Tyson Foods, United Bankshares, and York Water.
Of these 27, I immediately eliminated 14 for yields of less than 3.0%, which is my minimum threshold.
I then sorted for the number of years that each company has been paying and raising dividends. My threshold here is 10 years. This factor knocked eight more off the list: Alexandria Real Estate Equities (1 year), Bank United (1 year), C & F Financial (0 years), Glacier Bankcorp (0 years), Merck (0 years), RGC Resources (9 years) and Triangle Capital (6 years).
This left me with 5 companies, four of which I have not examined previously in my dividend analysis.
I then examined the companies for their 5-year Dividend Growth Rate (DGR). I also look at 5-year projected Earnings Growth Rate (EGR) and their total 12-month return. (One reason I look at total return is because I do not want to choose a company whose yield is high simply because the share price has declined precipitously. Such a scenario does not bode well for future growth.)
Erie Indemnity (NASDAQ: ERIE) is in the insurance business, and has consistently paid and raised dividends for 22 years. Last week it raised its dividend by 7%, from 55.2 cents to 59.5 cents per share. It is currently trading at $68, which makes its yield 3.5%. The board of directors accelerated the payment on this dividend, to pay in December rather than in January as it usually does. This stock goes ex-dividend on Dec. 5. There will also be a special dividend of $2.00 per share. I like Erie’s DGR of 7.4% and its EGR of 7.0%, but its total return over the past twelve months is flat.
South Jersey Industries (NYSE: SJI) is involved in the natural gas industry, and the company has consistently paid and raised dividends for 13 years. The company is currently trading at $50 and raised its dividend by 10% this week, so its current yield is 4.3%. Its 5-year DGR is also an amazing 10.7%. The stock goes ex-dividend on Dec. 6 and pays on Dec. 28.South Jersey’s total twelve-month return, however, is negative.
United Bankshares (NASDAQ: UBSI) is involved in the financial industry, and the company has consistently paid and raised dividends for 38 years. The company is currently trading at $25, and raised its dividend by 2% this week, so its current yield is 5%. The stock goes ex-dividend on Dec. 12 and pays 31 cents per share on Jan. 2. However, I do not like the company’s DGR, which is a low 2.1%, and its total twelve month return is negative.
York Water (NASDAQ: YORW) raised its dividend by 3.5% this week. York has been paying and raising dividends for a staggering 40 years, is trading at $17 per share, and now yields 3.2%. York goes ex-dividend on Dec. 27 and pays on January 15, 2013. York also has a low DGR of 3.2% which does not meet my 7.0% threshold, and its twelve month return is flat.
The last company, PepsiCo (NYSE: PEP), has been on my radar for a while. It has a staggering 40-year history of raising dividends, and it sports a 3.1% yield. The company raised its dividend by 4% this week, to 53.75 cents per share, and yields 3.1%. Pepsi goes ex-dividend on Dec. 5 and pays on January 2, 2013. I like Pepsi’s DGR of 9.1%, which exceeds my 7.0% threshold. The company also has an EGR of 6.2% and a twelve-month total return of 11.8%.
Four of these companies meet my first two criteria, that they yield more than 3.0% and have been paying and raising dividends for more than 10 years. For some investors, these would be sufficient, but for me, I want to see all of my factors addressed successfully.
However, PepsiCo is one of the companies that I have added my list for further consideration for my Dividend Portfolio. I suggest you do the same.
khern0203 has no positions in the stocks mentioned above. The Motley Fool owns shares of PepsiCo. Motley Fool newsletter services recommend PepsiCo and South Jersey Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!