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In compiling the Dividend Champions list (found here) 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.

Dividends in Doubt Series

This monthly series lists companies whose latest dividend increases might be considered “overdue” because it has been more than a year since the previous increase, a possible sign that their streaks of increases are 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 increased 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 insure that this year's payout will be higher (barring an actual decrease).

"Red Flag"

No.

8/31

%

Pay

Ann.

Payout

TTM

Company

Sym

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

Gas Natural Inc.

(NYSEMKT:EGAS)

5

10.98

4.92

12.50

4/30/09

0.54

62.79

12.77

Natural Resource Part.

(NYSE:NRP)

8

28.88

7.48

0.93

5/14/09

2.16

121.35

16.22

Royal Dutch Shell plc A

(NYSE:RDS.A)

5

67.05

5.01

5.00

6/10/09

3.36

37.46

7.47

Royal Dutch Shell plc B

(NYSE:RDS.B)

5

67.48

4.98

5.00

6/10/09

3.36

37.46

7.52

Harleysville Savings

(OTCQX:HARL)

22

14.24

5.34

5.56

8/19/09

0.76

50.67

9.49

Comfort Systems USA

(NYSE:FIX)

6

9.56

2.09

11.11

9/21/09

0.20

80.00

38.24

Consolidated Water Co.

(NASDAQ:CWCO)

13

8.15

3.68

15.38

10/31/09

0.30

71.43

19.40

Universal Forest Products

(NASDAQ:UFPI)

16

30.56

1.31

233.33

12/15/09

0.40

235.29

179.76

United Bankshares Inc.

(NASDAQ:UBSI)

37

22.47

5.34

3.45

1/4/10

1.20

72.73

13.62

Ohio Valley Banc Corp.

(NASDAQ:OVBC)

15

17.38

4.83

5.00

2/10/10

0.84

63.16

13.07

Meridian Bioscience Inc.

(NASDAQ:VIVO)

19

18.50

4.11

11.76

2/11/10

0.76

122.58

29.84

Westamerica Bancorp

(NASDAQ:WABC)

19

42.41

3.40

2.86

2/13/10

1.44

46.15

13.59

Harsco Corp.

(NYSE:HSC)

16

22.86

3.59

2.50

2/16/10

0.82

372.73

103.91

CenturyLink Inc.

(NYSE:CTL)

37

36.15

8.02

3.57

3/22/10

2.90

142.86

17.81

Public Service Enterprise

(NYSE:PEG)

7

34.13

4.01

3.01

3/31/10

1.37

40.90

10.19

"Yellow Flag"

No.

8/31

%

Pay

Ann.

Payout

TTM

Company

Sym

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

ITT Corp.

(NYSE:ITT)

8

47.34

2.11

17.65

4/1/10

1.00

26.32

12.46

PPL Corp.

(NYSE:PPL)

9

28.88

4.85

1.45

4/1/10

1.40

59.07

12.19

Astro-Med Inc.

(NASDAQ:ALOT)

7

7.50

3.73

16.67

4/2/10

0.28

73.68

19.74

PG&E Corp.

(NYSE:PCG)

6

42.35

4.30

8.33

4/15/10

1.82

67.41

15.69

United Community Banc

(NASDAQ:UCBA)

5

5.66

7.77

10.00

5/28/10

0.44

n/a

n/a

Knight Transportation Inc.

(NYSE:KNX)

7

15.15

1.58

20.00

6/25/10

0.24

35.29

22.28

Pharmaceutical Product

(NASDAQ:PPDI)

6

31.48

1.91

5.71

6/29/10

0.60

41.96

22.01

Universal Health Realty

(NYSE:UHT)

22

37.42

6.47

0.83

6/30/10

2.42

198.36

30.67

Weyco Group Inc.

(NASDAQ:WEYS)

29

22.75

2.81

6.67

7/1/10

0.64

52.89

18.80

Greif Inc. A

(NYSE:GEF)

7

55.86

3.01

10.53

7/1/10

1.68

33.94

11.28

Communications Sys.

(NASDAQ:JCS)

8

14.58

4.12

7.14

7/1/10

0.60

40.54

9.85

MSC Industrial Direct

(NYSE:MSM)

8

61.67

1.43

10.00

7/27/10

0.88

27.50

19.27

Inergy LP

(NRGY)

10

28.36

9.94

1.44

8/13/10

2.82

343.90

34.59

Murphy Oil Corp.

(NYSE:MUR)

15

53.58

2.05

10.00

9/1/10

1.10

22.31

10.87

First Capital Inc.

(NASDAQ:FCAP)

10

18.48

4.11

5.56

9/30/10

0.76

56.72

13.79

Corporate Office Prop.

(NYSE:OFC)

13

26.79

6.16

5.10

10/15/10

1.65

-275.0

-44.65

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 (Real Estate Investment Trusts) and MLPs (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 below.

Source: 31 'Overdue' Dividend Increases: Streaks In Jeopardy?