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I have been combing through David Fish's Dividend Champions document looking for stocks that yield more - 50% more - than 10-year Treasuries. Since Treasuries are yielding 2.25%, the requirement for dividend-raising stocks has therefore been a minimum 3.375% yield.

It is a reflection of how low interest rates have gone that we are even having this discussion at all. It has been a fruitful search.

This is the final article in the series. Here we tackle Dividend Challengers, which are stocks that sport dividend increase streaks of 5 to 9 years. There are 195 such stocks, and 51 qualified with yields of greater than 3.375%.

As with the earlier articles, the table below shows:

  • Stock names and tickers.
  • 5-year dividend growth rate (DGR). (I omitted stocks for which a 5-year DGR was not computed on the source document.)
  • Number of consecutive years each stock has increased its dividend payout.
  • Stocks whose most recent increase was significantly lower than its 5-year DGR. (I used my judgment on REITs and MLPs, many of which raise their dividends multiple times per year.)

Bonus: Beneath the main table, you will find a little table and a few sentences summarizing these three studies.

As always, thanks to David Fish for creating and maintaining the Dividend Champions document. It is the best source for dividend growth investors.

Dividend Challengers with Yields 50% Higher than 10-Year Treasuries

Stock

Ticker

Yield %

5-Year DGR

%

Years of Dividend Growth

Notes

Alliance Financial

ALNC

4.20

6.8

6

Most recent increase = 3.3%

Alliance Holdings

AHGP

5.07

39.5

7

MLP

Most recent increase on run-rate considerably under 5-year DGR.

Alliant Energy

LNT

4.22

8.1

9

Most recent increase = 5.9%

American Greetings

AM-OLD

4.00

13.0

8

Most recent increase = 7.1%

AmeriGas

APU

6.74

4.9

8

MLP

Astrazeneca

AZN

6.24

13.9

9

ADR (UK)

Most recent increase = 3.7%

Bar Harbor Bankshares

BHB

3.73

3.9

9

Most recent increase = 1.8%

Birner Dental

BDMS

4.75

11.4

8

Boardwalk Pipeline

BWP

7.80

9.7

7

MLP

Most recent increase on run-rate considerably below 5-year DGR.

Campbell Soup

CPB

3.48

9.4

7

Most recent increase = 5.5%

CenterPoint Energy

CNP

4.16

5.7

7

Most recent increase = 2.5%

China Mobile

CHL

3.84

19.8

6

ADR (CHINA)

Most recent increase = 10.1%

DCP Midstream

DPM

5.34

15.4

7

MLP

Most recent increase on run-rate considerably below 5-year DGR

Delta Natural Gas

DGAS

3.68

2.7

7

Digital Realty Trust

DLR

4.03

20.7

8

REIT

Most recent increase = 7.3%

Dominion Resources

D

4.18

7.4

9

Donegal Group A

DGICA

3.49

8.1

9

Most recent increase = 4.3%

Duke Energy

DUK

4.78

6.2

7

Most recent increase = 2.0%

Empresa Nacional

EOC

3.92

44.5

8

Enbridge Energy

EEP

6.54

2.5

5

MLP

Energy Transfer Equity

ETE

5.75

31.0

7

MLP

Most recent increase = 11.3%

Genesis Energy

GEL

5.69

17.4

9

MLP

Most recent increase on run-rate considerably below 5-year DGR

Greif B

GEF.B

4.80

22.9

8

Most recent increase = 1.6%

Heinz

HNZ

3.64

7.4

8

Hasbro

HAS

4.08

22.3

9

Health Care REIT

HCN

5.44

2.2

5

REIT

Holly Energy

HEP

5.78

5.9

8

MLP

Laclede

LG

4.04

2.7

9

Lockheed Martin

LMT

4.52

21.1

9

Natural Resource

NRP

9.01

6.1

9

MLP

NorthWestern

NWE

4.26

3.0

8

NuStar GP Holdings

NSH

5.86

50.0

7

MLP

Most recent increase on run-rate considerably below 5-year DGR

ONEOK

OKS

4.19

5.3

7

MLP

Portland General Electric

POR

4.30

18.5

6

Most recent increase = 1.9%

Raytheon

RTN

3.40

12.1

7

Reynolds-American

RAI

5.34

9.4

8

Most recent increase = 5.6%

RGC Reources

RGCO

3.93

2.5

9

Rogers Communications

RCI

4.13

81.4

7

ADR (Canada)

Most recent increase = 13.3%

Sempra Energy

SRE

4.05

9.0

9

Senior Housing Properties

SNH

7.10

2.5

8

REIT

StoneMor

STON

9.45

3.9

7

MLP

TECO Energy

TE

4.90

2.3

6

TransAlta

TAC

5.61

5.9

6

Transmontaigne

TLP

7.26

7.8

8

MLP

Most recent increase at run-rate considerably below 5-year DGR

Verizon Communications

VZ

5.25

3.9

7

Waste Management

WM

4.06

9.1

9

Most recent increase = 4.4%

Westar Energy

WR

4.80

5.1

8

Most recent increase = 3.1%

Williams Cos.

WMB

3.46

17.6

9

Most recent increase = 3.5%

Williams Ptnrs.

WPZ

4.90

12.6

8

MLP

Wisconsin Energy

WEC

3.52

17.7

9

Xcel Energy

XEL

3.93

3.2

8

[Source: Dividend Champions, updated 2/29/2012.]

Bonus: This table summarizes statistics from the three studies:

Total Num-ber

Number Quali-fied

Percent Quali-fied

Ave. Yield

Ave.5-Year DGR

Number Reducing
DGR

Percentage Reducing
DGR

Champions

103

18

17%

5.02%

4.2%

12

67%

Contenders

161

55

34%

4.68%

8.8%

31

56%

Challengers

195

51

26%

5.14%

13.5%

30

59%

The only significant pattern that jumps out at me from the table is that the average 5-year DGR climbs significantly as you move from Champions to Challengers. This is not surprising, as many Challengers-just getting started on their dividend-growth streaks-often make large percentage jumps in their early years as they become more confident in their dividend policies and find their "right" levels of dividend payouts.

Please note that in no way are the stocks mentioned in any of the three articles to be considered recommendations. Appearance on these lists does not mean that these are necessarily good stocks for dividend investors. Dividend stocks - like any investments - should be matched to your own situation and goals. Being stocks, they are subject to systematic market risk. The bottom line is to do your own due diligence before investing in anything.

Source: 51 Dividend Challengers With Yields 50% Higher Than 10-Year Treasuries