Periodic Table Of Dividend Champions

Includes: CVX, EMR, JNJ, KMB, KO, MCD, PG, T
by: David Van Knapp


The Periodic Table ranks Dividend Champions by yield and dividend growth rate.

Of 105 Champions, 36 have yields greater than 2% and/or attractive dividend growth rates.

A few of the 36 have announced dividend increases for 2014 that are significantly below their 3-year rates.

Here is a new version of the ever-popular Periodic Table of Dividend Champions.

I got the periodic table idea from, of all things, an automobile magazine a few years ago. I was reading it while sitting in a waiting room while my oil was being changed. The magazine used it to compare attributes of sports cars. I thought it was pretty cool. The oil is long since gone, but the idea lives on.

Dividend Champions are stocks that have raised their dividends for 25 years in a row. These companies 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 March, there are 105 Champions. The source for this and all data in this article is David Fish's most recent Dividend Champions document (aka CCC).

The periodic table displays the 105 Dividend Champions in the following fashion.

  • Down the side are current yields. Yields on the Champions range between 0.57% to 5.92%. Obviously, a quarter or half century of increasing dividends does not necessarily translate to a high yield. The sufficiency of a dividend is a different question from whether it has been raising dividends for a long time. Each investor must determine sufficiency for himself or herself. The average yield for the Champions is 2.5%.
  • Across the top are dividend growth rates (DGR). I chose to use the 3-year DGR, which covers the years 2011-2013. I would normally prefer a longer sample (such as the 5-year DGR), but I want to portray DGRs that have been established since the worst part of the financial crisis was over. The 5-year DGR still includes 2009. DGRs in this group range from 0.7% per year to 80%, with an average of 7.6%. I rounded DGRs to the nearest percent for placement in the table.

As in the past, I have shaded the cells where the stocks of least likely interest reside. Of course, interest will vary from investor to investor, and it will often be determined by factors other than yield and DGR. This is how I chose what to shade:

Yield: I shaded stocks with yields under 2.0%. That is my generic definition of insufficiency.

DGR: I used a "stepped" approach to DGRs.

  • All stocks with yields under 2% are shaded no matter what their DGR is.
  • Stocks with yields of 2.1% to 2.4% are shaded unless their DGRs are at least 9% per year.
  • If a stock's yield is 5% or more, 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.

Comments and Observations

Many of the stocks in the white area form a Who's Who of dividend growth investing. They include Coca-Cola (NYSE:KO), Chevron (NYSE:CVX), Emerson Electric (NYSE:EMR), AT&T (NYSE:T), Johnson & Johnson (NYSE:JNJ), Kimberly-Clark (NYSE:KMB), Procter & Gamble (PG) and McDonald's (NYSE:MCD).

Of the 105 Dividend Champions, 36 are in the white area. Please use the shading in the spirit in which it is intended. Being shaded is not a criticism, and being unshaded is not an endorsement. Remember this table covers only two metrics - yield and DGR - which by themselves do not constitute sufficient due diligence for any stock investment.

Seven 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 their streaks must be considered to be in danger. These are denoted by "?" after the ticker symbol. None are in the white area.

Some of the Champions have already announced dividend increases for 2014. Here is a complete rundown for the companies in the white area of the Periodic Table. I have shaded a few where the most recent increase is a significant drop from the 3-year number.

Disclosure: I am long CVX, KO, MCD, JNJ, PG, KMB, T. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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