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Summary

  • Danger of Dividend "Freezes" Abates Significantly.
  • Focus is on Deere, Intel, and Diebold.
  • Trouble Ahead for some MLPs?

In compiling the Dividend Champions list, I get to see which companies are nearing the anniversaries of their previous dividend increases. Most of these firms raise their payout about the same time every year, but some companies go longer before boosting their dividends, and this can raise concerns about their streaks of increases.

Dividends in Doubt Series

This series lists companies whose latest dividend increases might be considered "overdue" because it has been more than a year since the previous increase, a possible sign that their streaks of increases are in danger. Some firms regularly go more than a year between increases, so this is only an "early warning" sign that some of them may warrant concern.

Since the previous update in December, only two of the 31 companies mentioned in that article have been deleted, while 11 companies declared increases, removing themselves from "overdue" status. Since the danger of a dividend "freeze" hinges on completing back-to-back years of equal dividend totals, the 2014 Dividend Streak "Death Watch" won't begin until about August or September, the streaks of most of the companies below aren't in any immediate danger. Of course, any dividend reductions or eliminations would lead to immediate deletion from the CCC listings. Because there doesn't seem to be a likelihood of much activity on this front, I plan to submit the next article in this series in about three months.

This month, I've sorted the Champions, Contenders, and Challengers together, in order of their most recent increases, which shows how long it's been since each company last raised its dividend. Note that companies with dates in 2012 managed to pay their shareholders more in total during 2013 because the former was split between two rates, whereas the latter was composed of payments that all came at the higher rate instituted at the time of the last increase.

All of the listed companies each paid at least one lower amount in 2012 (before their most recent increase), so they automatically paid more in total in 2013, which means their streaks are "safe" until at least the end of 2014.

Streak will end without increase by end of calendar 2014

Company

Ticker

No.

2/28

Div.

Pay

Ann.

EPS%

TTM

FYE

DGR

Name

Symbol

Yrs

Price

Yield

Date

Div.

Payout

P/E

Mo.

5-yr

Communications Systems

(NASDAQ:JCS)

11

13.47

4.75

4/1/12

0.64

n/a

n/a

12

5.9

Constellation Software Inc.

(OTCPK:CNSWF)

7

221.75

1.80

4/2/12

4.00

93.46

51.81

12

85.9

Navios Maritime Partners

(NYSE:NMM)

6

17.10

10.35

8/13/12

1.77

224.05

21.65

12

7.0

Enbridge Energy Partners

(NYSE:EEP)

7

27.53

7.90

8/14/12

2.17

n/a

n/a

12

2.3

1st Source Corp.

(NASDAQ:SRCE)

26

31.20

2.18

8/15/12

0.68

30.49

13.99

12

3.2

Intel Corp.

(NASDAQ:INTC)

10

24.76

3.63

9/1/12

0.90

47.87

13.17

12

10.5

Best Buy Corp.

(NYSE:BBY)

11

26.63

2.55

10/2/12

0.68

n/a

n/a

2

5.1

Eagle Financial Services

(OTCQB:EFSI)

27

23.00

3.30

11/16/12

0.76

36.19

10.95

12

2.6

NuStar GP Holdings LLC

(NYSE:NSH)

8

30.04

7.26

11/16/12

2.18

n/a

n/a

12

7.6

Senior Housing Properties

(NYSE:SNH)

10

22.30

7.00

11/20/12

1.56

195.00

27.88

12

2.2

NACCO Industries

(NYSE:NC)

28

58.91

1.70

12/14/12

1.00

18.18

10.71

12

8.9

Tennant Company

(NYSE:TNC)

42

61.33

1.17

12/14/12

0.72

31.03

26.44

12

6.7

DeVry Inc.

(NYSE:DV)

8

42.01

0.81

12/19/12

0.34

22.82

28.19

6

23.2

First Keystone Corp.

(OTCQB:FKYS)

12

25.50

4.08

12/31/12

1.04

53.33

13.08

12

3.2

C.H. Robinson Worldwide #

(NASDAQ:CHRW)

16

51.86

2.70

12/31/12

1.40

53.03

19.64

12

9.7

Western Union Company

(NYSE:WU)

5

16.74

2.99

12/31/12

0.50

34.97

11.71

12

65.7

First Financial Corp.

(NASDAQ:THFF)

24

34.39

2.79

1/2/13

0.96

40.51

14.51

12

1.8

AptarGroup Inc.

(NYSE:ATR)

20

66.17

1.51

2/20/13

1.00

39.37

26.05

12

12.3

Diebold Inc.

(NYSE:DBD)

60

37.39

3.08

3/8/13

1.15

n/a

n/a

12

2.8

Triangle Capital Corp.

(NYSE:TCAP)

7

28.17

7.67

3/27/13

2.16

75.26

9.82

12

8.4

Deere & Company

(NYSE:DE)

10

85.93

2.37

5/1/13

2.04

22.08

9.30

10

13.4

MOCON Inc.

(NASDAQ:MOCO)

11

16.79

2.62

5/17/13

0.44

65.67

25.06

12

5.7

Streak will end without increase by end of fiscal 2015

Company

Ticker

No.

2/28

Div.

Pay

Ann.

EPS%

TTM

FYE

DGR

Name

Symbol

Yrs

Price

Yield

Date

Div.

Payout

P/E

Mo.

5-yr

Bowl America Class A

(NYSEMKT:BWL.A)

41

15.20

4.34

11/14/12

0.66

113.79

26.21

6

1.9

ConAgra Foods Inc.

(NYSE:CAG)

6

28.40

3.52

12/24/12

1.00

62.11

17.64

5

5.6

TTM=Trailing Twelve Months; FYE=Fiscal Year End; #=Paid Accelerated Dividend in December 2012

Note that companies with Pay Dates that are less than a year old have already declared an unchanged next dividend, so they will become 'overdue' with that (next) dividend payment. Other companies will join this list as they pass the anniversaries of their previous increases without hiking their dividends. Since the determinant for inclusion revolves around the Dividend Payment, that Date is listed above, along with the Payout Ratio and the Price/Earnings ratio, two key indicators of a company's ability to increase the payout. Some companies, such as REITs (Real Estate Investment Trusts) and MLPs (Master Limited Partnerships), are structured to pay out more than earnings per share, so we can't easily tell from seemingly high payout ratios or P/Es just how risky they are. Some seemingly alarming ratios might suggest great risk, but a look ahead at the estimated earnings per share for this year or next might prove a bit more comforting. Companies with shorter streaks may be more likely to allow them to lapse, since they haven't yet established long histories (or "cultures") of rewarding shareholders with growing dividends. As always, comments and suggestions are welcome below.

Source: 'Overdue' Dividend Increases: Quiet Time Again