Seeking Alpha

David Fish's  Instablog

David Fish
  • on Dividend Quick Picks & Lists
Send Message
Dave Fish is Executive Editor for The Moneypaper and co-manager (since 1999) of the MP 63 Fund (Symbol: DRIPX), a fund that invests exclusively in companies that offer Direct Investment (or Dividend Reinvestment) Plans. He is also the author of the U.S. Dividend Champions spreadsheet (and PDF),... More
My company:
The Moneypaper
My blog:
Daily Trade Alert Author Page
My book:
The Moneypaper's Guide to Direct Investment Plans
View David Fish's Instablogs on:
  • Dividend Champions, New and Improved

    The Dividend Champions spreadsheet has been updated through 9/30/10

    To download the latest version of the U.S. Dividend Champions spreadsheet or PDF, go here: http://dripinvesting.org/Tools/Tools.asp

    During the past month, I have again been working on some significant changes to improve the Dividend Champions listing, and those include expansion of the Champions and Contenders tabs to include fundamental data obtained from Yahoo! Finance and the addition of two new tabs to segregate Summary totals from the Champions and Contenders (with charts) and Changes that are company-specific, rather than Revisions to the spreadsheet design. I'll discuss this month's changes in order of the tabs (from left to right).


     

    Dividend Champions and Contenders Columns Added

    I've added several new columns on the right side of these listings to reflect fundamental data that is available at Yahoo! Finance, and added columns with additional calculations that may be of interest. Data from Yahoo! includes the following:

    TTM EPS (or trailing twelve months Earnings Per Share). This is generally the total of the most recently reported four quarters. Since most companies have yet to report third-quarter earnings, this number is currently the sum of the last two quarters of 2009 and the first two quarters of 2010.

    PEG Ratio (P/E Ratio divided by Growth Rate). Yahoo explains that this number uses the 5-year future growth rate, so the divisor of this ratio is composed of estimates.

    TTM P/Sales (trailing twelve months Price/Sales Ratio). Divides the current price by the total sales in the past twelve months.

    MRQ P/Book (Most Recent Quarter Price/Book Ratio). Divides the current price by the book value per share as reported in quarterly filings.

    TY Est EPS (This Year Estimated Earnings Per Share). Currently adds together 2010 actual earnings with estimates for the remaining quarters.

    NY Est EPS (Next Year Estimated Earnings Per Share). Analysts' consensus for the next fiscal year's earnings per share.

    Market Cap (Market Capitalization). Represents the number of shares outstanding multiplied by the market price. Note that I wasn't able to properly “parse” this data, so sorting based on this column will not be very successful. I had better luck separating the 52-week High and Low.

    52-week Low is the lowest closing price for the stock in the past year.

    52-week High is the highest closing price of the stock in the past year.

    In addition to this data, I have inserted columns to calculate the P/E (price/earnings) ratio, based on the current price and the trailing twelve months earnings; the Payout Ratio, based on the TTM EPS and the current dividend rate; Next Year vs. This Year Estimated EPS Growth; and the current price's percentages above the 52-week Low and below the 52-week High. I also “locked titles” so that the header rows and left-most columns (with company name and symbol) always stay in view, which might make scrolling to the right and back a bit more comfortable.

    You might notice that some data is not included, such as the companies' Cash and Debt totals and debt-to-capitalization ratio. These are simply not available from Yahoo!, hence their absence. The other important thing to remember is that all of this data has to be taken with a grain of salt. For example, any earnings per share number may or may not have unusual or one-time items, so each ratio that includes it has the prospect of being distorted. The same holds true of estimates in general and, of course, the timing of earnings announcements may have an effect on summary earnings totals. In addition, certain companies may have exaggerated numbers, such as real estate investment trusts (REITs), which typically are judged by Funds From Operation (FFO), not earnings per share. So the gist of all this is that I need to remind everyone that the listing should only be considered a starting point for more in-depth analysis.

