- I reviewed the three companies that raised dividends last week, and met my minimum yield and streak of dividend increases.
- Those companies are ideas for further research, both qualitative and quantitative.
- Investors should purchase quality at appropriate valuations, and avoid overpaying for securities.
I review dividend increases every week. I review all of them, but focus on those that have raised at least for a decade, and have at least a minimum yield, before I take the time to research them any further.
The following companies that managed to raise dividends in the past week met the minimum yield and length of consecutive increases:
Air Products and Chemicals, Inc. (NYSE:APD) provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company operates through four segments: Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy. Last week, the Board of directors raised quarterly dividends by 8.50% to 77 cents/share. This marked the 32nd consecutive annual dividend increase for this dividend champion. Over the past decade, Air Products and Chemicals has managed to increase dividends by 12.20%/year.
The company has managed to increase earnings per share from $2.64 in 2004 to $4.73 by 2013. The company is expected to earn $5.78/share in 2014 and $6.41/share in 2015.
The time to buy this company was in early 2013. Currently, this dividend champion is overvalued at 25.80 times earnings, and yields 2.50%. I would be more interested in the company when it sells below 20 times earnings, provided I don't find even better values in comparison.
W. P. Carey Inc (NYSE:WPC) invests in the real estate markets across the globe. This real estate investment trust (REIT) also provides long-term sale-leaseback and build-to-suit financing for companies. Last week, the REIT approved a hike in the quarterly dividend to 89.50 cents/share. The current payment is 9.10% higher than the one paid in the same time last year. W.P. Carey has managed to increase dividends for 16 years in a row. In the past decade, W.P. Carey has managed to increase dividends by 6.30%/year.
The REIT has adjusted Funds from Operations (AFFO) of $4.22/share in 2013, and expects $4.40 to $4.65 per diluted share for the 2014 full year. The REIT generated $2.81/share in 2004.
This dividend achiever currently yields 5.80%. I need to add it to my list for further research, in order to decide if it's worthy of my investment dollars.
Raytheon Company (NYSE:RTN) develops integrated products, services, and solutions in the areas of sensing; effects; command, control, communications, and intelligence; mission support; and cyber and information security worldwide. It operates in four segments: Integrated Defense Systems; Intelligence, Information, and Services; Missile Systems; and Space and Airborne Systems. Last week, the Board of directors raised quarterly dividends by 9.10% to 60 cents/share. This marked the 10th consecutive annual dividend increase for the company. Over the past decade, Raytheon has managed to increase dividends by 10.40%/year.
The company has managed to increase earnings per share from $0.99 in 2004 to $5.84 by 2013. The company is expected to earn $6.94/share in 2014 and $7.82/share in 2015.
Currently, this dividend achiever is attractively valued at 16.20 times earnings, and yields 2.50%. I need to add Raytheon to my list of companies for further research.
These are not buy recommendations, but ideas for further research. Investors should start their research by focusing on quantitative factors like earnings per share, revenues, and dividends per share trends. In addition, investors should also pay attention to qualitative factors that would ensure that the business model stays intact, and the business would generate more profits over time to pay for the future dividend increases. Finally, investors should also make sure that they are not overpaying for the companies they want to purchase, in order to allocate their capital to the most promising future streams of income.
Disclosure: I am long APD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.