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The Dividend Champions spreadsheet and PDF have been updated through 2/28/11 and are available here. Note that all references to Champions mean companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. Together, all of these companies may be referred to using the abbreviation “CCC.”

This is the eighth in a series of articles focusing on specific industries and isolating the CCC companies within those industries. The first seven can be found under my articles page, beginning on March 2.

Basic Industry and More

Industrial companies could be called the backbone of any economy. They cover a broad spectrum from office supplies to jet fighters and from excavating equipment to packaging materials. A simple way to understand their breadth would be to say that they represent the entire business-to-business universe, producing the products and services that other firms must have to do their own business.

Although there is some overlap with the individual consumer market, most of the output from these companies is sold to other companies, often to be used as part of other products or in producing other products. So a conglomerate like 3M Company (MMM) may make Scotch tape and Post-It Notes that end up in consumer hands, most individuals are unlikely to buy jet engines or helicopters made by United Technologies (UTX), nor are they likely to order Caterpillar (CAT) bulldozers or defense electronics from Lockheed Martin (LMT).

For this article, I'm including all the industrial stocks not covered in earlier articles in this series. So, although some might classify the aerospace/defense sector as an industry worthy of its own article, as just one example, I'm covering such sectors under the broad term of Industrials. Most of the companies included also share similar characteristics in terms of dividend yield and earnings-related ratios. I'm combining three types of Equipment companies as one group, but the number of Machinery and Business Services firms is a good clue about the nature of our economy. The market capitalization of these companies varies from just $31 million (Acme United (ACU)) to over $65 billion (Caterpillar and 3M), with the largest average coming from Conglomerates, Aerospace, and Equipment and the smallest coming from Packaging, Electronics, and the Miscellaneous groups.

The Companies

Industrials make up a large segment of the CCC universe, with 75 firms. Although many of these stand out because of their long histories of dividend increases, the average yield is a full percentage point below the CCC universe, at 1.91%. Fortunately, there is still a wide array of companies with higher yields and larger dividend growth rates, and most of those listed are American companies with substantial foreign operations. Once again, I'm including as many columns of data as is practical, from a perspective of width and significance.

No.

2/28

%

Payout

TTM

NY%

MktCap

DGR

DGR

Company

Symbol

Industry

Yrs

Price

Yield

Inc.

%Ratio

P/E

Growth

($Mil)

5-yr

10-yr

General Dynamics

GD

Aerospace

19

76.12

2.21

10.53

24.67

11.18

7.40

28,370

16.0

12.4

L-3 Communications

LLL

Aerospace

8

79.29

2.27

12.50

21.82

9.61

5.46

8,880

26.2

n/a

Lockheed Martin

LMT

Aerospace

8

79.16

3.79

19.05

37.78

9.97

24.21

27,390

20.2

19.6

Northrop Grumman

NOC

Aerospace

7

66.68

2.82

9.30

27.57

9.78

7.97

19,420

12.7

8.7

Raytheon Company

RTN

Aerospace

6

51.21

2.93

20.97

31.25

10.67

11.85

18,420

10.8

111.5

Averages for

5

Aerospace

9.6

70.49

2.80

14.47

28.62

10.24

11.38

20,496

17.2

38.1

Diebold Inc.

DBD

Bus. Equip.

58

35.16

3.19

3.70

-361.29

-113.42

9.48

2,310

5.7

5.7

Matthews International

MATW

Bus. Equip.

16

37.15

0.86

14.29

13.73

15.94

10.57

1,100

9.4

11.6

Pitney Bowes Inc.

PBI

Bus. Equip.

29

25.18

5.88

1.37

104.96

17.86

-0.43

5,120

3.3

2.5

Raven Industries

RAVN

Bus. Equip.

24

54.26

1.18

14.29

29.77

25.24

8.26

980

18.5

18.2

Deere & Company

DE

Farm Equip.

8

90.15

1.55

16.67

28.11

18.10

16.12

37,950

13.9

10.2

Lindsay Corp.

LNN

Farm Equip.

8

70.61

0.48

6.25

18.99

39.45

23.98

886

7.5

9.0

A.O. Smith Corp.

AOS

Indus. Equip.

17

40.40

1.39

7.69

23.14

16.69

19.32

1,870

4.8

4.9

Badger Meter Inc.

BMI

Indus. Equip.

18

39.31

1.42

16.67

29.32

20.58

12.68

587

12.4

9.2

Caterpillar Inc.

CAT

Indus. Equip.

17

102.93

1.71

4.76

42.41

24.80

29.77

65,750

13.6

10.0

Donaldson Company

DCI

Indus. Equip.

24

56.30

0.92

4.00

20.72

22.43

14.71

4,370

12.1

13.3

Emerson Electric

EMR

Indus. Equip.

54

59.66

2.31

2.99

47.26

20.43

17.38

44,990

9.8

6.4

Franklin Electric Co.

FELE

Indus. Equip.

18

42.50

1.22

4.00

31.90

26.07

23.12

986

6.3

9.1

Met-Pro Corp.

MPR

Indus. Equip.