    Only one new company joined the Champions listing this month, after having graduated from the Contenders list on the occasion of its 25th year of dividend increases. That was Brady Corp. (BRC), a provider of identification and security products. The number of Champions remained the same, due to the deletion of BancorpSouth (BXS), which announced a fourth-quarter dividend that was unchanged and resulted in the total 2010 payout being equal to that of 2009. I have also deleted seven Contenders and 15 Challengers since the last update (August 31) because of the same reason and expect to delete more between now and the end of the year,as other companies fail to extend their streaks. Familiar companies that were recently deleted include Progress Energy (PGN), Foot Locker (FL), and Kraft Foods (KFT).


     

    Two New Tabs Added

    In order to make the Champions and Contenders tabs more user- and printer-friendly, I moved the summary totals (of prior months' totals) to a new Summary tab. On that tab, I then added a page of charts that show the trends for Number of Companies, Average Price, Average Yield, and Average Percentage (of the latest increase). A second new tab was added to show company-specific changes, which were removed from the Revisions tab. On the Changes tab, there is now a table for companies that have been deleted, including the reason and date of deletion. Below that is a text-based chronological listing of companies that were added or modified in some way. Unnecessary lines were removed from the Revisions tab, which is now intended only for listing spreadsheet or PDF modifications.


     

    Final Words

    I believe that I have now completed most of the major revisions that I had planned. One possible change that is under consideration (and was mentioned by a commenter) would entail moving the Dividend History data to the Champions and Contenders tabs, locating those columns to the right of existing ones. However, I'm not sure whether users would be comfortable with that arrangement, which might require a lot of scrolling horizontally, so please comment with any opinions – pro or con – about whether that changes would be welcome.

    Between now and year-end, I will focus on two main tasks: Deleting companies that fail to extend their streaks, and Adding a column for Total Dividends Paid in 2010. The latter may not appear until November or December and would not replace 2009 in the calculation of 5- and 10-year DGRs until the December 31 update. As to the companies with streaks that are on “death watch,” there are five Champions, 10 Contenders, and 19 Challengers that may be deleted. Taking into account one Contender, McCormick & Co. (MKC), that should graduate to Champion status and two Challengers (NuStar Energy LP (NS) and Shenandoah Telecommunications (SHEN)) that should graduate to Contender status, the projected totals at year-end would be 96 Champions, 124 Contenders, and 179 Challengers, for a total of 399 companies with dividend streaks of at least five years.



    Disclosure: Author owns KFT.
    Oct 05 12:20 AM | Link | 13 Comments
  • Dividend Champions: New and Improved
     

    The Dividend Champions spreadsheet has been updated through 9/30/10

    To download the latest version of the U.S. Dividend Champions spreadsheet or PDF, go here: http://dripinvesting.org/Tools/Tools.asp

    During the past month, I have again been working on some significant changes to improve the Dividend Champions listing, and those include expansion of the Champions and Contenders tabs to include fundamental data obtained from Yahoo! Finance and the addition of two new tabs to segregate Summary totals from the Champions and Contenders (with charts) and Changes that are company-specific, rather than Revisions to the spreadsheet design. I'll discuss this month's changes in order of the tabs (from left to right).


     

    Dividend Champions and Contenders Columns Added

    I've added several new columns on the right side of these listings to reflect fundamental data that is available at Yahoo! Finance, and added columns with additional calculations that may be of interest. Data from Yahoo! includes the following:

    TTM EPS (or trailing twelve months Earnings Per Share). This is generally the total of the most recently reported four quarters. Since most companies have yet to report third-quarter earnings, this number is currently the sum of the last two quarters of 2009 and the first two quarters of 2010.

    PEG Ratio (P/E Ratio divided by Growth Rate). Yahoo explains that this number uses the 5-year future growth rate, so the divisor of this ratio is composed of estimates.

    TTM P/Sales (trailing twelve months Price/Sales Ratio). Divides the current price by the total sales in the past twelve months.

    MRQ P/Book (Most Recent Quarter Price/Book Ratio). Divides the current price by the book value per share as reported in quarterly filings.

    TY Est EPS (This Year Estimated Earnings Per Share). Currently adds together 2010 actual earnings with estimates for the remaining quarters.

    NY Est EPS (Next Year Estimated Earnings Per Share). Analysts' consensus for the next fiscal year's earnings per share.

