My Dividend Champions List as of December 1st

Includes: BDX, BF.A, BF.B, CSVI, MKC
by: David Fish

The Dividend Champions spreadsheet has been updated through 11/30/10. To download the latest version of the U.S. Dividend Champions spreadsheet or PDF, go here. (Note that all references to Champions mean 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.)

During the past month, I continued to focus on companies subject to deletion because of back-to-back years of paying the same amount in dividends. This dividend streak “death watch” has now ended, as all of those companies have made their fourth-quarter declarations. Although many were subject to deletion, we ended the month with 416 companies (98 Champions, 126 Contenders, and 192 Challengers). The good news is that we appear headed into 2011 with far fewer “overdue” companies and I don't believe that we'll be eliminating a significant number of them in the new year. As I write this, there are only 16 companies (4, 4, and 8) with Red Dates, indicating that they've gone more than 12 months without an increase, and all of those will have the entire new year to extend their streaks.

Major Changes This Month

As indicated during the month, I've moved the dividend histories to the Champions and Contenders tabs and eliminated the DivHistory tab. The other major changes involved adding columns to the Challengers tab, such as Industry, DRIP Fees, old and new quarterly dividend rates, and Record and Pay Dates. I also added a Fundamental Data section, which appears to the right of previous columns. In the process of uncovering Pay Dates, I found one company, Computer Services Inc. (OTCQX:CSVI), that was promoted to the Contenders list, since their latest increase was cited as being the company's 22nd consecutive year of increases, whereas Yahoo only included eight years. Note that it trades in the Pink Sheets, however, and that may not be an acceptable venue to all investors. Our other promotion was McCormick & Company (NYSE:MKC), which moved to the Champions list following its 25th consecutive annual dividend increase. One column that was added to each Fundamental Data section was the Annual Dividend rate (on the extreme left), and that is now used to calculate Payout Ratio.

Positive Trends Continue

The Dividend Champions' average latest percentage increase improved from again, an apparent indication that companies may be starting to up their dividend growth rates. At the end of November, that average was 5.98%, up from 5.71% a month ago. (See the Summary tab) The Contenders average slipped from 6.44% to 6.39%, but the newly calculated average increase for the Challengers is a more impressive 10.97%. Average prices inched up slightly and yields edged minutely down, but all three groups average yields of about 3% on average stock prices in the low $40s. I've been writing down companies with four years of increases and have already accumulated more than two dozen in just a couple of months, so I remain confident that our “universe” will continue to be replenished in the near and distant future. A few stock splits were paid in November, and a couple more will take place in December (see the Challengers Notes), so that is another trend that may resume as stock prices rise.

Final Words

I plan to add a 2010 dividend history column to the Champions and Contenders tabs (and will switch the 5- and 10-year Dividend Growth Rates to that column at year-end), but I'm not certain if or when I might add a dividend history section to the Challengers listing. As I mentioned in one comment, I may also have to make some allowance for companies that accelerate their January dividend payments into December in order to avoid potential tax increases. (Both Becton Dickinson & Co. (NYSE:BDX) and Brown-Forman (BF.A, BF.B) chose this course of action, but it would seem unfair to crowd the extra payment into the 2010 column and suggest that the 2011 total will be lower.) As always, feedback is welcome.

Disclosure: Author owns MKC and BDX.