The DRIP Investing Resource Center’s list of U.S. Dividend Champions includes 101 companies that have increased dividends for at least 25 consecutive years. Below are brief summaries of each company’s dividend track record and recaps of some key measures of valuation. Because of their commitment to consistently paying and raising dividends, all of these stocks can make wonderful additions to dividend income portfolios, particularly for DRIP investors with long investment timelines, though it is important to remember to match specific stocks with individual needs.
W.W. Grainger Inc. (NYSE:GWW) – This borderline mid/large-cap industrial equipment wholesaler has increased its dividend 40 years in a row. In May, its quarterly payment increased to $0.66 a share from $0.54. The last dividend was paid in August. Its forward annual dividend yield is 1.6 percent. The company pays out 31.35 percent of its earnings in dividends. No information about dividend reinvestment plan fees was available.
GWW’s quarterly revenue growth is 12.3 percent, and the industry average is 13.3 percent. Its gross margin is 42.62 percent, which compares to an average of 28.9 percent. Its price/earnings to growth ratio is 1.33, which compares the industry average of 0.87. Return on equity is 25.66 percent. Debt to equity is conservative at 18.88. The stock is somewhat expensive at $157.05, which is on the high side of its 52-week range of $116.93 to $165.55, and its price to book value is high at 4.41.
Investors will pay for the company’s track record, but GWW can be a great choice under the right conditions and for the right reasons, among which would be its outstanding dividend payment record.
Walgreen Company (WAG) – This large-cap chain drug store operator has increased dividends for 36 consecutive years. The most recent increase came in August when the company upped its quarterly payout to $0.225 from $0.175. WAG’s forward annual dividend yield is 2.4 percent. Its payout ratio is 35.43 percent. Its dividend reinvestment plan carries no fees, but its stock purchase plan does.
Quarterly revenue growth is slow at 6.8 percent. Gross margin is average at 28.47percent. Price/earnings to growth ratio is 1.2, which is virtually even with the industry average of 1.21. Return on equity is 16.04 percent. Debt to equity is conservative at 16.27.
WAG is currently trading around $35.50, which is near the middle of its 52-week range of $29.46 to $47.11. Its price to book value is 2.24. WAG is an on-the-money purchase that pays off with a tremendous dividend history for income investors.
Wal-Mart Stores Inc. (NYSE:WMT) - This mega-cap Dow 30 company is on a 37-year streak of increasing dividends. The most recent increase came in March when WMT upped its quarterly dividend to $0.365 from the $0.303 it paid quarterly throughout last year. Its forward annual dividend yield is 2.8 percent. WMT pays out 31.06 percent of its earnings in dividends. WMT’s DRIP carries no dividend reinvestment fees but does charge stock purchase fees.
Quarterly revenue growth is slightly below average at 5.4 percent. Its gross margin is 25.17, also slightly below average. Price/earnings to growth ratio is 1.17, which is a little higher than the industry average of 1.09. Return on equity is 23.18 percent, and debt to equity is 77.92.
WMT is currently trading around $50.75. It has fluctuated between $48.31 and $57.90 over the past years. Its price to book value is 2.62. It trades ex-dividend on Dec. 7.
While it is not trading at a deep discount, it is not trading at a premium. Investors who want a stable foundation stock with a consistent and reliable dividend payment record should take a closer look.
Washington Real Estate Investment Trust (NYSE:WRE) – This real estate investment trust invests in equity office, industrial and multi-family real estate in the Washington, DC area. It has increased its dividend for 39 years in a row. For the last four quarters, WRE has paid $0.434 each period, which is up from $0.433 it paid quarterly the previous year. Its forward annual dividend yield is 5.9 percent. WRE’s payout ratio is a staggering 394.2 percent, which was the highest of all the companies that appear on the list of Dividend Champions. There are no fees for WRE’s DRIP.
Its quarterly revenue growth of 11.3 percent is higher than the industry average of 8.2 percent. Its gross margin of 67.48 percent is only slightly below the industry average of 69.82 percent. WRE’s price/earnings to growth ratio of 14.96 far exceeds the industry average of 2.88. Return on equity is 1.93 percent, and debt to equity is 156.07.
Its current price of about $27.30 is toward the lower end of its 52-week trading range of $25.45 to $34.54. Its price to book value is 2.25.
This REIT can bring a lot of performance and diversity to well-informed, experienced investors’ DRIP portfolios.
Weyco Group (NASDAQ:WEYS) – This small-cap manufacturer of men’s shoes has increased its dividend for 29 consecutive years. It has paid $0.16 a quarter for the past six quarters. This is up from $0.15 paid quarterly for the previous four quarters. WEYS’s forward annual dividend yield is 2.9 percent. Its payout ratio is 52.89.
Information about DRIP fees was not available.
WEYS shows quarterly revenue growth of 16.10 percent, which outpaces the industry average of 9.2 percent. Its 39.69 percent gross margin is very close to the industry average of 40.19 percent. Its price/earnings to growth ratio is not available. Return on equity is 8.69 percent, and debt to equity is low at 20.94.
Currently trading around $21.90, WEYS is near the lower end of its 52-week range of $20.82 to $26.80. Its price to book value is 1.43.
Whereas investing in small-cap companies carries risks, this company’s dividend payment history earns consideration of already well-diversified investors with longer timelines.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.