    Market Cap (Market Capitalization). Represents the number of shares outstanding multiplied by the market price. Note that I wasn't able to properly “parse” this data, so sorting based on this column will not be very successful. I had better luck separating the 52-week High and Low.

    52-week Low is the lowest closing price for the stock in the past year.

    52-week High is the highest closing price of the stock in the past year.

    In addition to this data, I have inserted columns to calculate the P/E (price/earnings) ratio, based on the current price and the trailing twelve months earnings; the Payout Ratio, based on the TTM EPS and the current dividend rate; Next Year vs. This Year Estimated EPS Growth; and the current price's percentages above the 52-week Low and below the 52-week High. I also “locked titles” so that the header rows and left-most columns (with company name and symbol) always stay in view, which might make scrolling to the right and back a bit more comfortable.

    You might notice that some data is not included, such as the companies' Cash and Debt totals and debt-to-capitalization ratio. These are simply not available from Yahoo!, hence their absence. The other important thing to remember is that all of this data has to be taken with a grain of salt. For example, any earnings per share number may or may not have unusual or one-time items, so each ratio that includes it has the prospect of being distorted. The same holds true of estimates in general and, of course, the timing of earnings announcements may have an effect on summary earnings totals. In addition, certain companies may have exaggerated numbers, such as real estate investment trusts (REITs), which typically are judged by Funds From Operation (FFO), not earnings per share. So the gist of all this is that I need to remind everyone that the listing should only be considered a starting point for more in-depth analysis.

    Only one new company joined the Champions listing this month, after having graduated from the Contenders list on the occasion of its 25th year of dividend increases. That was Brady Corp. (NYSE:BRC), a provider of identification and security products. The number of Champions remained the same, due to the deletion of BancorpSouth (NYSE:BXS), which announced a fourth-quarter dividend that was unchanged and resulted in the total 2010 payout being equal to that of 2009. I have also deleted seven Contenders and 15 Challengers since the last update (August 31) because of the same reason and expect to delete more between now and the end of the year,as other companies fail to extend their streaks. Familiar companies that were recently deleted include Progress Energy (NYSE:PGN), Foot Locker (NYSE:FL), and Kraft Foods (KFT).


     

    Two New Tabs Added

    In order to make the Champions and Contenders tabs more user- and printer-friendly, I moved the summary totals (of prior months' totals) to a new Summary tab. On that tab, I then added a page of charts that show the trends for Number of Companies, Average Price, Average Yield, and Average Percentage (of the latest increase). A second new tab was added to show company-specific changes, which were removed from the Revisions tab. On the Changes tab, there is now a table for companies that have been deleted, including the reason and date of deletion. Below that is a text-based chronological listing of companies that were added or modified in some way. Unnecessary lines were removed from the Revisions tab, which is now intended only for listing spreadsheet or PDF modifications.


     

    Final Words

    I believe that I have now completed most of the major revisions that I had planned. One possible change that is under consideration (and was mentioned by a commenter) would entail moving the Dividend History data to the Champions and Contenders tabs, locating those columns to the right of existing ones. However, I'm not sure whether users would be comfortable with that arrangement, which might require a lot of scrolling horizontally, so please comment with any opinions – pro or con – about whether that changes would be welcome.

    Between now and year-end, I will focus on two main tasks: Deleting companies that fail to extend their streaks, and Adding a column for Total Dividends Paid in 2010. The latter may not appear until November or December and would not replace 2009 in the calculation of 5- and 10-year DGRs until the December 31 update. As to the companies with streaks that are on “death watch,” there are five Champions, 10 Contenders, and 19 Challengers that may be deleted. Taking into account one Contender, McCormick & Co. (NYSE:MKC), that should graduate to Champion status and two Challengers (NuStar Energy LP (NYSE:NS) and Shenandoah Telecommunications (NASDAQ:SHEN)) that should graduate to Contender status, the projected totals at year-end would be 96 Champions, 124 Contenders, and 179 Challengers, for a total of 399 companies with dividend streaks of at least five years.



