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.
- On Monday March 26, I published "18 Dividend Champions with Yields 50% Higher than 10-Year Treasuries." Dividend Champions are stocks that have increased their dividends for 25 or more consecutive years. There are 103 Champions at the moment, and 18 of them qualified.
- On Wednesday March 28, I published "55 Dividend Contenders with Yields 50% Higher than 10-Year Treasuries." Dividend Contenders are stocks with dividend increase streaks of 10 to 24 years. Of the 161 Challengers, 55 made the cut with yields of 3.375% or more.
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 | 4.20 | 6.8 | 6 | Most recent increase = 3.3% | |
Alliance Holdings | 5.07 | 39.5 | 7 | MLP Most recent increase on run-rate considerably under 5-year DGR. | |
Alliant Energy | 4.22 | 8.1 | 9 | Most recent increase = 5.9% | |
American Greetings | 4.00 | 13.0 | 8 | Most recent increase = 7.1% | |
AmeriGas | 6.74 | 4.9 | 8 | MLP | |
Astrazeneca | 6.24 | 13.9 | 9 | ADR (UK) Most recent increase = 3.7% | |
Bar Harbor Bankshares | 3.73 | 3.9 | 9 | Most recent increase = 1.8% | |
Birner Dental | 4.75 | 11.4 | 8 | ||
Boardwalk Pipeline | 7.80 | 9.7 | 7 | MLP Most recent increase on run-rate considerably below 5-year DGR. | |
Campbell Soup | 3.48 | 9.4 | 7 | Most recent increase = 5.5% | |
CenterPoint Energy | 4.16 | 5.7 | 7 | Most recent increase = 2.5% | |
China Mobile | 3.84 | 19.8 | 6 | ADR (CHINA) Most recent increase = 10.1% | |
DCP Midstream | 5.34 | 15.4 | 7 | MLP Most recent increase on run-rate considerably below 5-year DGR | |
Delta Natural Gas | 3.68 | 2.7 | 7 | ||
Digital Realty Trust | 4.03 | 20.7 | 8 | REIT Most recent increase = 7.3% | |
Dominion Resources | 4.18 | 7.4 | 9 | ||
Donegal Group A | 3.49 | 8.1 | 9 | Most recent increase = 4.3% | |
Duke Energy | 4.78 | 6.2 | 7 | Most recent increase = 2.0% | |
Empresa Nacional | 3.92 | 44.5 | 8 | ||
Enbridge Energy | 6.54 | 2.5 | 5 | MLP | |
Energy Transfer Equity | 5.75 | 31.0 | 7 | MLP Most recent increase = 11.3% | |
Genesis Energy | 5.69 | 17.4 | 9 | MLP Most recent increase on run-rate considerably below 5-year DGR | |
Greif B | 4.80 | 22.9 | 8 | Most recent increase = 1.6% | |
Heinz | 3.64 | 7.4 | 8 | ||
Hasbro | 4.08 | 22.3 | 9 | ||
Health Care REIT | 5.44 | 2.2 | 5 | REIT | |
Holly Energy | 5.78 | 5.9 | 8 | MLP | |
Laclede | 4.04 | 2.7 | 9 | ||
Lockheed Martin | 4.52 | 21.1 | 9 | ||
Natural Resource | 9.01 | 6.1 | 9 | MLP | |
NorthWestern | 4.26 | 3.0 | 8 | ||
NuStar GP Holdings | 5.86 | 50.0 | 7 | MLP Most recent increase on run-rate considerably below 5-year DGR | |
ONEOK | 4.19 | 5.3 | 7 | MLP | |
Portland General Electric | 4.30 | 18.5 | 6 | Most recent increase = 1.9% | |
Raytheon | 3.40 | 12.1 | 7 | ||
Reynolds-American | 5.34 | 9.4 | 8 | Most recent increase = 5.6% | |
RGC Reources | 3.93 | 2.5 | 9 | ||
Rogers Communications | 4.13 | 81.4 | 7 | ADR (Canada) Most recent increase = 13.3% | |
Sempra Energy | 4.05 | 9.0 | 9 | ||
Senior Housing Properties | 7.10 | 2.5 | 8 | REIT | |
StoneMor | 9.45 | 3.9 | 7 | MLP | |
TECO Energy | 4.90 | 2.3 | 6 | ||
TransAlta | 5.61 | 5.9 | 6 | ||
Transmontaigne | 7.26 | 7.8 | 8 | MLP Most recent increase at run-rate considerably below 5-year DGR | |
Verizon Communications | 5.25 | 3.9 | 7 | ||
Waste Management | 4.06 | 9.1 | 9 | Most recent increase = 4.4% | |
Westar Energy | 4.80 | 5.1 | 8 | Most recent increase = 3.1% | |
Williams Cos. | 3.46 | 17.6 | 9 | Most recent increase = 3.5% | |
Williams Ptnrs. | 4.90 | 12.6 | 8 | MLP | |
Wisconsin Energy | 3.52 | 17.7 | 9 | ||
Xcel Energy | 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 | Percentage Reducing | |
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.
