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In compiling a Dividend Champions list, I get to see which companies are nearing the anniversaries of their previous dividend increases. Most of these firms raise their payout about the same time every year, but some companies go longer before boosting their dividends, and this can raise concerns about their streaks of increases.

Dividend-Doubt Series

This is the third in a monthly series listing companies whose latest dividend increase might be considered “overdue” because these companies have gone more than a year since their previous increase, a possible sign that the dividend (or at least the streak of increases) is in danger. (Note that the dates for these companies appears in red in the Dividend Champions spreadsheet and PDF.) Some firms regularly go more than a year between increases, so this is only an “early warning” sign that some of them may warrant concern. This series is intended to augment David Van Knapp's series about possible “Dividends in Danger?” As we get closer to year-end, some of the listing will act as a dividend streak “death watch,” since it will include companies that will be deleted if they fail to increase the dividend in 2011 (making the payout unchanged from that of 2010).

This month, I'm presenting the list a bit differently. Rather than break it down into Champions (25+ years of increases), Contenders (10-24 years), and Challengers (5-9 years), I'm including all companies in one list and sorting them alphabetically:

No.

5/31

%

Pay

Payout

TTM

Company

Symbol

Yrs

Price

Yield

Inc.

Date

%Ratio

P/E

*

Allied World Assurance Co.

AWH

5

60.62

1.32

11.11

12/10/09

6.93

5.25

1

Astro-Med Inc.

ALOT

7

8.10

3.46

16.67

4/2/10

100.00

28.93

3

CenturyLink Inc.

CTL

37

43.19

6.71

3.57

3/22/10

97.32

14.49

1

Comfort Systems USA Inc.

FIX

6

10.37

1.93

11.11

9/21/09

100.00

51.85

2

Communications Systems

JCS

8

18.40

3.26

7.14

7/1/10

46.51

14.26

1

Community Bank System

CBU

17

25.08

3.83

9.09

7/9/10

49.23

12.86

2

Consolidated Water Co.

CWCO

13

9.64

3.11

15.38

10/31/09

83.33

26.78

3

Gas Natural Inc.

EGAS

5

11.50

4.70

12.50

4/30/09

58.06

12.37

1

Greif Inc. A

GEF

7

66.12

2.54

10.53

7/1/10

35.15

13.83

1

Harleysville Savings

OTCQB:HARL

22

14.90

5.10

5.56

8/19/09

57.14

11.20

2

Harsco Corp.

HSC

16

33.51

2.45

2.50

2/16/10

683.33

279.25

0

Investors Real Estate Trust

IRET

39

9.69

7.08

0.29

1/15/10

285.83

40.38

0

ITT Corp.

ITT

8

57.62

1.74

17.65

4/1/10

23.98

13.82

0

Knight Transportation Inc.

KNX

7

17.10

1.40

20.00

6/25/10

35.82

25.52

0

Meridian Bioscience Inc.

VIVO

19

23.86

3.19

11.76

2/11/10

124.59

39.11

0

Natural Resource Partners

NRP

8

32.29

6.69

0.93

5/14/09

127.81

19.11

1

Ohio Valley Banc Corp.

OVBC

15

18.40

4.57

5.00

2/10/10

64.12

14.05

0

PG&E Corp.

PCG

6

43.38

4.20

8.33

4/15/10

68.68

16.37

0

Pharmaceutical Product Dev

PPDI

6

28.85

2.08

5.71

6/29/10

49.59

23.84

0

PPL Corp.

PPL

9

28.19

4.97

1.45

4/1/10

59.32

11.94

0

Public Service Enterprise Gp

PEG

7

33.50

4.09

3.01

3/31/10

43.63

10.67

0

Royal Dutch Shell plc A

RDS.A

5

71.43

4.70

5.00

6/10/09

44.04

9.36

0

Royal Dutch Shell plc B

RDS.B

5

72.32

4.65

5.00

6/10/09

44.04

9.48

0

Tompkins Financial Corp.

TMP

24

38.75

3.51

10.00

5/14/10

43.45

12.38

3

United Bankshares Inc.

UBSI

37

24.25

4.95

3.45

1/4/10

72.29

14.61

2

United Community Bancorp

UCBA

5

6.57

6.70

10.00

5/28/10

-366.67

-54.75

0

Universal Forest Products

UFPI

16

29.23

1.37

233.33

12/15/09

61.54

44.97

0

Universal Health Realty Trust

UHT

22

43.31

5.59

0.83

6/30/10

187.60

33.57

0

Westamerica Bancorp

WABC

19

50.30

2.86

2.86

2/13/10

45.28

15.82

1

Weyco Group Inc.

WEYS

29

24.08

2.66

6.67

7/1/10

55.65

20.94

0

*Number of years with no increase (1999-2010), except Challengers, which shows number of years with no increase since streak began.

There will be other companies that join this listing during the year as they pass the anniversary of their previous increase without hiking the dividend. Since the determinant for inclusion revolves around the actual dividend payment, that date is listed above, along with the payout ratio and the price/earnings ratio, two key indicators of a company's ability to increase the payout. (Because of space limitations, I'm limiting the columns shown.)

Some Companies at Greater Risk Than Others

So which dividends might be in danger? Some companies, such as REITs (Real Estate Investment Trusts) and MLPs (Master Limited Partnerships), have a tendency to pay out much more than earnings per share, simply because of their legal structure, so we can't tell much from seemingly high payout ratios or P/Es in such cases. Some alarming payout ratios and/or P/Es, like those at Harsco and Meridian Bioscience, may suggest great risk, but a look ahead at the estimated earnings per share for this year and next might provide a bit of comfort.

Note that delayed dividend hikes at some companies, such as PPL, Astro-Med, and PG&E will not result in deletion this year because those companies paid at least one dividend at a lower rate in 2010, meaning that the total payout in 2011 will be higher, barring an actual reduction. The Challengers group may see more streaks end, simply because they have not yet established a “culture” of dividend increases.

Source: 30 'Overdue' Dividend Increases: Payouts in Peril?