    Disclosure: Author owns none of the stocks mentioned.
    Sep 30 11:40 PM | Link | 8 Comments
  • Dividend Champions Update, Part 1: History Improved
     

    The Dividend Champions spreadsheet has been updated through 7/30/10

    To download the latest version of the U.S. Dividend Champions spreadsheet or PDF, go here: http://dripinvesting.org/Tools/Tools.asp

    During the past month, I have been working on significant changes to improve the Dividend Champions listing, and those include expansion of the Contenders tab and the additional of a new group of companies with 14 or fewer years of dividend growth. Because there is much to discuss, I will do this in two parts. Part 1 (below) will focus on the main Champions listing and the accompanying DivHistory tab. In Part 2, I'll focus on the Contenders and the new “Challengers” listing.


     

    Improved DivHistory Calculations

    A couple of months ago, I added the tab that lists dividends paid by year for the 100 Dividend Champions. I followed that up by inserting columns that showed the average percentage increase in the dividend for the latest 5- and 10-year periods and created a ratio to show Acceleration/Deceleration (or A/D) using those two numbers. The problem with using such averages is that they don't properly express the rate of growth in the dividend. A much better method is to calculate the Compound Annual Growth Rate, or CAGR, for the periods involved. Fortunately, I had some help in accomplishing this task, and would like to acknowledge the contributions of Robert Schwartz (“notbob” on Seeking Alpha) and SA user TLassen, who guided me to the proper Excel formula. Once I had the proper CAGR calculations, I was able to confirm their accuracy b y comparing them to Mr. Schwartz's results.

    It's important to understand the difference between CAGRs and “annualized” numbers like the ones I had previously created. I posted an Instablog about this, which can be found here: http://seekingalpha.com/instablog/595199-david-fish/82433-the-sad-truth-about-annualized-returns

    There are two main problems with “annualized” numbers. First, they tend to overstate rates of change and, second, the degree of overstatement increases over time. The result is that, no matter how well intentioned, using such figures is bound to lead one astray. So replacing the averages that I had been showing with CAGRs was a major step in the direction of accuracy and relevance.

    I was surprised initially by the magnitude of the change and a couple of examples demonstrate how distorted the annualized numbers can be. Under the old format, AFLAC (NYSE:AFL) had 5- and 10-year average percentage changes in the dividend of 38.9% and 67.2%, respectively, resulting in an A/D ratio of 0.579, which suggests that the rate of dividend increases was slowing. But using CAGRs, the 5- and 10-year changes were 24.1% and 22.7%, respectively, resulting in an A/D ratio of 1.064 and properly showing that the company had, in fact, been increasing the percentage of its increases. Likewise, the old numbers for Air Products & Chemicals (NYSE:APD) were 12.7%, 15.4%, and 0.829, respectively, whereas the new numbers are 10.4%, 9.7%, and 1.062. Like AFLAC, the company had stepped up its rate of dividend increase rather than slowing it.

    Since the A/D ratio is still somewhat new, it remains to be seen what its significance may be, or how it will be useful to investors. My initial idea is that numbers close to 1 demonstrate a level of consistency that is desirable in a dividend stock, but that there is a certain degree of “drag” that makes it natural for the ratio to slip below 1. (Increases of the same currency amount each year would automatically be a smaller percentage.) The main problem with consistency is that a company can be consistently stingy, so I think the A/D ratio has to used in conjunction with the CAGRs, which can highlight a company's generosity. I think that these items bear further discussion in the future.


     

    Composite Averages Added to Champions Tab

    A second change this month involves the averages that have been posted at the bottom of the Champions tab showing the number of companies and average length of streak, price, yield, and the percent of the latest increases. Previously, I had shown the current month along with the previous month and a year earlier, for comparison purposes. Beginning with the 7/30 update, I am showing all previous month-end figures. (See below for a modified version.) I think this will give us a better picture of the overall trends for Dividend Champions. As you can see, my listings began with 139 companies and has dipped below 100 in total until recently. (Because of some later additions, the highest number of Champions would have exceeded 140.) Because the roster of companies has not remained constant, the comparisons are not exact, but they do give us a good picture of this “universe.” While the average streak has consistently grown longer, the average price has fluctuated between $29.80 (near the 2009 lows) and $49.53 (near April's highs). Likewise, the average yield has fluctuated between 2.90% (near the April highs) and 4.93% (near the 2009 lows). What's most striking, though, is the decline in the average percentage of the dividend increases, which has fallen from nearly 11% to just over 5%, although it has recently shown a slight improvement. The obvious reasons begin with the dividend cuts and eliminations that reduced the number of companies listed and end with the fact that many companies have recently been more conservative because of the recession. The trend bears watching, but I am optimistic that will have reversed itself soon.

