26 'Overdue' Dividend Increases: Streaks To End?

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Includes: ALOT, CIZN, CMLP, CMS, CPB, FCAP, GEF, GES, JCS, KNX, LDR, MUR, PCG, PPL, SAFM, SPH, SRCE, STRA, SXT, TGP, TNC, UCBA, WEYS, WRE
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. The companies below, which I'm showing in date order (within each grouping) this month, still has most of 2012 to extend their streaks by declaring dividend increases and remove themselves from this "probationary" listing.

Dividend Champions (25 or more years):

No.

12/30

%

Pay

Ann.

Payout

TTM

Company

Symbol

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

Weyco Group Inc.

(NASDAQ:WEYS)

29

24.55

2.61

6.67

7/1/10

0.64

48.85

18.74

Eagle Financial Services

(OTCQX:EFSI)

25

16.81

4.28

5.88

11/15/10

0.72

58.06

13.56

Tennant Company

(NYSE:TNC)

39

38.87

1.75

21.43

12/15/10

0.68

34.34

19.63

Washington REIT

(NYSE:WRE)

39

27.35

6.34

0.29

12/30/10

1.74

134.50

21.20

Bowl America Class A

(BWL-A)

39

12.86

4.98

3.23

2/8/11

0.64

220.69

44.34

Click to enlarge

Dividend Contenders (10-24 years):

No.

12/30

%

Pay

Ann.

Payout

TTM

Company

Symbol

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

Inergy LP

(NRGY)

10

24.42

11.55

1.44

8/13/10

2.82

1880.00

162.80

Murphy Oil Corp.

(NYSE:MUR)

15

55.74

1.97

10.00

9/1/10

1.10

18.43

9.34

First Capital Inc.

(NASDAQ:FCAP)

10

18.53

4.10

5.56

9/30/10

0.76

54.29

13.24

1st Source Corp.

(NASDAQ:SRCE)

24

25.33

2.53

6.67

11/15/10

0.64

36.36

14.39

Citizens Holding Co.

(NASDAQ:CIZN)

11

17.52

5.02

4.76

12/31/10

0.88

59.46

11.84

Suburban Propane

(NYSE:SPH)

13

47.61

7.16

0.29

2/8/11

3.41

105.90

14.79

Click to enlarge

Dividend Challengers (5-9 years):

No.

12/30

%

Pay

Ann.

Payout

TTM

Company

Symbol

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

PPL Corp.

(NYSE:PPL)

9

29.42

4.76

1.45

4/1/10

1.40

53.03

11.14

Astro-Med Inc.

(NASDAQ:ALOT)

7

7.61

3.68

16.67

4/2/10

0.28

73.68

20.03

PG&E Corp.

(NYSE:PCG)

6

41.22

4.42

8.33

4/15/10

1.82

71.94

16.29

United Community Banc

(NASDAQ:UCBA)

5

5.53

7.96

10.00

5/28/10

0.44

4400.00

553.00

Knight Transportation

(NYSE:KNX)

7

15.64

1.53

20.00

6/25/10

0.24

34.78

22.67

Greif Inc. A

(NYSE:GEF)

7

45.55

3.69

10.53

7/1/10

1.68

45.28

12.28

Communications Sys.

(NASDAQ:JCS)

8

14.06

4.27

7.14

7/1/10

0.60

41.38

9.70

Sanderson Farms Inc.

(NASDAQ:SAFM)

9

50.13

1.36

13.33

10/19/10

0.68

-11.85

-8.73

CMS Energy Corp.

(NYSE:CMS)

5

22.08

3.80

40.00

11/30/10

0.84

55.26

14.53

Strayer Education Inc.

(NASDAQ:STRA)

8

97.19

4.12

33.33

12/10/10

4.00

42.78

10.39

Guess? Inc.

(NYSE:GES)

6

29.82

2.68

25.00

12/23/10

0.80

27.30

10.18

Landauer Inc.

(NYSE:LDR)

9

51.50

4.27

2.23

1/3/11

2.20

85.27

19.96

Campbell Soup Co.

(NYSE:CPB)

7

33.24

3.49

5.45

1/31/11

1.16

48.13

13.79

Teekay LNG Partners

(NYSE:TGP)

7

33.17

7.60

5.00

2/14/11

2.52

126.00

16.59

Sensient Technologies

(NYSE:SXT)

6

37.90

2.22

5.00

3/1/11

0.84

35.59

16.06

Click to enlarge

Note that companies with Pay Dates that are less than a year old have already declared an unchanged next dividend, so they will become 'overdue' by paying the same rate for a fifth straight quarter. Other companies will join this list 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.

Assessing Risk

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 Sanderson Farms, 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. Companies with shorter streaks may be more likely to allow them to lapse, since they haven't yet established long histories (or "cultures") of rewarding shareholders with growing dividends. As always, comments and suggestions are welcome below.

Disclosure: I am long TNC.