As a dividend growth investor, two of the best dividend lists for further research that I have focused on have been the S&P Dividend Aristocrats and the Dividend Achievers Indexes. The first list focuses on stocks which have increased dividends for 25 consecutive years in row, while the second list focuses on stocks which have consistently raised distributions for over one decade. The Dividend Aristocrats index has supposedly outperformed the stock market over the past five years. In my research I have uncovered many dividend stocks however which have raised dividends for more than 25 years in a row, yet they are not included in the Dividend Aristocrats Index. I discussed this in dividend conspiracies.
The limitations behind the dividend aristocrat’s index are that first a company has to be included in the S&P 500 before it qualifies. In addition to that, S&P requires minimum market capitalization of $3 billion and an average daily trading volume of $5 million. This means that even if a company has managed to raise annual dividends for 25 years in a row, it might not be included in the elite dividend index if it has a low market capitalization or that it is relatively illiquid. As a dividend investor, the last two criteria are irrelevant to me.
Luckily, dividend investor David Fish has created a list of dividend stocks which have raised distributions for 25 consecutive years and has named it the dividend champions list. His list includes 100 companies, which is more than twice the size of the Dividend Aristocrats. I ran a screen on the list in order to identify stocks for further research. My criteria were as follows:
- Price/Earnings Ratio below 20
- Dividend Yield > 2.50%
- Dividend Payout Ratio <>
I have separated the stocks by sector and also have included a brief description as well as a link to my most recent analysis of each stock:
(Click to enlarge)
Exxon Mobil Corporation (XOM) engages in the exploration, production, transportation, and sale of crude oil and natural gas. It also involves in the manufacture, transportation, and sale of petroleum products. (Analysis)
3M Company (MMM), together with its subsidiaries, operates as a diversified technology company worldwide. It operates in six segments: Industrial and Transportation; Healthcare; Consumer and Office; Safety, Security and Protection Services; Display and Graphics; and Electro and Communications. (Analysis)
The Clorox Company (CLX) engages in the production, marketing, and sales of consumer products in the United States and internationally. The company operates through four segments: Cleaning, Lifestyle, Household, and International. (Analysis)
Kimberly-Clark Corporation (KMB), together with its subsidiaries, engages in the manufacture and marketing of various health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional and Other, and Healthcare. (Analysis)
PepsiCo, Inc. (PEP) manufactures, markets, and sells various foods, snacks, and carbonated and non-carbonated beverages worldwide. The company operates in four divisions: PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages (PAS), PepsiCo Europe, and PepsiCo Asia. (Analysis)
The Procter & Gamble Company (PG) engages in the manufacture and sale of consumer goods worldwide. The company operates in three global business units (GBUs): Beauty, Health and Well-Being, and Household Care. (Analysis)
Sonoco Products Company (SON) provides industrial and consumer packaging products, and packaging services in North and South America, Europe, Australia, and Asia.
Universal Corporation (UVV), together with its subsidiaries, operates as the leaf tobacco merchants and processors worldwide. It engages in selecting, procuring, buying, processing, packing, storing, supplying, shipping, and financing leaf tobacco for sale. (Analysis)
V.F. Corporation (VFC), together with its subsidiaries, engages in the design, manufacture, and sourcing of branded apparel and related products for men, women, and children in the United States. (Analysis)
Weyco Group, Inc. (WEYS) engages in the retail and wholesale distribution of men’s footwear in North America, Australia, South Africa, the Asia Pacific, and Europe. It offers men’s casual, dress, and fashion shoes under Florsheim, Nunn Bush, Stacy Adams, Brass Boot, and Nunn Bush NXXT brands.
Bank of Hawaii Corporation (BOH) operates as the holding company for Bank of Hawaii that provides a range of financial services and products in Hawaii and the Pacific Islands. The company operates in four segments: Retail Banking, Commercial Banking, Investment Services, and Treasury.
Commerce Bancshares, Inc. (CBSH) operates as the bank holding company for Commerce Bank, N.A. that provides various general banking services to individuals and businesses. It operates in three segments: Consumer, Commercial, and Wealth. (Analysis)
Cincinnati Financial Corporation (CINF), through its subsidiaries, operates in the property casualty Insurance business in the United States. It operates in four segments: Commercial Lines Property Casualty Insurance, Personal Lines Property Casualty Insurance, Life Insurance, and Investment. (Analysis)
Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of health care products worldwide. It operates in four segments: Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products. (Analysis)
Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the healthcare field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. (Analysis)
Eli Lilly and Company (LLY) develops, manufactures, and sells pharmaceutical products worldwide. If the company doesn’t raise dividends in 2010 however, it would be out of the dividend champions list. (Analysis)
Medtronic, Inc. (MDT) develops, manufactures, and sells device-based medical therapies worldwide. The company operates in the following segments:Cardiac Rhythm Disease Management , Spinal, CardioVascular, Neuromodulation, Diabetes, Surgical Technologies and Physio-Control.
Teleflex Incorporated (TFX) primarily develops, manufactures, and supplies single-use medical devices used by hospitals and healthcare providers worldwide. The company operates through three segments, Medical, Aerospace and Commercial. (Analysis)
Emerson Electric Co. (EMR), a diversified global technology company, engages in designing and supplying product technology, as well as delivering engineering services and solutions to various industrial, commercial, and consumer markets worldwide. The company operates in five segments: Process Management, Industrial Automation, Network Power, Climate Technologies and Appliance and Tools. (Analysis)
Illinois Tool Works Inc. (ITW) manufactures a range of industrial products and equipment worldwide. The company’s segments include Transportation, Industrial Packaging, Food Equipment, Power Systems and Electronics, Construction Products, Polymers and Fluids and Decorative Surfaces. (Analysis)
RPM International Inc.(RPM) engages in the manufacture, marketing, and sale of various specialty chemical products to industrial and consumer markets worldwide. The company operates through two segments, Industrial and Consumer. (Analysis)
McDonald’s Corporation (MCD), together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonalds restaurants that offer various food items, soft drinks, coffee, and other beverages. (Analysis)
The McGraw-Hill Companies, Inc. (MHP) provides information services and products to the education, financial services, and business information markets worldwide. It operates in three segments: McGraw-Hill Education, Financial Services, and Information and Media. (Analysis)
Walgreen Co. (WAG), together with its subsidiaries, operates a chain of drugstores in the United States. The drugstores sell prescription and non-prescription drugs, and general merchandise. (Analysis)
Automatic Data Processing, Inc. (ADP) provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers. It operates in three segments: Employer Services, Professional Employer Organization Services, and Dealer Services. (Analysis)
American States Water Company (AWR), through its subsidiaries, provides water, electric, and contracted services in the United States. The company engages in the purchase, production, distribution, and sale of water in California; and the distribution of electricity in San Bernardino Mountain communities.
National Fuel Gas Company (NFG), through its subsidiaries, operates as a diversified energy company primarily in the United States. The company operates through four segments: Utility, Pipeline and Storage, Exploration and Production, and Energy Marketing.
Piedmont Natural Gas Company, Inc. (PNY), an energy services company, distributes natural gas to residential, commercial, industrial, and power generation customers in portions of North Carolina, South Carolina, and Tennessee.
Mechanical investing is not what I am writing about here. It is just the beginning step in order to bring the list to a manageable list. The rest is up to investor to determine whether a certain stock is a buy.
Disclosure: Author is long ABT, ADP,APD, CB, CINF, CL, CLX, EMR, JNJ, KMB, KO, MCD, MHP, MMM PEP,PG, RPM, SYY, UVV, WAG and XOM.