     


     


     


     

    Years

    Price

    Yield

    %Inc.

    Averages for

    100

    companies at 6/30/10

    38.4

    44.27

    3.26

    5.37

    Averages for

    100

    companies at 5/28/10

    38.3

    46.36

    3.13

    5.16

    Averages for

    99

    companies at 4/30/10

    38.2

    49.53

    2.90

    5.19

    Averages for

    99

    companies at 3/31/10

    38.1

    48.10

    2.98

    5.15

    Averages for

    98

    companies at 2/26/10

    38.0

    46.06

    3.10

    5.10

    Averages for

    98

    companies at 1/29/10

    37.8

    44.87

    3.14

    7.11

    Averages for

    98

    companies at 12/31/09

    37.7

    45.79

    3.05

    7.05

    Averages for

    97

    companies at 11/30/09

    37.6

    45.14

    3.11

    7.18

    Averages for

    98

    companies at 10/30/09

    37.4

    43.46

    3.21

    7.60

    Averages for

    104

    companies at 9/30/09

    37.1

    42.64

    3.22

    7.49

    Averages for

    107

    companies at 8/31/09

    37.0

    40.63

    3.30

    7.79

    Averages for

    109

    companies at 7/31/09

    36.9

    39.50

    3.39

    8.37

    Averages for

    109

    companies at 6/30/09

    36.9

    36.80

    3.64

    8.35

    Averages for

    109

    companies at 5/29/09

    36.8

    36.52

    3.66

    8.68

    Averages for

    112

    companies at 4/30/09

    36.7

    35.82

    3.79

    8.63

    Averages for

    116

    companies at 3/31/09

    36.4

    32.30

    4.36

    8.74

    Averages for

    120

    companies at 2/27/09

    36.4

    29.80

    4.93

    8.77

    Averages for

    125

    companies at 1/30/09

    36.1

    32.75

    4.57

    9.30

    Averages for

    128

    companies at 12/31/08

    35.9

    35.71

    3.92

    9.59

    Averages for

    128

    companies at 11/28/08

    35.9

    35.58

    3.94

    9.91

    Averages for

    126

    companies at 10/31/08

    35.8

    37.58

    3.68

    10.36

    Averages for

    131

    companies at 9/30/08

    35.6

    43.72

    3.17

    10.50

    Averages for

    132

    companies at 8/29/08

    35.6

    44.88

    3.23

    10.85

    Averages for

    132

    companies at 7/31/08

    35.5

    43.96

    3.32

    10.67

    Averages for

    133

    companies at 6/30/08

    35.4

    42.80

    3.53

    10.52

    Averages for

    135

    companies at 5/30/08

    35.4

    46.49

    3.06

    9.18

    Averages for

    135

    companies at 4/30/08

    35.3

    45.89

    3.02

    9.92

    Averages for

    135

    companies at 3/31/08

    35.2

    44.41

    3.09

    10.06

    Averages for

    136

    companies at 2/29/08

    35.2

    43.72

    3.13

    10.15

    Averages for

    136

    companies at 1/31/08

    34.9

    44.54

    2.97

    10.21

    Averages for

    139

    companies at 12/25/07

    34.5

    N/A

    N/A

    10.23


     

    Final Word

    A third, less significant change for this update is that I plan to post the spreadsheet in alphabetically order. Previously, it had been presorted in descending order by the length of the streak. Although this may have served to impress people, I now think that using the information (and switching between tabs) is easier if it is left in alphabetical order. I plan to continue to post the PDF version in the old format, pending any feedback. For those who lack a spreadsheet program, the excellent Open Office suite is available on the same web page as the Dividend Champions.



    Disclosure: Author owns AFL among 28 of 100 Dividend Champions
    Jul 30 6:59 PM | Link | 1 Comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.