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In compiling the Dividend Champions list (found here: http://dripinvesting.org/Tools/Tools.asp ) I get to see which companies are nearing the anniversaries of their previous dividend increases. Most of these firms raise their payout about the same time every year, but some companies go longer before boosting their dividends, and this can raise concerns about their streaks of increases.

Dividends in Doubt Series

This monthly series lists companies whose latest dividend increases might be considered "overdue" because it has been more than a year since the previous increase, a possible sign that their streaks of increases are in danger. Some firms regularly go more than a year between increases, so this is only an "early warning" sign that some of them may warrant concern. This month, I've sorted the Champions, Contenders, and Challengers together by date of their most recent increase, listing companies that have gone the longest first. The 19 companies that last increased their dividend prior to 4/1/11 (Pay Date) stand to be deleted if they fail to pay an increased dividend by the end of 2012. The remaining companies have a little more leeway, since their latest increases came late enough in 2011 that this year's total payments will exceed last year's (as long as no reduction is announced). We're getting close to the Dividend-Streak "Death Watch," when companies next announcement relates to their fourth-quarter payment, when an unchanged (or lower) dividend will result in deletion. Any increase by a company will "rescue" that company from this "probationary" listing. (Note that I've also included the column that shows the month in which each company ends its fiscal year. Some firms that have a streak based on that fiscal year may have a little breathing room beyond December in order to extend those streaks.)

 

 

Company

Stock

No.

6/29

Div.

MR%

Pay

Ann.

Payout

TTM

FYE

Name

Symbol

Yrs

Price

Yield

Inc.

Date

Div.

%Ratio

P/E

Mo.

Astro-Med Inc.

(ALOT)

7

7.96

3.52

16.67

4/2/10

0.28

59.57

16.94

1

PG&E Corp.

(PCG)

6

45.27

4.02

8.33

4/15/10

1.82

84.26

20.96

12

United Community Banc

(UCBA)

5

5.60

7.86

10.00

5/28/10

0.44

137.50

17.50

6

Knight Transportation

(KNX)

7

15.99

1.50

20.00

6/25/10

0.24

32.00

21.32

12

Greif Inc. A

(GEF)

7

41.00

4.10

10.53

7/1/10

1.68

55.08

13.44

10

Murphy Oil Corp.

(MUR)

15

50.29

2.19

10.00

9/1/10

1.10

27.03

12.36

12

First Capital Inc.

(FCAP)

10

20.77

3.66

5.56

9/30/10

0.76

52.78

14.42

12

Sanderson Farms Inc.

(SAFM)

9

45.82

1.48

13.33

10/19/10

0.68

n/a

n/a

10

Eagle Financial Svcs

(OTCQB:EFSI)

25

20.10

3.58

5.88

11/15/10

0.72

48.98

13.67

12

Strayer Education Inc.

(STRA)

8

109.02

3.67

33.33

12/10/10

4.00

49.32

13.44

12

Tennant Company

(TNC)

39

39.95

1.70

21.43

12/15/10

0.68

40.72

23.92

12

Guess? Inc.

(GES)

6

30.37

2.63

25.00

12/23/10

0.80

29.52

11.21

1

Citizens Holding Co.

(CIZN)

11

19.00

4.63

4.76

12/31/10

0.88

61.54

13.29

12

Landauer Inc.

(LDR)

9

57.33

3.84

2.23

1/3/11

2.20

91.67

23.89

9

Farmers and Merchants

(OTCQB:FMAO)

8

21.25

3.58

5.56

1/20/11

0.76

40.43

11.30

12

Campbell Soup Co.

(CPB)

7

33.38

3.48

5.45

1/31/11

1.16

50.22

14.45

7

Bowl America Class A

(BWL.A)

40

12.55

5.10

3.23

2/8/11

0.64

206.45

40.48

6

Lake Shore Bancorp

(LSBK)

6

10.27

2.73

16.67

2/22/11

0.28

42.42

15.56

12

Avon Products Inc.

(AVP)

22

16.21

5.68

4.55

3/1/11

0.92

102.22

18.01

12

Greif Inc. B

(GEF.B)

8

44.97

5.60

1.61

4/1/11

2.52

82.62

14.74

10

American Greetings

(AM-OLD)

8

14.62

4.10

7.14

4/21/11

0.60

45.80

11.16

2

StoneMor Partners LP

(STON)

7

25.92

9.03

1.74

5/16/11

2.34

n/a

n/a

12

American States Water

(AWR)

57

39.58

2.83

7.69

6/1/11

1.12

46.86

16.56

12

Columbia Sportswear

(COLM)

6

53.62

1.64

10.00

6/2/11

0.88

31.65

19.29

12

Tower Group Inc.

(TWGP)

5

20.87

3.59

50.00

6/24/11

0.75

54.35

15.12

12

First Financial Corp.

(THFF)

24

29.00

3.24

2.17

7/1/11

0.94

34.56

10.66

12

Birner Dental Mgmt

(BDMS)

8

16.75

5.25

10.00

7/8/11

0.88

108.64

20.68

12

Ecology & Environment

(EEI)

6

11.50

4.17

9.09

8/5/11

0.48

55.81

13.37

7

Tompkins Financial

(TMP)

25

37.68

3.82

5.88

8/15/11

1.44

46.60

12.19

12

Energy Transfer Eq. LP

(ETE)

7

41.02

6.09

11.61

8/19/11

2.50

145.35

23.85

12

AptarGroup Inc.

(ATR)

18

51.05

1.72

22.22

8/23/11

0.88

33.08

19.19

12

National Healthcare

(NHC)

8

45.23

2.65

7.14

9/1/11

1.20

32.88

12.39

12

MR=Most Recent; TTM=Trailing Twelve Months; FYE=Fiscal Year End

Note that companies with Pay Dates that are less than a year old have already declared an unchanged next dividend, so they will become 'overdue' with the next dividend payment. Other companies will join this list as they pass the anniversaries of their previous increases without hiking their dividends. Since the determinant for inclusion revolves around the Dividend Payment, that Date is listed above, along with the Payout Ratio and the Price/Earnings ratio, two key indicators of a company's ability to increase the payout.

Assessing Risk

Some companies, such as REITs (Real Estate Investment Trusts) and MLPs (Master Limited Partnerships), are structured to pay out more than earnings per share, so we can't easily tell much from seemingly high payout ratios or P/Es. Some alarming Payout Ratios and/or P/Es, like those at Sanderson Farms, might suggest great risk, but a look ahead at the estimated earnings per share for this year or next might provide a bit of comfort. Companies with shorter streaks may be more likely to allow them to lapse, since they haven't yet established long histories (or "cultures") of rewarding shareholders with growing dividends. As always, comments and suggestions are welcome below.

Source: 32 'Overdue' Dividend Increases: Streaks In Doubt