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The Dividend Champions spreadsheet and PDF have been updated through 6/28/13 and are available here. Note that all references to Champions mean companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. "CCC" refers to the universe of Champions, Contenders, and Challengers.

It's a Small World

I expect to see a continuation of the "Summer doldrums," in terms of expected dividend increases, with only a handful of CCC companies scheduled to announce annual boosts in their payouts during July and about two dozen in August, along with the two dozen or so MLPs (Master Limited Partnerships) that increase their distributions each quarter. (That group will likely do so again in late July and/or early August.) What stood out in late June were a couple of surprises from the world of micro-cap stocks. (Micro-caps are defined as having market caps below $100 million.)

First came the latest Challenger, with an 8-year streak of dividend increases: Not only is Armanino Foods of Distinction (OTCPK:AMNF) a micro-cap (with a market value of just $45 million), but it's also considered a "penny stock," with a price of just $1.41 per share! (The term "penny stock" originally meant shares trading below $1 in price, but now generally refers to any stock below $5 per share.) As you may know, the CCC listing doesn't discriminate against thinly traded stocks or require membership in some proprietary index, so it's good to see a commitment to a dividend "culture" even among micro-cap companies; there are currently 24 micro-caps among the 468 CCC companies. In its latest press release, Armanino, which trades in the Pink Sheets, announced an increase of 16.67% in its quarterly dividend, to 1.4¢ per share, and boasted that "This dividend will be the Company's 52nd consecutive regular quarterly dividend. In addition, the Company has had ten special dividends." Douglas R. Nichols, Chairman of the board stated, "Our balance sheet continues to be strong and think we should reward our shareholders accordingly." Thanks to fellow SA Contributor Five Plus Investor, who alerted me to this stock last fall, and SA Member SDS (Seductive Dividend Stocks), who reminded me of it a couple of weeks ago.

The second surprise came while I was looking for news of a dividend increase by PSB Holdings (OTCQB:PSBQ), which I expected would extend its streak of increases to nine years. PSBQ, which trades on the OTC Bulletin Board, is the parent of Peoples State Bank of Wausau, Wisconsin, and has a market value of just over $48 million. The press release I found at the company website announced a 7.7% increase in the semi-annual dividend and stated, "The current dividend continues a 49 year tradition of cash dividends to PSB shareholders including 20 consecutive years of increased cash dividends declared per share." So instead of being a Dividend Challenger, PSBQ enters its second decade as a Dividend Contender and stands just five years away from Champion status. The stock sports a current price/earnings ratio of under 8 times its trailing twelve months' earnings and yields 2.67%.

Oddly enough, the only other company promoted from Challenger to Contender this month - Acme United (NYSEMKT:ACU) - is also a micro-cap, with a market value of about $40 million. The company, which describes itself as "an innovative supplier of cutting devices, measuring instruments, and safety products for school, home, office, hardware and industrial use," hasn't been quite as firmly committed to the "culture" of dividend increases as has Armanino and PSB, having been on and off the list of "overdue" increases a few times in the past 10 years, but managing to pay higher total dividends each year since 2004. Its latest increase of 14%, to 8¢ per share on a quarterly basis, provides a yield of 2.49% on a stock with a P/E of 11.28 times trailing twelve months' earnings per share.

As you can see from the table below, stock prices were generally a tad lower in June, raising dividend yields slightly. As always, please use the CCC only as a starting point for more in-depth research. Feel free to leave any suggestions in the Comment area below.

Quick Summary

The Summary tab includes a table comparing the composite numbers from the latest update to those from the previous month and the end of the previous year. Below that is a summary of the latest month's activity, in terms of companies added, deleted, or promoted. That is reflected below:

Quick Summary:

6/28/13

Champions

Contenders

Challengers

Total

No. of Companies

104

209

155

468

Ave. No. of Years

39.6

14.3

7.1

17.5

Average Price

59.72

57.54

50.27

55.62

Average % Yield

2.67

2.85

3.33

2.97

Ave. MR % Increase

9.07

8.79

10.39

9.33

5/31/13

Champions

Contenders

Challengers

Total

No. of Companies

104

207

160

471

Ave. No. of Years

39.5

14.2

7.1

17.4

Average Price

60.58

58.62

50.62

56.33

Average % Yield

2.61

2.84

3.30

2.95

Ave. MR % Increase

8.31

8.83

10.40

9.21

12/31/12

Champions

Contenders

Challengers

Total

No. of Companies

105

183

170

458

Ave. No. of Years

39.0

14.3

7.2

17.3

Average Price

53.48

50.89

45.25

49.39

Average % Yield

2.93

3.02

3.62

3.22

Ave. MR % Increase

7.75

8.58

10.43

9.06

MR = Most Recent

Additions:

Armanino Foods of Distinction (OTCPK:AMNF) to Challengers

Deletions:

H.J. Heinz Co. (NYSE:HNZ) from Challengers

National Research Inc. B (NASDAQ:NRCIB) from Challengers

Somerset Hills Bancorp (NASDAQ:SOMH) from Challengers

Tower Group Inc. (NASDAQ:TWGP) from Challengers

Promotions:

Acme United from Challenger to Contender

PSB Holdings Inc. (OTCQB:PSBQ) from Challenger to Contender

(Table from author; may include underlying data from FinViz.com)

Every Picture Tells a Story

As a bonus, I usually insert one of Chuck Carnevale's F.A.S.T. Graphs below, highlighting one of the companies listed above. But the pickings were so slim this month that I am omitting that step. I hope to feature a chart next month, when there may be more possibilities.

Source: Dividend Champions For July 2013