As dividend investors we want not only to receive a good return on our investment but also capital appreciation. The best way to do this is to target companies in a known distribution-hiking cycle. A number of companies are known to produce regular, annual, dividend increases and this year is no different. While some, like Johnson & Johnson (NYSE:JNJ) and Exxon (NYSE:XOM) carry high share prices to go along with their steadily rising payments but not all are in that class. Following are 5 dividend picks for 2017. Each has been increasing distribution payments for at least 5 years, each is expected to do so again this year, and none have a share price higher than $50.
The Weyco Group Inc (NASDAQ:WEYS) is a manufacturer and distributor of men's footwear operating in two segments; higher end dress shoes and lower end casual. The company has been increasing its dividend steadily over the past 35 years and yields a little more than 3% when trading at $27. Distributions are paid quarterly for a net payment of $.84. The company typically increases the payment in the fiscal 1st quarter or by the end of the calendar 2nd quarter. The company has recently reported a couple of quarters with weaker than expected earnings which have helped drive share prices down to a 1 year low. The stock has been steadily rising over the past 5 years, supported by improving labor markets, and is expected to continue rising along with those same labor markets into the coming years.
Tanger Factory Outlet Centers (NYSE:SKT) is a fully integrated real estate investment trust engaged in the business of buying, building and operating factory outlet stores and is the largest such company in existence. They have been increasing their dividend on an annual basis for 23 years with a yield near 4% when trading near $32. The dividend is paid quarterly for an annualized distribution of $1.30. Over the past 3 quarters the company has delivered market beating performance driven by increases in comp store sales and improvements in consumer spending. Consumer spending is improving on the back of labor markets which has seen wages grow at a rated greater than 2.5% YOY for the last 12 months. Outlook for labor is good, as is the consumer, which is good for Tanger Factory Outlets. As an added bonus this fund provides diversification into the real assets space, along with inflation protection that comes with it.
International Speedway Corporation (NASDAQ:ISCA) owns and operates racing facilities across North America. They produce income through ticket sales at events, concession sales, advertising space, royalties and TV rights. When it comes to the dividend this company pays $0.41 annually for a yield of 1.10% at $37 with an additional increase expected this year, the 20th consecutive. Ticket and concession sales are expected to pick up over the course of the year as labor markets and consumer spending improve.
AmeriGas Partners LP (NYSE:APU), along with their subsidiary Amerigas Propane, is the largest distributor of retail propane for residential and commercial use. The company has recently seen a downturn in share prices driven by warmer than usual winter temperatures and declining natural gas prices but is still considered a healthy dividend payer. At current prices the company is yielding roughly 8%, $3.76 annually, and has been increasing its distribution annually for the past 12 years. This fund may experience further headwinds as natural gas prices remain under pressure but those risks are mitigated by improvements in consumer spending and the onset of the summer grilling season. Also, as with Tanger Factory Outlets, Amerigas Partners LP provides exposure into real assets, diversification within the portfolio and the healthiest dividend of the lot.
Steelcase (NYSE:SCS), contrary to its name, is engaged in the business of high-performance work environments. The company's portfolio of products includes furniture systems, seating, storage and technology solutions for business. Current distribution is $0.48 annually, paid quarterly, for a yield near 3% when trading at $16. The business model says it all here, providing high-performance work environments within an economy approaching full employment. Bottom line, each month of positive job creation, rising participation and declining layoffs is another month Steelcase is making money.
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. I have no business relationship with any company whose stock is mentioned in this article.