Dividend Champions for March 2011

by: David Fish

The Dividend Champions spreadsheet and PDF have been updated through 2/28/11 and are available 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 have focused on updating the listings for dividend increases and other announcements. Following is a discussion of my latest efforts.

What's New

During February, the Dividend Challengers were joined by several new companies that have reached the five-year level of dividend increases, including Dun & Bradstreet (NYSE:DNB), Flowserve (NYSE:FLS), Southwest Gas (NYSE:SWX), and Textainer Group (NYSE:TGH). Meanwhile, several Challengers moved up to Contender status by recording their 10th year of dividend increases, including three banks and Novartis (NYSE:NVS), and National Health Investors (NYSE:NHI) was added from outside the previous “universe” of listed companies.

I also corrected Thomson Reuters (NYSE:TRI) to reflect its 18-year streak. (This was a case where Yahoo's dividend history came up short.) Overall, the roster of “CCC” companies grew to 447 from 436 at the end of January. I expected these trends to continue, since many of the Challengers have already recorded nine years of increases, so they'll graduate to the Contenders list during 2011 and there are plenty of companies to take their place. There were no graduations to Champion status this month, but Raven Industries (NASDAQ:RAVN) is likely to declare their 25th straight annual dividend increase in March and other companies should follow suit in the succeeding months.

As expected, corporations appear to be getting more generous with their increases now that the worst of the recent financial problems have passed and recovery seems to be under way. The average increase by the 99 Champions has risen from 5.95% at the end of January to 6.09% at the end of February, its highest reading in a year. The average yield slipped from 2.92% to 2.85%, but that was due to an increase in the average share price from $51.85 to $53.67, a new high since I began compiling the listing in December 2007 and closing in on a doubling of the $29.80 low in February 2009.

Meanwhile, the Challengers' average increase rose from 6.88% to 7.60%, so the average yield rose from 2.93% to 2.95%, even though the average price was $46.96, up from $45.97 at the end of January. (The addition of six companies no doubt helped the percentage increase to some extent.)

What's Different

Although there were again no major structural changes this month, I did add some lines to the Contenders and Challengers tabs that show combined amounts for the different groupings. At the bottom of the Contenders tab, I've added combined Champions/Contenders averages.

At the bottom of the Challengers tabs, you'll find combined Contenders/Challengers averages and the combined numbers for all CCC companies. I'm not sure how useful these numbers will be, but they at least make for an interesting comparison between the groups with longer and shorter dividend streaks.

As mentioned last month, I have added National Presto Industries (NYSE:NPK) as a “special case” because of its regular “special” dividend that is paid at the same time as the annual dividend. Unfortunately, this year's increase turned out to be miniscule, but at least the company appears to value its streak enough to extend it. I haven't yet implemented the other change I was mulling over, namely replacing the most recent percentage increase for companies that raise their payout more than once with a notation such as “m” for “multiple.” I don't think this practice would appear until at least the second quarter anyway, as I don't anticipate using it across different calendar years.

Coming Up

I wanted to mention two other issues this month: 1. The possibility of changing the source of the Fundamental Data, and 2. A series of articles that I plan to submit focusing on Industry.

The first issue arose in mid-February when Yahoo decided to debut a dynamic replacement for their portfolio function. The new set-up may have been technologically advanced, but it proved to be a nightmare in terms of usability, since it did not allow me to cut and paste data as I had always been able to do. Fortunately, Yahoo decided (apparently after a flood of complaints) to restore its familiar portfolio set-up, so I was able to fetch data as before. But the “threat” of losing that source has me considering alternate sources of data. So far, the best candidate for data seems to be FinViz, which offers most of the same data items and possibly more, albeit in different arrangements. I haven't made a firm decision on changing yet, but it is under consideration.

The second item involves a series of articles that I hope to publish in fairly quick succession (so that the data used doesn't get “stale”). I plan to focus on industries and combine the Champions, Contenders, and Challengers in order to give interested investors a look at all the dividend-increasing companies together. I hope that this will give them a good starting point for researching industries for portfolio diversification.

Rather than write these up in alphabetical order, I'm going to start with some of the high-yield industries, such as MLPs, REITs, and Utilities, and work my way lower on the “yield curve.” Hopefully, these will all come out in the first half of March. Initially, I thought of doing this in early February, but decide that it would be better to wait for the “earnings season” to end so that the “trailing twelve-month” earnings would represent 2010 results and that “This Year” and “Next Year” EPS estimates would coincide with 2011 and 2012, respectively, for most companies.

As always, I welcome suggestions in the Comment section below.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.