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In compiling the 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 histories of increases.

"Dividend in Doubt" Series

This is the fifth in a monthly series listing companies whose latest dividend increase might be considered “overdue” because they have gone more than a year since the previous increase, a possible sign that the streak of increases is in danger. 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. 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 announce an increase in 2011.

This month, I'm again breaking the listing into two groups, which I've labeled “Red Flag” and “Yellow Flag.” The first are companies that face deletion if they do not increase their dividend this year, since their 2011 total dividends paid will equal the amount paid in 2010. The second group last increased their dividend late enough in 2010 to ensure that this year's payout will be higher (barring an actual decrease).

Red Flag

No.

7/29

%

Pay

Qtly

Ann.

Payout

TTM

Company

Symbol

Yrs

Price

Yield

Inc.

Date

Sch

Div.

%Ratio

P/E

CenturyLink Inc.

(NYSE:CTL)

37

37.11

7.81

3.57

3/22/10

C22

2.90

97.32

12.45

Comfort Systems USA

(NYSE:FIX)

6

10.44

1.92

11.11

9/21/09

C21

0.20

100.00

52.20

Consolidated Water Co.

(NASDAQ:CWCO)

13

9.02

3.33

15.38

10/31/09

A31

0.30

83.33

25.06

Gas Natural Inc.

(NYSEMKT:EGAS)

5

11.18

4.83

12.50

4/30/09

Mo.

0.54

58.06

12.02

Harleysville Savings

(OTCQX:HARL)

22

14.98

5.07

5.56

8/19/09

B19

0.76

50.67

9.99

Harsco Corp.

(NYSE:HSC)

16

27.41

2.99

2.50

2/16/10

B16

0.82

683.33

228.42

Meridian Bioscience Inc.

(NASDAQ:VIVO)

19

21.60

3.52

11.76

2/11/10

B11

0.76

122.58

34.84

Natural Resource Part.

(NYSE:NRP)

8

31.29

6.90

0.93

5/14/09

B14

2.16

127.81

18.51

Ohio Valley Banc Corp.

(NASDAQ:OVBC)

15

17.20

4.88

5.00

2/10/10

B10

0.84

64.12

13.13

Public Service Enterprise

(NYSE:PEG)

7

32.75

4.18

3.01

3/31/10

C31

1.37

43.63

10.43

Royal Dutch Shell plc A

(NYSE:RDS.A)

5

73.56

4.57

5.00

6/10/09

C09

3.36

44.04

9.64

Royal Dutch Shell plc B

(NYSE:RDS.B)

5

73.65

4.56

5.00

6/10/09

C09

3.36

44.04

9.65

United Bankshares Inc.

(NASDAQ:UBSI)

37

23.86

5.03

3.45

1/4/10

A04

1.20

72.73

14.46

Universal Forest Prod.

(NASDAQ:UFPI)

16

29.47

1.36

233.33

12/15/09

JnDe

0.40

235.29

173.35

Westamerica Bancorp

(NASDAQ:WABC)

19

46.93

3.07

2.86

2/13/10

B13

1.44

46.01

14.99

Yellow Flag

No.

7/29

%

Pay

Qtly

Ann.

Payout

TTM

Company

Symbol

Yrs

Price

Yield

Inc.

Date

Sch

Div.

%Ratio

P/E

Astro-Med Inc.

(NASDAQ:ALOT)

7

7.90

3.54

16.67

4/2/10

A02

0.28

100.00

28.21

Communications Sys.

(NASDAQ:JCS)

8

17.88

3.36

7.14

7/1/10

A01

0.60

46.51

13.86

First Capital Inc.

(NASDAQ:FCAP)

10

17.03

4.46

5.56

9/30/10

C30

0.76

56.30

12.61

Greif Inc. A

(NYSE:GEF)

7

61.05

2.75

10.53

7/1/10

A01

1.68

33.94

12.33

Inergy LP

(NRGY)

10

31.62

8.92

1.44

8/13/10

B13

2.82

171.95

19.28

ITT Corp.

(NYSE:ITT)

8

53.34

1.87

17.65

4/1/10

A01

1.00

23.98

12.79

Knight Transportation

(NYSE:KNX)

7

15.74

1.52

20.00

6/25/10

C25

0.24

35.82

23.49

MSC Industrial Direct Co.

(NYSE:MSM)

8

61.78

1.42

10.00

7/27/10

A27

0.88

27.50

19.31

Murphy Oil Corp.

(NYSE:MUR)

15

64.22

1.71

10.00

9/1/10

C01

1.10

23.21

13.55

PG&E Corp.

(NYSE:PCG)

6

41.43

4.39

8.33

4/15/10

A15

1.82

68.68

15.63

Pharmaceutical Product

(NASDAQ:PPDI)

6

28.83

2.08

5.71

6/29/10

C29

0.60

49.59

23.83

PPL Corp.

(NYSE:PPL)

9

27.90

5.02

1.45

4/1/10

A01

1.40

59.32

11.82

United Community Bp

(NASDAQ:UCBA)

5

5.45

8.07

10.00

5/28/10

B28

0.44

-366.67

-45.42

Universal Health Realty

(NYSE:UHT)

22

41.21

5.87

0.83

6/30/10

C30

2.42

198.36

33.78

Weyco Group Inc.

(NASDAQ:WEYS)

29

23.16

2.76

6.67

7/1/10

A01

0.64

55.65

20.14

There will be other companies that join this listing as they pass the anniversary of their previous increase without hiking the dividend. Since the determinant for inclusion revolves around the 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.)

Assessing the Risk

Which dividends might be in the greatest danger? Some companies, such as REITs and Master Limited Partnerships, are structured to pay out more than earnings per share, so we can't easily tell much from seemingly high payout ratios or P/Es. Some alarming payout ratios and/or P/Es, like those at Harsco and Meridian Bioscience, might suggest great risk, but a look ahead at the estimated earnings per share for this year and next might provide a bit of comfort. As always, comments and suggestions are welcome.

Source: 30 'Overdue' Dividend Increases -- Will History Repeat Itself?