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The Dividend Champions spreadsheet and PDF have been updated through 9/30/11 and are available at here. Note that all references to Champions mean companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. “CCC” refers to the universe of Champions, Contenders, and Challengers.

New Column Added

During September, I added one new column:

Tweed Factor: Now appearing as column BP, I'm including the Tweed Factor, which I outlined in Smackdown XVIII, which can be found here, which compares the sum of the yield and dividend growth rate, compared with the price/earnings ratio. When combined with Norman Tweed's usual 4% yield requirement, this “factor” constitutes the Tweed Model. In addition, I enhanced the column descriptions on the Notes tab to include the Mean (simple average), Standard Deviation, and Tweed Factor.

The month saw one new Challenger, Covidien plc (NYSE:COV) and two additions to the 4-year Appendix – HickoryTech (HTCO) and Philip Morris International (NYSE:PM) - but was primarily marked by several acquisition stories. Two companies – Duncan Energy Partners and National Semiconductor – were deleted after their acquisitions were completed. But two Champions – Clorox (NYSE:CLX) and Family Dollar Stores (NYSE:FDO) – proved to be too elusive as targets, causing hostile acquisition attempts to be dropped by their pursuers. Then, just as the month was coming to a close, the newest Champion, Harleysville Group (NASDAQ:HGIC), agreed to be acquired by Nationwide Mutual for $60 per share, a 90% premium from its market price and more than twice its book value.

Quick Summary

Back in July, I added as page 2 of the Summary tab a table comparing the composite numbers from the latest update to those from the previous month and the end of the previous year. Below that is a summary of this month's activity in terms of companies added, deleted, or promoted:

Quick Summary:

Month End:

9/30/11

Champs

Contdrs

Challgrs

Total

No. of Companies

101

148

101

450

Ave. No. of Years

38.7

15.1

7.1

16.8

Average Price

44.38

40.47

38.83

40.62

Average Yield

3.26

3.41

3.55

3.44

Ave. MR Increase

6.80

7.95

10.97

9.12

Month End:

8/31/11

Champs

Contdrs

Challgrs

Total

No. of Companies

101

147

204

452

Ave. No. of Years

38.6

15.1

7.1

16.8

Average Price

47.56

44.55

41.89

44.03

Average Yield

3.06

3.21

3.30

3.22

Ave. MR Increase

6.70

8.05

10.47

8.91

Year End:

12/31/10

Champs

Contdrs

Challgrs

Total

No. of Companies

98

129

190

417

Ave. No. of Years

38.7

15.7

6.9

NC

Average Price

51.99

45.84

44.65

NC

Average Yield

2.86

2.90

2.90

NC

Ave. MR Increase

6.04

6.63

10.93

NC

MR = Most Recent; NC = Not Calculated

Additions:

Covidien plc (COV) to Challengers

HickoryTech Corp. (HTCO) to Appendix

Philip Morris International (PM) to Appendix

Deletions:

Duncan Energy Partners LP (NYSE:DEP) from Challengers

Getty Realty Corp. (NYSE:GTY) from Contenders

National Semiconductor (NYSE:NSM) from Challengers

Promotions:

Nippon Telegraph & Telephone (NYSE:NTT) from Challenger to Contender

NTT DoCoMo Inc. (NYSE:DCM) from Challenger to Contender


Still Under Consideration

One additional enhancement that I'm still toying with is the creation of a Dividend Growth Model to quantify what SA Contributor David Van Knapp calls the “Dividend Rights” that dividend growth investors acquire by buying stock. This idea is still under development, but I think it would be a good topic of discussion.

So far, I think the best idea is to use the 5-year estimated earnings growth rate as the projected 5-year dividend growth rate, except where there are no estimates (or too few analysts), in which case, I might default to a 3% projection, based on inflation. Any other ideas? As always, I welcome suggestions in the Comment section below.

Disclosure: I am long PM.

Source: 101 Dividend Champions For October 2011