Dividend Challengers: 12 Increases Expected By The End Of April

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 |  Includes: ELS, FLS, LO, MJN, NATL, NWE, PDER, RTN, TCAP, TMK, WR, WSM
by: David Fish

Executive summary:

  • Five Challengers to be promoted to Contender status
  • Could Lorillard reach 5% yield?
  • The lull before the shareholder meeting boom

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In compiling the Dividend Champions list (found here) 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. I have modified the Expected Increase series to reflect a more SA-friendly format by separating the Champions (25 or more years of higher dividends), Contenders (10-24 years), and Challengers (5-9 years) into distinct groupings, so please look for the other articles, which I hope will be published about the same time.

Gearing up for Shareholder Meeting Season

As expected, the pace of increases picked up in February, and March will also feature plenty of dividend hikes, to be followed by many more in the second quarter, when most companies hold their annual shareholder meetings. Boards of Directors apparently like to give company owners something to smile about heading into those get-togethers. The table below coincides with the usual "forward look" of about 11 weeks for this article. Based on last year's announcements, I'm expecting the following companies to announce dividend increases between now and the anniversary of the Ex-Dividend Date of their previous increase:

Dividend Challengers (5-9 years):

Company

Ticker

No.

1/31

Div.

MR%

LY

Ann.

Name

Symbol

Yrs

Price

Yield

Inc.

Ex-Div

Div.

Pardee Resource Co.

(OTCPK:PDER)

8

235.00

2.89

3.03

2/26/13

6.80

Lorillard Inc.

(NYSE:LO)

6

49.22

4.47

6.45

2/27/13

2.20

National Interstate Corp.

(NASDAQ:NATL)

9

22.57

1.95

10.00

3/6/13

0.44

Westar Energy

(NYSE:WR)

9

33.17

4.10

3.03

3/7/13

1.36

Mead Johnson Nutrition

(NYSE:MJN)

5

76.89

1.77

13.33

3/11/13

1.36

Triangle Capital Corp.

(NYSE:TCAP)

7

26.96

8.01

1.89

3/11/13

2.16

NorthWestern Corp.

(NYSE:NWE)

9

45.21

3.36

2.70

3/13/13

1.52

Equity LifeStyle Prop.

(NYSE:ELS)

9

39.31

2.54

14.29

3/26/13

1.00

Flowserve Corp.

(NYSE:FLS)

7

72.33

0.77

16.67

3/26/13

0.56

Raytheon Company

(NYSE:RTN)

9

95.07

2.31

10.00

4/1/13

2.20

Torchmark Corp.

(NYSE:TMK)

8

75.15

0.90

13.33

4/3/13

0.68

Williams-Sonoma Inc.

(NYSE:WSM)

8

54.52

2.27

40.91

4/24/13

1.24

Click to enlarge

MR=Most Recent; LY=Last Year

Not all of the above companies will meet the strict standards of every investor, but some may be appropriate for portfolio diversification. Potential investors should do more research before committing funds.

Coming Very Soon

In late February or early March, a new wave of Challengers should push the CCC listings to more than 500 companies, and that wave should continue throughout 2014, as more companies reach five consecutive years of dividend growth.

Every Picture Tells a Story

As a bonus, I'm inserting one of Chuck Carnevale's F.A.S.T. Graphs below, highlighting one of the companies listed above. When the stock's price line has moved into the green area, it indicates that the stock is undervalued in relation to its earnings. I'm attaching the chart below.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.