Dividend Challengers (And Near-Challengers): 38 Increases Expected In The Next 10 Weeks

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Includes: AES, APOG, BCPC, BMY, CFI, COR, CUBE, DEI, DFT, DIS, EMN, ENSG, EPR, FCCO, FIBK, GABC, HASI, HEI, HI, KALU, LMNR, LZB, MA, MAA, MORN, MRK, OLP, PNM, RJF, SBY, SLG, STAG, STBZ, TTC, WAFD, WDFC, WDR, ZTS
by: David Fish

Summary

Hillenbrand, Ensign Group, and HEICO poised to become Contenders.

Diversification potential high.

January lull in strong trend of increases.

In compiling the Dividend Champions list (found here), I get to see which companies are nearing the anniversaries of their previous dividend increases. Since most of these firms raise their payout about the same time every year, I can say with some confidence that they are likely to do so again. I have separated the Champions (25 or more years of higher dividends), Contenders (10-24 years), and Challengers (5-9 years) into distinct groupings, so please look for the other articles, which I hope will be published about the same time. Note that "CCC" refers to the combination of Champions, Contenders, and Challengers.

Dividend Growth Surge to be Interrupted by January Lull

The Dividend Growth surge that started in September will carry through the first quarter of 2017, but not before a brief lull in January, when fewer companies typically raise their dividends. The number of announcements for all Champions, Contenders, Challengers, and Near-Challengers expected in the next 11 weeks has dropped to 70 from exactly 100 a month ago. While the focus has also been on the typical fourth-quarter Freezes (that have mostly taken place), the strong companies continue to lengthen their already impressive streaks of annual increases.

The table below coincides with the usual "forward look" of about 11 weeks for this article. Based on last year's announcements, I'm expecting the following companies to announce dividend increases between now and the anniversary of the ex-dividend date of their previous increase:

Dividend Challengers (5-9 years):

Company

Ticker

No.

10/31

Div.

MR%

LY

Ann.

DGR

Name

Symbol

Yrs

Price

Yield

Inc.

Ex-Div

Div.

5-yr

Eastman Chemical Co.

(NYSE:EMN)

6

71.91

2.56

15.00

12/10/15

1.84

12.7

Walt Disney Company

(NYSE:DIS)

6

92.69

1.53

7.58

12/10/15

1.42

31.0

Merck & Company

(NYSE:MRK)

5

58.72

3.13

2.22

12/11/15

1.84

3.4

Hillenbrand Inc.

(NYSE:HI)

9

30.35

2.67

1.25

12/15/15

0.81

1.3

Toro Company

(NYSE:TTC)

7

47.88

1.25

20.00

12/18/15

0.60

22.7

One Liberty Properties Inc.

(NYSE:OLP)

6

23.56

6.96

5.13

12/21/15

1.64

6.9

Balchem Inc.

(NASDAQ:BCPC)

7

75.90

0.45

13.33

12/23/15

0.34

22.2

Limoneira Company

(NASDAQ:LMNR)

8

19.69

1.02

11.11

12/23/15

0.20

23.6

Douglas Emmett Inc.

(NYSE:DEI)

6

36.50

2.41

4.76

12/28/15

0.88

16.0

DuPont Fabros Technology

(NYSE:DFT)

7

40.81

4.61

11.90

12/28/15

1.88

33.2

CoreSite Realty Corp.

(NYSE:COR)

6

73.74

2.87

26.19

12/29/15

2.12

n/a

Ensign Group Inc.

(NASDAQ:ENSG)

9

18.47

0.87

6.67

12/29/15

0.16

21.5

Bristol-Myers Squibb Co.

(NYSE:BMY)

7

50.91

2.99

2.70

12/30/15

1.52

2.9

CubeSmart

(NYSE:CUBE)

6

26.07

3.22

31.25

12/30/15

0.84

45.0

Culp Inc.

(NYSE:CFI)

5

28.00

1.00

16.67

12/30/15

0.28

n/a

HEICO Corp.

(NYSE:HEI)

9

67.56

0.24

14.29

12/30/15

0.16

20.4

SL Green Realty Corp.

(NYSE:SLG)

5

98.22

2.93

20.00

12/30/15

2.88

43.1

MasterCard Inc.

(NYSE:MA)

5

107.02

0.71

18.75

1/6/16

0.76

60.5

Morningstar Inc.

(NASDAQ:MORN)

6

70.63

1.25

15.79

1/6/16

0.88

n/a

Waddell & Reed Financial

(NYSE:WDR)

6

15.72

11.70

6.98

1/7/16

1.84

17.7

Mid-America Apt. Comm.

(NYSE:MAA)

6

92.75

3.54

6.49

1/13/16

3.28

4.6

WD-40 Company

(NASDAQ:WDFC)

7

106.63

1.58

10.53

1/13/16

1.68

8.3

Kaiser Aluminum Corp.

(NASDAQ:KALU)

5

72.49

2.48

12.50

1/21/16

1.80

10.8

PNM Resources Inc.

(NYSE:PNM)

5

32.85

2.68

10.00

1/21/16

0.88

9.9

EPR Properties

(NYSE:EPR)

6

72.72

5.28

5.79

1/27/16

3.84

6.8

STAG Industrial Inc.

(NYSE:STAG)

6

23.07

6.02

0.72

1/27/16

1.39

n/a

First Interstate BancSystem

(NASDAQ:FIBK)

7

31.90

2.76

10.00

1/28/16

0.88

18.8

Washington Federal Inc.

(NASDAQ:WAFD)

6

27.25

2.06

7.69

1/28/16

0.56

21.1

AES Corp.

(NYSE:AES)

5

11.77

3.74

10.00

1/29/16

0.44

n/a

Apogee Enterprises Inc.

(NASDAQ:APOG)

5

40.75

1.23

13.64

1/29/16

0.50

6.2

Click to enlarge

MR=Most Recent; LY=Last Year; DGR=Dividend Growth Rate through 2015

In addition, there are a number of Near-Challengers that are on schedule to record their fifth year of increases during this period:

Company

Ticker

No.

LY

Name

Symbol

Yrs

Ex-Div

La-Z-Boy Inc.

(NYSE:LZB)

4

11/25/15

State Bank Financial Corp.

(NASDAQ:STBZ)

4

12/10/15

Silver Bay Realty Trust Corp.

(NYSE:SBY)

4

12/23/15

Hannon Armstrong Sustain.

(NYSE:HASI)

4

12/28/15

Raymond James Financial

(NYSE:RJF)

4

12/30/15

Zoetis Inc.

(NYSE:ZTS)

4

1/19/16

German American Bancorp

(NASDAQ:GABC)

4

1/27/16

First Community Corp.

(NASDAQ:FCCO)

4

1/28/16

Click to enlarge

Not all of the above companies will meet the strict standards of every investor, but some may be appropriate for portfolio diversification. Potential investors should do more research before committing funds.

Every Picture Tells a Story

As a bonus, I'm inserting one of Chuck Carnevale's F.A.S.T. Graphs below, highlighting one of the companies listed above. When the stock's price line has moved into the green area, it indicates that the stock is undervalued in relation to its earnings. I'm attaching the chart below.

Click to enlarge

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.