Seeking Alpha
Value, long-term horizon, dividend investing, dividend growth investing
Profile| Send Message|
( followers)  

Dividend Challengers Smackdown XXVI

In the most recent installments of the Smackdown series, I screened the Dividend Champions (which can be found here.) starting with companies that were down in price and, last month, with a new column listing Beta.

(Note that I have separated the Champions, Contenders, and Challengers into different articles to fit more closely into the format preferred by Seeking Alpha. Champions are companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. I use the same Roman numeral for all three articles.)

This month, I decided to start with stocks' most recent (percentage) dividend increase (column L), since many companies seem to have "loosened the purse-strings" as we continue to recover from the "great recession" and I wanted to highlight those that have been the most generous in that regard. So I screened as follows:

Step 1: After eliminating companies that had not increased their dividend in more than a year and those that had agreed to be acquired, I sorted by Most Recent Increase (column L), high to low. Eliminating companies that had percentages below 7% cut the list to 107 companies.

Step 2: Sort the candidates by their Yield (column I), high to low. Dropping those with yields below 2% cut the list to 62 companies.

Step 3: Sort the companies by their 5-year Dividend Growth Rate (column AN), in order to ensure that the remaining candidates had consistent histories of dividend increases. I eliminated any company with a DGR of less than 8% (or "n/a"). Meeting this threshold were 48 companies.

Step 4: Sort the companies by their Price/Earnings ratio (column U), in order to avoid stocks that may be overvalued. Dropping those with P/Es over 15 cut the list to 22 companies, which appear below.

(Note that I've sorted the table back into alphabetical order.)

Company

Ticker

No.

4/30

Div

LY%

TTM

DGR

Name

Symbol

Yrs

Price

Yield

Inc.

P/E

5-yr

Acme United Corp.

(NYSEMKT:ACU)

8

10.55

2.65

16.67

10.99

15.8

Ameriprise Financial

(NYSE:AMP)

8

54.21

2.58

25.00

11.89

14.6

Baxter International

(NYSE:BAX)

5

55.41

2.42

8.06

14.06

16.3

BOK Financial Corp.

(NASDAQ:BOKF)

8

57.03

2.67

15.15

12.82

15.5

Coca-Cola Enterprises

(NYSE:CCE)

5

30.12

2.12

23.08

12.93

16.3

CSX Corp.

(NYSE:CSX)

7

22.29

2.15

38.46

12.74

32.3

Darden Restaurants

(NYSE:DRI)

7

50.08

3.43

34.38

14.60

28.4

Deere & Company

(NYSE:DE)

9

82.36

2.23

12.20

12.24

14.3

Hasbro Inc.

(NASDAQ:HAS)

9

36.74

3.92

20.00

13.51

22.3

Intel Corp.

(NASDAQ:INTC)

8

28.40

2.96

15.89

12.03

14.4

L-3 Communications

(NYSE:LLL)

9

73.54

2.72

11.11

7.98

19.1

Lockheed Martin

(NYSE:LMT)

9

90.54

4.42

33.33

10.97

21.1

Microsoft Corp.

(NASDAQ:MSFT)

7

32.01

2.50

25.00

11.64

12.9

National Healthcare

(NYSEMKT:NHC)

8

45.60

2.63

7.14

11.29

11.9

Raytheon Company

(NYSE:RTN)

8

54.14

3.69

16.28

9.74

12.1

Rogers Commun.

(NYSE:RCI)

7

37.33

4.23

13.26

12.96

81.4

Ryder System

(NYSE:R)

7

48.72

2.38

7.41

14.00

9.2

Safeway Inc.

(NYSE:SWY)

7

20.33

2.85

20.83

11.55

19.7

Sempra Energy

(NYSE:SRE)

9

64.74

3.71

25.00

11.52

9.0

Steris Corp.

(NYSE:STE)

7

31.41

2.16

13.33

14.28

30.4

Thomasville Bancsh.

(OTCQB:THVB)

8

21.60

3.01

8.33

14.79

16.7

Tower Group Inc.

(NASDAQ:TWGP)

5

21.58

3.48

50.00

14.68

47.0

Conclusion

The resulting list includes a wide variety of industries and some familiar names, along with a variety of yields, and the strong dividend growth suggests that these companies possess some excellent income potential, along with price appreciation. As always, please consider this no more than a starting point for more in-depth research.

As an extra step, I'm including one of Chuck Carnevale's F.A.S.T. Graphs for the company that appears to be the most undervalued, as indicated by its price line being in the green-shaded earnings area, just below.

Source: Dividend Challengers Smackdown XXVI