10 Dividend Streaks On Death Watch, 9 In Danger

|
 |  Includes: ALOT, CMLP, CTL, EFSI, EGAS, FCAP, FIX, GEF, ITT, JCS, KNX, MSM, MUR, NRPI, OFC, PCG, PEG, PPDI, PPL, RDS.A, RDS.B, SAFM, SRCE, UBSI, UCBA, UHT, VIVO, WABC, WEYS
by: David Fish

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 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 near 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 ensure that this year's payout will be higher (barring an actual decrease).

Red Flag

No.

9/30

%

Pay

Ann.

Payout

TTM

Company

Sym

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

Gas Natural Inc.

(NYSEMKT:EGAS)

5

10.99

4.91

12.50

4/30/09

0.54

62.79

12.78

Natural Resource Part.

(NYSE:NRP)

8

25.36

8.52

0.93

5/14/09

2.16

121.35

14.25

Royal Dutch Shell plc A

(NYSE:RDS.A)

5

61.52

5.46

5.00

6/10/09

3.36

37.46

6.86

Royal Dutch Shell plc B

(NYSE:RDS.B)

5

62.05

5.41

5.00

6/10/09

3.36

37.46

6.92

Comfort Systems USA

(NYSE:FIX)

6

8.32

2.40

11.11

9/21/09

0.20

80.00

33.28

United Bankshares Inc.

(NASDAQ:UBSI)

37

20.09

5.97

3.45

1/4/10

1.20

72.73

12.18

Meridian Bioscience Inc.

(NASDAQ:VIVO)

19

15.74

4.83

11.76

2/11/10

0.76

122.58

25.39

Westamerica Bancorp

(NASDAQ:WABC)

19

38.32

3.76

2.86

2/13/10

1.44

46.15

12.28

CenturyLink Inc.

(NYSE:CTL)

37

33.12

8.76

3.57

3/22/10

2.90

142.86

16.32

Public Service Enterprise

(NYSE:PEG)

7

33.37

4.11

3.01

3/31/10

1.37

40.90

9.96

Yellow Flag

No.

9/30

%

Pay

Ann.

Payout

TTM

Company

Sym

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

ITT Corp.

(NYSE:ITT)

8

42.00

2.38

17.65

4/1/10

1.00

26.32

11.05

PPL Corp.

(NYSE:PPL)

9

28.54

4.91

1.45

4/1/10

1.40

59.07

12.04

Astro-Med Inc.

(NASDAQ:ALOT)

7

7.00

4.00

16.67

4/2/10

0.28

73.68

18.42

PG&E Corp.

(NYSE:PCG)

6

42.30

4.30

8.33

4/15/10

1.82

67.41

15.67

United Community Banc

(NASDAQ:UCBA)

5

5.90

7.46

10.00

5/28/10

0.44

n/a

n/a

Knight Transportation Inc.

(NYSE:KNX)

7

13.31

1.80

20.00

6/25/10

0.24

35.29

19.57

Pharmaceutical Product

(NASDAQ:PPDI)

6

25.66

2.34

5.71

6/29/10

0.60

41.96

17.94

Universal Health Realty

(NYSE:UHT)

22

33.61

7.20

0.83

6/30/10

2.42

198.36

27.55

Weyco Group Inc.

(NASDAQ:WEYS)

29

22.30

2.87

6.67

7/1/10

0.64

52.89

18.43

Greif Inc. A

(NYSE:GEF)

7

42.89

3.92

10.53

7/1/10

1.68

34.36

8.77

Communications Sys.

(NASDAQ:JCS)

8

13.00

4.62

7.14

7/1/10

0.60

40.54

8.78

MSC Industrial Direct

(NYSE:MSM)

8

56.46

1.56

10.00

7/27/10

0.88

27.50

17.64

Inergy LP

(NRGY)

10

25.02

11.27

1.44

8/13/10

2.82

343.90

30.51

Murphy Oil Corp.

(NYSE:MUR)

15

44.16

2.49

10.00

9/1/10

1.10

22.31

8.96

First Capital Inc.

(NASDAQ:FCAP)

10

18.50

4.11

5.56

9/30/10

0.76

56.72

13.81

Corporate Office Prop.

(NYSE:OFC)

13

21.78

7.58

5.10

10/15/10

1.65

-275.00

-36.30

Sanderson Farms Inc.

(NASDAQ:SAFM)

9

47.50

1.43

13.33

10/19/10

0.68

-25.66

-17.92

Eagle Financial Services

(OTCQX:EFSI)

25

16.10

4.47

5.88

11/15/10

0.72

77.42

17.31

1st Source Corp.

(NASDAQ:SRCE)

21

20.83

3.07

6.67

11/15/10

0.64

38.10

12.40

Click to enlarge

Other companies will 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.

Note that ITT is about to split into three companies, so its survival on the list of dividend increasers will depend on whether its adjusted (previous) dividend is exceeded by its next (post-spin-off) declaration. PPDI has agreed to be acquired, so I expect its removal from the list to take place without another dividend increase.

Assessing Risk

Some companies, such as Real Estate Investment Trusts 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 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.

Disclosure: I am long CTL, ITT.