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Summary

  • 7 companies expected to graduate to contender status.
  • 17 near-challengers about to graduate.
  • Is Darden's increase in danger?

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 separated 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. Note that "CCC" refers to the combination of Champions, Contenders, and Challengers.

Summer Doldrums Continue

The pace of dividend increases dropped off in June, as expected, and July is likely to extend the periodic lull in dividend-increase activity before the pace picks up again in August. We're also likely see the usual spate of quarterly hikes in late July and early August by more than two dozen Master Limited Partnerships (or MLPs), particularly among the Contenders and Challengers. Meanwhile, the addition of new Challengers appears ready to take a break until late July. 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.

5/30

Div.

MR%

LY

Ann.

Name

Symbol

Yrs

Price

Yield

Inc.

Ex-Div

Div.

Darden Restaurants

(NYSE:DRI)

9

50.12

4.39

10.00

7/8/13

2.20

Oracle Corp.

(NYSE:ORCL)

5

42.02

1.14

100.00

7/10/13

0.48

StoneMor Partners LP

(NYSE:STON)

9

23.75

10.11

0.84

8/1/13

2.40

Reinsurance Group

(NYSE:RGA)

5

78.16

1.54

25.00

8/7/13

1.20

PetMed Express Inc.

(NASDAQ:PETS)

5

13.30

5.11

13.33

8/8/13

0.68

Altera Corp.

(NASDAQ:ALTR)

7

33.13

1.81

50.00

8/8/13

0.60

Chemed Corp.

(NYSE:CHE)

5

88.08

0.91

11.11

8/8/13

0.80

Textainer Group Holdings

(NYSE:TGH)

7

38.74

4.85

2.17

8/14/13

1.88

Duke Energy Corp.

(NYSE:DUK)

9

71.08

4.39

1.96

8/14/13

3.12

Ryder System

(NYSE:R)

9

86.79

1.57

9.68

8/15/13

1.36

Cummins Inc.

(NYSE:CMI)

8

152.93

1.63

25.00

8/20/13

2.50

Steris Corp.

(NYSE:STE)

9

53.52

1.57

10.53

8/26/13

0.84

Crane Company

(NYSE:CR)

9

74.11

1.62

7.14

8/28/13

1.20

Delta Natural Gas

(NASDAQ:DGAS)

9

19.71

3.86

5.56

8/28/13

0.76

Orange County Bancorp Inc.

(OTCQB:OCBI)

6

39.50

3.95

2.63

8/29/13

1.56

Bob Evans Farms

(NASDAQ:BOBE)

8

44.67

2.78

12.73

8/29/13

1.24

McKesson Corp.

(NYSE:MCK)

6

189.64

0.51

20.00

8/29/13

0.96

MR=Most Recent; LY=Last Year

In addition, there's a slew of Near-Challengers that are on schedule to record their fifth year of increases by the end of August:

Company

Ticker

No.

LY

Name

Symbol

Yrs

Ex-Div

Northwest Bancshares Inc.

(NASDAQ:NWBI)

4

7/30/13

Calumet Specialty Prod. LP

(NASDAQ:CLMT)

4

7/31/13

BT Group plc

(NYSE:BT)

4

8/7/13

Ultrapar Holdings Inc.

(NYSE:UGP)

4

8/8/13

Diageo plc

(NYSE:DEO)

4

8/14/13

KLA-Tencor Corp.

(NASDAQ:KLAC)

4

8/14/13

Littelfuse Inc.

(NASDAQ:LFUS)

4

8/19/13

Marathon Oil Corp.

(NYSE:MRO)

4

8/19/13

Resources Connection Inc.

(NASDAQ:RECN)

4

8/20/13

British American Tobacco

(NYSEMKT:BTI)

4

8/21/13

Hershey Company

(NYSE:HSY)

4

8/21/13

Marten Transport Ltd.

(NASDAQ:MRTN)

4

8/23/13

Scotts Miracle-Gro Co.

(NYSE:SMG)

4

8/23/13

Cosan Ltd. A

(NYSE:CZZ)

4

8/27/13

CBOE Holdings Inc.

(NASDAQ:CBOE)

4

8/28/13

Group 1 Automotive Inc.

(NYSE:GPI)

4

8/28/13

Wendy's Company

(NASDAQ:WEN)

4

8/29/13

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.

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.

Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: Dividend Challengers: 17 Increases Expected By August 29