10

11.41

2.31

10.00

69.47

30.03

26.83

167

6.6

6.2

Parker-Hannifin Corp.

PH

Indus. Equip.

54

89.18

1.44

10.34

24.62

17.15

13.30

14,440

13.3

9.0

Pentair Inc.

PNR

Indus. Equip.

35

37.08

2.16

5.26

40.20

18.63

17.17

3,650

7.9

8.9

Roper Industries Inc.

ROP

Indus. Equip.

18

84.13

0.52

15.79

13.17

25.19

13.85

7,980

12.6

10.5

Averages for

16

Equipment

25.5

54.71

1.78

8.63

11.03

14.07

16.01

12,071

9.9

9.0

ABM Industries Inc.

ABM

Bus. Services

44

26.63

2.10

3.70

45.90

21.83

16.78

1,400

5.2

5.7

Accenture plc

ACN

Bus. Services

5

51.48

1.60

10.00

29.46

18.39

11.71

32,980

22.4

n/a

American Greetings

AM-OLD

Bus. Services

7

21.65

2.59

16.67

25.57

9.89

20.09

869

12.5

-4.1

Automatic Data Proc.

ADP

Bus. Services

36

50.00

2.88

5.88

59.50

20.66

8.03

24,820

17.0

14.5

Brady Corp.

BRC

Bus. Services

25

35.74

2.01

2.86

39.78

19.75

10.92

1,890

8.9

7.4

Cass Information Sys.

CASS

Bus. Services

9

39.05

1.64

14.29

29.77

18.16

n/a

367

10.5

7.6

Cintas Corp.

CTAS

Bus. Services

28

28.12

1.74

2.08

33.56

19.26

15.82

4,090

8.4

9.9

G&K Services Inc.

GKSR

Bus. Services

5

32.42

1.17

26.67

19.49

16.63

12.66

606

37.2

17.1

Harsco Corp.

HSC

Bus. Services

16

34.17

2.40

2.50

1025.00

427.13

51.13

2,750

6.4

5.7

Healthcare Services Gp

HCSG

Bus. Services

9

17.77

3.52

0.59

122.55

34.84

14.29

1,180

37.2

n/a

Jack Henry & Assoc.

JKHY

Bus. Services

19

31.91

1.32

10.53

27.81

21.13

10.26

2,750

16.1

14.3

Landauer Inc.

LDR

Bus. Services

9

62.90

3.50

2.23

84.94

24.29

12.55

592

4.8

4.4

McGrath Rentcorp

MGRC

Bus. Services

19

27.51

3.34

2.22

67.65

20.23

8.28

659

11.0

12.7

National Research Corp.

NRCI

Bus. Services

7

32.71

2.69

15.79

69.84

25.96

n/a

218

18.9

n/a

Ritchie Brothers Auct.

RBA

Bus. Services

8

25.50

1.65

5.00

67.74

41.13

24.68

2,690

16.2

n/a

Robert Half International

RHI

Bus. Services

8

31.90

1.76

7.69

127.27

72.50

54.17

4,670

13.2

n/a

Rollins Inc.

ROL

Bus. Services

9

19.62

1.43

16.67

45.90

32.16

10.29

2,890

22.0

19.8

VSE Corp.

VSEC

Bus. Services

7

27.11

0.89

20.00

5.19

5.87

5.01

141

14.9

11.0

Averages for

18

Bus. Services

15.0

33.12

2.12

9.19

107.05

47.21

17.92

4,753

15.7

9.7

3M Company

MMM

Conglomerate

53

92.23

2.39

4.76

39.08

16.38

11.76

65,650

4.6

6.1

Crane Company

CR

Conglomerate

6

47.24

1.95

15.00

35.52

18.24

15.54

2,750

13.8

8.0

PPG Industries Inc.

PPG

Conglomerate

39

88.38

2.49

1.85

47.52

19.09

10.81

14,190

3.2

3.1

United Technologies

UTX

Conglomerate

16

83.54

2.03

10.39

35.86

17.62

14.23

76,890

14.1

15.2

Averages for

4

Conglomerate

28.5

77.85

2.21

8.00

39.49

17.83

13.08

39,870

8.9

8.1

Daktronics Inc.

DAKT

Electronics

6

11.45

0.87

5.26

-111.11

-127.22

40.63

475

14.9

n/a

Regal Beloit Corp.

RBC

Electronics

6

72.95

0.93

6.25

17.71

19.00

19.57

2,820

5.7

3.2

Watsco Inc.

WSO

Electronics

9

64.58

3.22

8.33

83.53

25.94

24.51

1,980

26.9

35.2

W.W. Grainger Inc.

GWW

Electronics

39

133.21

1.62

17.39

31.17

19.22

12.01

9,240

17.7

12.0

Averages for

4

Electronics

15.0

70.55

1.66

9.31

5.33

-15.77

24.18

3,629

16.3

16.8

Comfort Systems USA

FIX

Indus. Goods

6

13.27

1.51

11.11

45.45

30.16

24.32

502

51.6

n/a

ITT Corp.

