The cast for dividend growth is well known: compound interest is great but having a growing "interest" stream is even better. But there is another kind of growth we can get from dividend companies. What if each dividend increase was bigger than the previous increase?
This would mean that the dividend growth would be, in mathematical terms, an exponential function. Or in grade-school terms: the dividend is getting bigger and bigger, faster and faster.
In a previous article (read it here), I made the somewhat depressing point that the dividend growth rate for U.S. companies has been dropping for the last few years, so I didn't think it was likely any company would have increased their dividend growth rates for ten straight years.
Well, my lack of faith is truly shameful as it turns out there were a full 23 U.S.-listed stocks that had grown their dividends exponentially this decade! I point out a few of my favourites and then present the entire list for your future research.
AmeriGas Partners LP (APU)
AmeriGas Partners, L.P. is one of the largest retail propane distributors in the United States. The company serves residential, commercial, industrial, agricultural and motor fuel customers.
I have always liked the slow but steady returns from pipelines companies and AmeriGas Partners is one of the best. This smallcap MLP has solidly outperofmred the Alerian Index and has been raising dividends for seven years and now boasts a juicy 7% yield.
Coca-Cola FEMSA S.A.B. de C.V. (KOF)
Coca-Cola FEMSA S.A.B. de C.V., which you can simply call Latin-Coke, produces, markets and distributes soft drinks througout Latin America. Now, scroll down to the table that shows KOFs ten-year dividend history. Have you ever seen such beautiful dividend growth before? Even with that staggering dividend growth, KOF's payout ratio is only 46% and considering projected EPS growth is in the double digits, this stock has a lot more room to grow thier yield. KOF is a direct play on the emerging market consumer and is one of my strongest conviction picks.
Colgate-Palmolive Co (CL)
After that sizzling hot Latin stock, let's cool things off with a boring ol' consumer goods company. Colgate-Palmolive manufactures and sells a wide range of consumer products under leading brand names around the world. Dividend growth investors will know this stock as one of the stalwards of the dividend world, having raised their dividend for an impressive 48 straight years. What is even more impressive is the fact that their dividend growth rates have been increasing for the last ten years! Imagine, a nice defensive cash generating company that keeps increasing their divdends by more and more each year. If Europe is getting you (or your portfolio) down, strongly consider this company as part of the remedy!
The full table:
Company | Ticker | Industry | Div Yield | 1Y DGR | 3Y DGR | 5Y DGR | 10Y DGR |
AmeriGas Partners LP | APU | MLP-Propane | 7.0 | 5.1 | 4.9 | 4.5 | 2.4 |
DPL Inc. | DPL | Utility-Electric/Gas | 4.4 | 6.1 | 5.2 | 4.7 | 2.6 |
Delta Natural Gas | DGAS | Utility-Gas | 4.3 | 3.1 | 2.6 | 2.2 | 1.6 |
Avista Corp. | AVA | Utility-Electric/Gas | 4.3 | 23.5 | 18.9 | 12.9 | 7.6 |
UGI Corp. | UGI | Utility-Electric/Gas | 3.6 | 14.6 | 7.6 | 6.7 | 5.9 |
Wisconsin Energy | WEC | Utility-Elec/Gas | 3.2 | 18.5 | 17.0 | 12.7 | 1.6 |
American States Water | AWR | Utility-Water | 3.2 | 3.0 | 2.9 | 2.9 | 2.0 |
General Mills | GIS | Food Processing | 3.2 | 16.7 | 11.4 | 10.4 | 6.7 |
Bob Evans Farms | BOBE | Restaurants | 3.0 | 15.2 | 10.7 | 9.6 | 7.8 |
Enbridge Inc. | ENB | Oil & Gas | 2.8 | 26.6 | 12.5 | 11.8 | 9.8 |
Walgreen Company | WAG | Retail-Drugstores | 2.7 | 25.0 | 21.9 | 21.6 | 16.5 |
Southwest Gas Corp. | SWX | Utility-Natural Gas | 2.7 | 5.3 | 5.1 | 3.8 | 1.9 |
South Jersey Industries | SJI | Utility-Gas | 2.6 | 13.9 | 11.4 | 9.8 | 6.4 |
Colgate-Palmolive Co. | CL | Personal Products | 2.6 | 18.0 | 13.2 | 12.8 | 12.4 |
Coca-Cola FEMSA S.A.B. de C.V. | KOF | Beverages-Non-alcoholic | 2.2 | 127.6 | 42.8 | 30.6 | 22.3 |
Tennant Company | TNC | Machinery | 1.8 | 11.3 | 7.1 | 6.0 | 4.2 |
Novo Nordisk A/S | NVO | Drugs | 1.7 | 36.1 | 32.2 | 27.4 | 20.9 |
Church & Dwight | CHD | Consumer Products | 1.5 | 34.8 | 27.4 | 20.9 | 12.8 |
Stepan Company | SCL | Cleaning Products | 1.4 | 8.9 | 5.9 | 4.5 | 4.2 |
Imperial Oil Ltd. | IMO | Oil & Gas | 1.1 | 11.8 | 6.1 | 5.9 | 4.9 |
Ross Stores Inc. | ROST | Retail-Apparel | 1.0 | 45.5 | 28.7 | 25.0 | 23.7 |
Roper Industries Inc. | ROP | Industrial Equipment | 0.5 | 15.2 | 13.5 | 12.6 | 10.5 |
Helmerich & Payne Inc. | HP | Oil & Gas | 0.5 | 10.0 | 6.9 | 5.8 | 4.3 |
