Dividend Challengers (And Near-Challengers): 46 Increases Expected By August 31

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Includes: AGU, AXP, BMTC, BSET, BT, BYLK, CAKE, CHE, COBZ, CVLY, DEO, EDR, EEP, EVER, EXPE, FCBC, HAR, HOPE, HSY, IGT, KMT, LFUS, LHO, LTXB, MCK, MLHR, MPC, MRLN, PAYX, PCAR, PCBK, POPE, PRIM, RECN, RGA, RMD, SCVL, SMBC, SMG, SSI, TILE, TRN, TSO, USB, WMPN, WRK
by: David Fish

Summary

Which companies will continue double-digit increases?

Can Enbridge Energy Partners LP afford to "graduate" to Contender status?

Is Diageo plc a Bargain?

In compiling the Dividend Champions list (found here) I get to see which companies are nearing the anniversaries of their previous dividend increases. Since most of these firms raise their payout about the same time every year, I can say with some confidence that they are likely to do so again. I have separated the Champions (25 or more years of higher dividends), Contenders (10-24 years), and Challengers (5-9 years) into distinct groupings, so please look for the other articles, which I hope will be published about the same time. Note that "CCC" refers to the combination of Champions, Contenders, and Challengers.

Dividend Growth Vacation

The lazy, hazy days of Summer are upon us and, much like the rest of the world, Dividend Growth takes a "vacation" each year about this time of year. As I spelled out back in 2011, in this article, the frequency of dividend-increase announcements is lowest in July (by ex-dividend dates), at just 3.1%. Generally, that means that June and July are the slowest point for such announcements, after which a brief surge occurs in August and beyond. Keep that in mind the next time you see an article proclaiming the "death" of dividend growth; you simply can't judge a long-term trend by "vacation" numbers!

The number of announcements for all Champions, Contenders, Challengers, and Near-Challengers expected in the next 11 weeks has actually increased from just 63 a month ago to 78 now, still in the "below average" category, but up slightly due to a small surge in August. I would expect the overall activity to remain relatively light until late in the third quarter and heading into the usual heavier activity in this year's fourth quarter and the first quarter of 2017.

The table below coincides with the usual "forward look" of about 11 weeks for this article. Based on last year's announcements, I'm expecting the following companies to announce dividend increases between now and the anniversary of the Ex-Dividend Date of their previous increase:

Dividend Challengers (5-9 years):

Company

Ticker

No.

5/31

Div.

MR%

LY

Ann.

DGR

Name

Symbol

Yrs

Price

Yield

Inc.

Ex-Div

Div.

5-yr

LaSalle Hotel Properties

(NYSE:LHO)

6

23.11

7.79

20.00

6/26/15

1.80

63.8

Primoris Services Corp.

(NASDAQ:PRIM)

5

21.52

1.02

37.50

6/26/15

0.22

13.7

U.S. Bancorp

(NYSE:USB)

5

42.82

2.38

4.08

6/27/15

1.02

38.0

Trinity Industries Inc.

(NYSE:TRN)

5

18.06

2.44

10.00

7/13/15

0.44

21.3

Codorus Valley Bancorp Inc.

(NASDAQ:CVLY)

5

21.41

2.31

4.00

7/24/15

0.50

18.8

Education Realty Trust Inc.

(NYSE:EDR)

5

42.79

3.46

2.78

7/29/15

1.48

19.5

William Penn Bancorp Inc.

(OTCPK:WMPN)

5

22.25

1.21

3.85

7/30/15

0.27

n/a

LegacyTexas Financial Group

(NASDAQ:LTXB)

5

26.92

2.08

7.69

7/30/15

0.56

29.0

Paychex Inc.

(NASDAQ:PAYX)

5

54.22

3.10

10.53

7/30/15

1.68

5.2

Bryn Mawr Bank Corp.

(NASDAQ:BMTC)

5

29.24

2.74

5.26

7/31/15

0.80

6.9

Pacific Continental Corp.

(NASDAQ:PCBK)

5

16.59

2.65

10.00

8/3/15

0.44

60.0

Reinsurance Group of America

(NYSE:RGA)

7

99.14

1.49

12.12

8/3/15

1.48

23.9

Enbridge Energy Partners LP

(NYSE:EEP)

9

21.74

10.73

2.28

8/5/15

2.33

2.6

WestRock Company

(NYSE:WRK)

7

39.61

3.79

17.00

8/6/15

1.50

33.7

Kennametal Inc.