ITT

Indus. Goods

8

57.93

1.73

17.65

23.20

13.44

7.97

10,680

22.7

12.8

MSC Industrial Direct

MSM

Indus. Goods

8

63.19

1.39

10.00

33.59

24.12

20.85

4,010

12.8

n/a

Valmont Industries

VMI

Indus. Goods

9

102.08

0.65

3.13

18.49

28.59

23.75

2,670

13.8

9.3

Averages for

4

Indus. Goods

7.8

59.12

1.32

10.47

30.18

24.08

19.22

4,466

25.2

11.0

Cummins Inc.

CMI

Machinery

5

101.12

1.04

50.00

19.89

19.15

21.42

19,790

23.9

11.3

Dover Corp.

DOV

Machinery

55

64.25

1.71

5.77

29.73

17.36

13.24

11,990

10.1

8.3

Flowserve Corp.

FLS

Machinery

5

124.97

1.02

10.34

18.60

18.16

16.12

6,960

n/a

n/a

Gorman-Rupp Company

GRC

Machinery

37

37.33

1.13

5.00

27.10

24.08

14.29

627

7.9

5.2

Graco Inc.

GGG

Machinery

14

40.71

2.06

5.00

49.70

24.09

19.80

2,450

9.0

17.0

Illinois Tool Works

ITW

Machinery

47

54.10

2.51

9.68

44.88

17.85

16.45

26,870

16.8

13.1

Lincoln Electric Holdings

LECO

Machinery

16

71.38

1.74

10.71

40.52

23.33

21.50

3,000

9.2

7.2

Nordson Corp.

NDSN

Machinery

47

108.91

0.77

10.53

15.38

19.95

10.02

3,710

3.9

4.1

Pall Corp.

PLL

Machinery

7

54.36

1.29

9.38

33.65

26.13

13.74

6,280

9.9

-0.3

Robbins & Myers Inc.

RBN

Machinery

5

42.63

0.42

5.88

14.17

33.57

19.91

1,410

9.1

4.4

Tennant Company

TNC

Machinery

39

40.65

1.67

21.43

53.54

32.01

30.59

772

6.0

4.2

NACCO Industries

NC

Machinery

25

124.55

1.68

0.97

20.82

12.41

44.95

1,040

2.4

8.9

Averages for

12

Machinery

25.2

72.08

1.42

12.06

30.67

22.34

20.17

7,075

9.8

7.6

AptarGroup Inc.

ATR

Packaging

17

48.17

1.49

20.00

29.03

19.42

9.39

3,230

13.5

20.8

Bemis Company

BMS

Packaging

28

32.85

2.92

4.35

51.89

17.76

11.67

3,540

5.0

6.7

Greif Inc. A

GEF

Packaging

7

64.66

2.60

10.53

46.93

18.06

11.79

3,050

32.0

19.9

Silgan Holdings Inc.

SLGN

Packaging

8

36.48

1.21

4.76

23.28

19.30

10.98

2,680

16.0

n/a

Sonoco Products Co.

SON

Packaging

27

36.08

3.10

3.70

57.14

18.41

9.92

3,720

3.8

3.5

Averages for

5

Packaging

17.4

43.65

2.27

8.67

41.65

18.59

10.75

3,244

14.1

12.7

Fastenal Company

FAST

Bldg Material

12

62.13

1.61

19.05

55.56

34.52

19.64

9,160

22.1

45.3

Universal Forest Prod.

UFPI

Bldg Material

16

34.10

1.17

233.33

44.94

38.31

31.72

655

30.7

17.5

Acme United Corp.

ACU

Off. Supply

7

10.05

2.39

20.00

25.00

10.47

17.05

31

16.0

n/a

Texas Pacific Land Trust

TPL

R.E. Develop.

6

45.19

0.46

5.00

17.95

38.62

n/a

435

n/a

9.6

Carlisle Companies

CSL

Plastics

34

43.01

1.58

6.25

29.06

18.38

17.73

2,620

6.6

5.7

MOCON Inc.

MOCO

Sci. Instr.

9

13.07

3.06

5.26

51.28

16.76

n/a

69

6.0

5.7

Nucor Corp.

NUE

Steel & Iron

38

47.96

3.02

0.69

345.24

114.19

46.64

15,170

36.9

25.4

Averages for

7

Misc.

17.4

36.50

1.90

41.37

81.29

38.75

26.56

4,020

19.7

18.2

Averages for

75

Industrials

19.2

53.24

1.91

12.86

49.22

24.84

17.66

9,364

14.0

12.2

Averages for

447

CCC Co's

16.7

47.91

2.91

8.20

68.18

21.94

12.39

16,745

12.5

10.3


Summary

Industrial stocks include many with long histories of annual increases, but their generally lower yields are a reminder of their similarity to broader indices, like the S&P 500, which are often dominated by such firms. Like the CCC universe in general, each sub-group offers some exceptional choices for portfolio diversification. I welcome feedback in the Comments section below.

Next Up: Consumer Discretionary stocks.

Disclosure: I am long LMT, RTN, DE, CAT, PNR, MMM, UTX, DOV, ITW, TNC, BMS.

Source: Dividend Champions: Focus on Industrials