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Dividend Champions are stocks that have raised their dividends for 25 years in a row. These are companies that have clearly adopted a managed dividend policy and are committed to raising their dividends every year if they possibly can. As of the end of April, there are 105 Champions. The source for this and all data in this article is David Fish's Dividend Champions document (aka CCC) published at the end of April, available here.

In the Periodic Table, the X and Y axes are yield and dividend growth rate (DGR). I continue to tinker with the format to make these tables useful to the highest number of readers. Please note:

  • DGR Time Frame. To be conservative, I use the lowest DGR from among the 1-, 3-, and 5-year DGRs. I did not consider the 10-year DGR. Because the DGRs from the source document are calculated up to the end of 2011, I also considered the most recent increase if there has been one in 2012. This is designated by "12." Thus, "BCR-1" means that the DGR used was the one-year rate, and that it was the lowest of the four choices. "DCI-12" means that the 2012 increase was used, and that it was the lowest of the four choices.
  • Break Points. I think that most people set their low-end yield or DGR requirements with a "whole" number like 3.0% or a "half" number like 2.5%, so I use numbers like that to begin each new level. That said, note that percentage yields and DGRs have been rounded to one decimal place, so a yield like 2.98% has been rounded to 3.0%.
  • Shading. I shade the cells where the least likely stocks of interest reside. Of course, interest will vary from investor to investor and will often be determined by other factors than the two covered here. This is how I chose what to shade:
    1. In general, stocks with low yields or low DGRs are shaded. This means stocks with yields under 2.5% or DGRs under 5%.
    2. High Yield/Low DGR. If a stock's yield is high, which I define as more than 5%, there is no shading even if the DGR is miniscule. With a 5%+ yield, the investor may not care much about the dividend's growth rate.
    3. Low Yield/High DGR. Similarly, some investors may be interested in stocks that have a low current yield coupled with a high rate of dividend growth. For that reason, I did not shade stocks if (1) lowest DGR > 15% and yield > 1.0%; (2) lowest DGR > 10% and yield > 2.0%.
    4. Please use the shadings in the spirit in which they are intended - rough guidelines, not absolute endorsements or criticisms. Do not consider stocks in the white areas to be recommendations. Remember this table covers only two elements - yield and DGR - which while important do not constitute sufficient due diligence for any stock investment.
  • Multiple Increases in a Year. Some companies - especially MLPs and REITs - habitually increase their dividends more than once per year. For these stocks, it could be misleading to place them according to their 2012 increase(s) to date, as the year is not yet complete and more increases may be coming. So their 2012 increase(s) have been disregarded, and their placement is based on the lowest of their 1-, 3-, or 5-year DGRs. They are called out by "&" as the last symbol in their listing. (As it turns out, there were no examples of this in this particular Periodic Table.)
  • Overdue Increases. Some of these stocks have gone more than a year since their last dividend increase. They are still on the CCC list because their total payouts haven't frozen or declined in a calendar year yet, but clearly they are on or are approaching endangered-species territory in terms of their dividend increase streaks. These are called out here by "?" as the last symbol in their listing.

PERIODIC TABLE OF DIVIDEND CHAMPIONS May 8, 2012

Dividend Growth Rate % (Lowest of 1, 3, or 5-Year DGR or 2012’s Increase)

Yield %

0.1 – 4.9

5.0 – 9.9

10.0 – 14.9

15.0 – 19.9

20.0 +

0.1 – 0.4

0.5 – 0.9

BCR-1

DCI-12

BEN-3

HP-5

NDSN-5

1.0 – 1.4

EGN-12

GRC-3

FUL-5

SHW-1

TR-1

CSL-3

CTAS-3

CLC-1

PH-12

SCL-5

FDO-5

RAVN-3

SIAL-12

1.5 – 1.9

NC-3

RLI-1

VFC-3

BF-B-3

TNC-5?

VAL-3

LOW-3

GWW-3

2.0 – 2.4

BRC-1

CBSH-3

MHP-12

PPG-3

TDS-12

ADM-3

CB-12

DOV-3

LANC-3

MKC-1

PNR-1

SWK-5?

TROW-3

BDX-1

HRL-3

TGT-5

2.5 – 2.9

MMM-3

ABM-12

DBD-12

FRT-1

MSA-3

WEYS-1

AFL-1

APD-3

ADP-1

KO-1

CL-12

EV-3

XOM-3

HGIC-1

ITW-3

MDT-1

WMT-12

MCD-1

WAG-5

3.0 – 3.4

AWR-3

BMS-3

BKH-1

CTWS-1

EFSI-3?

MGEE-5

NFG-1

PEP-12

RPM-1

SJW-1

ABT-12

CVX-3

CLX-1

EMR-3

GPC-3

STR-5

3.5 – 3.9

CWT-5

CTBI-1

NWN-1

NUE-1

PNY-12

SON-3

SYY-12

UGI-12

JNJ-1

KMB-12

PG-12

TMP-1

4.0 – 4.4

ED-1

MSEX-1

UVV-12

WGL-1

4.5 – 4.9

BWL.A-3?

CINF-1

HCP-3

UBSI-1

VVC-1

5.0 – 5.4

T-12

LEG-3

MCY-3

MO-1

5.5 – 5.9

WRE-1?

6.0 – 6.4

6.5 +

ORI-1

PBI-12

Comments

Many of the stocks in the white area form a Who's Who of dividend growth investing: Companies like AFLAC (AFL), Coca-Cola (KO), Abbott (ABT), Chevron (CVX), Clorox (CLX), Emerson Electric (EMR), AT&T (T), Johnson & Johnson (JNJ), Kimberly-Clark (KMB), Procter & Gamble (PG), McDonald's (MCD), and Altria (MO) all appear there. Two stocks stand out for the blazing speed with which they have been jacking up their dividends: Target (TGT) and Walgreen (WAG).

Of the 105 Dividend Champions, 34 are in the white area. At the other end of the spectrum, some stocks have stunningly low yields for companies that have been raising their dividends for 25+ years.

A compilation such as this should only be used as a starting point for investing ideas. Complete due diligence would take many more factors into account. Considerations such as high debt, low earnings growth rates, scary valuation metrics, and problems with the business model need to be evaluated. A list such as this does not nearly comprise proper due diligence. Besides the stocks with "?" that have not raised their dividends in over a year, other potential problems appear on the source document or are well known: Harleysville (OTCQB:HARL) is being acquired; McGraw-Hill (MHP) and Abbott (ABT) are splitting themselves up; and Pitney Bowes (PBI) may be in a dying industry.

Develop your own strategy and requirements and stick to them. Don't invest in anything without performing your own due diligence.

Source: Periodic Table Of Dividend Champions