(NYSE:KMT)

5

24.48

3.27

11.11

8/7/15

0.80

9.6

Marlin Business Services Corp.

(NASDAQ:MRLN)

5

15.16

3.69

12.00

8/12/15

0.56

n/a

Bassett Furniture Industries

(NASDAQ:BSET)

5

27.91

1.29

12.50

8/12/15

0.36

n/a

Harman International Industries

(NYSE:HAR)

5

78.24

1.79

6.06

8/12/15

1.40

n/a

Interface Inc.

(NASDAQ:TILE)

6

16.96

1.18

25.00

8/12/15

0.20

33.2

Paccar Inc.

(NASDAQ:PCAR)

5

55.75

1.72

9.09

8/12/15

0.96

18.7

BT Group plc

(NYSE:BT)

6

32.45

5.92

6.77

8/12/15

1.92

12.6

Diageo plc

(NYSE:DEO)

6

109.13

3.19

3.21

8/12/15

3.48

8.0

Chemed Corp.

(NYSE:CHE)

7

130.41

0.74

9.09

8/13/15

0.96

12.1

Marathon Petroleum Corp.

(NYSE:MPC)

5

34.83

3.67

28.00

8/17/15

1.28

n/a

Littelfuse Inc.

(NASDAQ:LFUS)

6

114.53

1.01

16.00

8/18/15

1.16

48.4

Pope Resources LP

(NASDAQ:POPE)

5

62.57

4.47

7.69

8/18/15

2.80

31.0

Hershey Company

(NYSE:HSY)

6

92.85

2.51

8.97

8/21/15

2.33

11.8

Resources Connection Inc.

(NASDAQ:RECN)

6

15.58

2.57

25.00

8/21/15

0.40

35.1

Scotts Miracle-Gro Company

(NYSE:SMG)

6

69.50

2.71

4.44

8/25/15

1.88

19.7

Stage Stores Inc.

(NYSE:SSI)

6

5.53

10.85

7.14

8/28/15

0.60

18.3

McKesson Corp.

(NYSE:MCK)

8

183.14

0.61

16.67

8/28/15

1.12

9.5

MR=Most Recent; LY=Last Year; DGR=Dividend Growth Rate through 2015

In addition, there's a number of Near-Challengers that are on schedule to record their fifth year of increases during this period:

Company

Ticker

No.

LY

Name

Symbol

Yrs

Ex-Div

Agrium Inc.

(NYSE:AGU)

4

6/26/15

American Express Company

(NYSE:AXP)

4

6/30/15

Shoe Carnival Inc.

(NASDAQ:SCVL)

4

7/1/15

CoBiz Financial Inc.

(NASDAQ:COBZ)

4

7/23/15

BBCN Bancorp Inc.

(BBCN)

4

7/29/15

Cheesecake Factory Inc.

(NASDAQ:CAKE)

4

8/3/15

First Community Bancshares

(NASDAQ:FCBC)

4

8/5/15

EverBank Financial Corp.

(NYSE:EVER)

4

8/7/15

Baylake Corp.

(NASDAQ:BYLK)

4

8/11/15

Southern Missouri Bancorp Inc.

(NASDAQ:SMBC)

4

8/12/15

ResMed Inc.

(NYSE:RMD)

4

8/18/15

International Game Tech. plc

(NYSE:IGT)

4

8/24/15

Expedia Inc.

(NASDAQ:EXPE)

4

8/25/15

Herman Miller Inc.

(NASDAQ:MLHR)

4

8/26/15

Tesoro Corp.

(NYSE:TSO)

4

8/26/15

Not all of the above companies will meet the strict standards of every investor, but some may be appropriate for portfolio diversification. Potential investors should do more research before committing funds.

Every Picture Tells a Story

As a bonus, I'm inserting one of Chuck Carnevale's F.A.S.T. Graphs below, highlighting one of the companies listed above. When the stock's price line has moved into the green area, it indicates that the stock is undervalued in relation to its earnings. I'm attaching the chart below.

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

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.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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