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Earlier this month, I published an article showing the 59 Dividend Champions, Challengers, and Contenders (the CCCs) with current yields over 5.0%. Last week, I found myself commenting on a statement elsewhere that most dividend-stalwart stocks are large-cap stocks. Reflexively, I did not believe that to be true, because I have been studying dividend-growth stocks for several years and have found that they come in all shapes and sizes.
But I have never focused on cap size when evaluating dividend-growth stocks, so I wondered what the facts are. In the table below, those same 59 stocks from the earlier article are arranged by Morningstar’s designations of Small-Cap, Mid-Cap, and Large-Cap. The vertical axis divides them by yield, so this represents a “style box” of sorts for the highest-yielding CCCs.
Highest-Yielding CCCs by Cap Size
Yield %
Small-Cap
Mid-Cap
Large-Cap
9.0 - 9.5
(NYSE:VGR) 9.5
8.5 – 8.9
(NASDAQ:PNNT) 8.5
8.0 – 8.4
(NYSE:STON) 8.0
7.5 – 7.9
7.0 – 7.4
(NYSE:IRET) 7.4
(NYSE:CTL) 7.0
6.5 – 6.9
(NYSE:TGP) 6.6
(NYSE:GTY) 6.5
(NYSE:NPK) 6.5
(NRGY) 6.8
(NYSE:TEF) 6.9
6.0 – 6.9
(NASDAQ:EXLP) 6.4
(NYSE:OHI) 6.2
(NYSE:UHT) 6.1
(NYSE:TLP) 6.1
(NYSE:WPC) 6.0
(NYSE:NGLS) 6.4
(NYSE:BWP) 6.3
(NYSE:BPL) 6.1
(NYSE:NS) 6.1
(NYSE:NRP) 6.1
(NYSE:SNH) 6.0
(NYSE:RAI) 6.2
(NYSE:T) 6.1
(NYSE:KMP) 6.1
(NYSE:MO) 6.0
5.5 – 5.9
(NYSE:NNN) 5.9
(NYSE:SPH) 5.9
(NASDAQ:UCBA) 5.9
(NYSE:MCY) 5.8
(NYSE:DPM) 5.8
(NASDAQ:CHEV) 5.7
(NYSE:HEP) 5.7
(NYSE:CMLP) 5.7
(NYSE:WRE) 5.6
(NYSE:PBI) 5.9
(NYSE:PAA) 5.9
(NYSE:APU) 5.8
(NYSE:ORI) 5.6
(TCLP) 5.5
(NYSE:OKS) 5.5
(NYSE:SEP) 5.5
(NYSE:PPL) 5.5
(NYSE:DUK) 5.5
5.0 – 5.4
(NYSE:VVC) 5.2
(NYSE:NHI) 5.2
(NYSE:NSH) 5.2
(NYSE:UBA) 5.1
(NYSE:ETE) 5.4
(NYSE:SXL) 5.3
(NYSE:TAC) 5.3
(NASDAQ:HCBK) 5.2
(NYSE:DPL) 5.1
(NYSE:MMP) 5.0
(NYSE:CNP) 5.0
(NYSE:EPD) 5.4
(NYSE:WPZ) 5.4
(NYSE:VZ) 5.3
(NYSE:HCP) 5.1
The results go against conventional wisdom. Nearly half (26) of the stocks are small-cap. Almost as many (21) are mid-cap. Just 12 are large-cap stocks.
Morningstar does not provide exact definitions of what size constitutes small, mid, and large-cap. Instead, it uses a flexible system under which “large-cap stocks are defined as the group that accounts for the top 70% of the capitalization of each geographic area; mid-cap stocks represent the next 20%; and small-cap stocks represent the balance.” So I did some sampling of the stocks above to see what their sizes were. The largest small-cap stock in my sample had a cap size of $2.2 Billion (VVC). The smallest mid-cap was $3.0 Billion (DPL), and the largest mid-cap was $9.0 Billion (ETE). The smallest large-cap was $15 Billion (WPZ). So that gives you some idea of where the break-points were under Morningstar’s classification system on the day I looked up the data. I do not know how often they update their designations in their fluid system.
What is the significance of this information, besides demonstrating that the common wisdom about most dividend stalwarts being large-cap stocks is not true? I would use it for diversification purposes. I have often said that when I purchase a dividend-growth stock, I try to improve my portfolio along some dimension. One of those dimensions is diversity, and one aspect of diversity is cap size.
Thanks again to David Fish for his gracious permission to create various snapshots of his superlative Dividend CCC document (pdf). The information was drawn from his end-of-February update. Given the recent downdraft in the market, some of the yields depicted here have undoubtedly changed, and in fact a few more stocks may now clear the 5.0% hurdle used for this article.



Disclosure: I am long KMP, T, TEF.

Source: The Highest-Yielding Dividend Champions by Cap Size