Companies can only raise their dividends regularly if earnings grow sufficiently.
Monitoring dividend increases for stocks on my watch list is one way to identify candidates for further analysis.
In the last week, ten companies on my watch list declared dividend increases.
Monitoring dividend increases for stocks on my watch list is one way to identify candidates for further analysis. Companies can only increase their dividends regularly if earnings grow sufficiently. Recently, ten companies on my watch list announced dividend increases. The table below presents a summary of these increases.
The table is sorted by the percentage increase, %Incr. Dividends are annualized and in US$, unless otherwise indicated. Yield is the new dividend yield for the market close Price on the date listed. Yrs are years of consecutive dividend increases, while 5-yr DGR is the compound annual growth rate of the dividend over a 5-year period. 1-yr %Incr is the percentage increase from the year-ago dividend. (Some companies increase their dividends more than once a year, so this puts the most recent dividend increase in context).
Summary of Dividend Increases: October 16-20, 2017
Previous Post: 11 Dividend Increases: October 9-13, 2017
• Huntington Bancshares (HBAN)
HBAN is a diversified regional bank holding company. Through its subsidiaries, HBAN provides commercial, small business, consumer, and mortgage banking services, as well as automobile financing, equipment leasing, investment management, trust services, brokerage services, customized insurance programs, and other financial products and services. HBAN was founded in 1866 and is headquartered in Columbus, Ohio.
On Friday, October 20, HBAN increased its quarterly dividend to 11¢ per share, an increase of 37.50%. The dividend is payable January 2, with an ex-dividend date of December 15.
• Lincoln Electric Holdings (LECO)
LECO, through its subsidiaries, designs, develops, manufactures, and sells arc-welding products, robotic arc-welding systems, plasma, and oxy-fuel cutting equipment. The company sells its products directly to users, as well as through industrial distributors, retailers, and agents. LECO was founded in 1895 and is headquartered in Cleveland, Ohio.
On October 17, the board of directors approved an increase to the regular quarterly dividend from 35¢ per share to 39¢ per share, an increase of 11.43%. The dividend is payable on January 12 to shareholders of record on December 29. The ex-dividend date is December 28.
• Hubbell (HUBB)
HUBB designs, manufactures, and sells electrical and electronic products for a range of non-residential and residential construction, and industrial and utility applications. The company’s products include cable reels, wiring devices and accessories, junction boxes, plugs and receptacles, cable glands and fittings, switches and dimmers. It also offers a range of light-emitting diode (LED) luminaire products. HUBB was founded in 1888 and is based in Shelton, Connecticut.
On October 20, the board of directors approved an increase to the regular quarterly dividend from 70¢ per share to 77¢ per share, an increase of 10.00%. The ex-dividend date is November 29 and the dividend will be paid on December 15 to shareholders of record on November 30.
• Sensient Technologies (SXT)
Founded in 1882 and headquartered in Milwaukee, Wisconsin, SXT manufactures and markets colors, flavors, and fragrances in the United States and internationally. SXT uses technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, specialty inks and colors, and other specialty and fine chemicals.
The company increased its quarterly dividend by 10.00%, from 30¢ per share to 33¢ per share. All shareholders of record on November 6 can expect the dividend to be paid on December 1.
• Pinnacle West Capital (PNW)
PNW is a holding company that provides retail and wholesale electric services primarily in the state of Arizona. Its subsidiary, Arizona Public Service Company, is a vertically-integrated electric that generates, transmits, and distributes electricity using coal, nuclear, gas, oil, and solar resources. PNW founded in 1920 and is headquartered in Phoenix, Arizona.
Recently, the board of directors of PNW declared a quarterly dividend of 69.5¢ per share. The new dividend represents an increase of 6.11%. PNW will trade ex-dividend on October 31. The dividend is payable on December 1, to shareholders of record on November 1.
• 1st Source (SRCE)
SRCE operates as the bank holding company for 1st Source Bank, providing a range of financial products and services to individual and business clients in the United States. The company offers commercial and consumer banking services, trust and investment management services, and insurance. SRCE was founded in 1863 and is headquartered in South Bend, Indiana.
The company increased its quarterly dividend by 5.26%, from 19¢ per share to 20¢ per share. The dividend is payable on November 15 to shareholders of record on November 6. SRCE will trade ex-dividend on November 3.
• Phillips 66 Partners (PSXP)
Founded in 2013 and headquartered in Houston, Texas, PSXP acquires and distributes crude oil and refined petroleum products in the United States. The company owns and operates natural gas liquids pipelines and terminals, as well as other transportation and midstream assets. Phillips 66 Partners GP LLC operates as the general partner of PSXP.
On October 18, the board of directors approved an increase to the regular quarterly distribution from 61.5¢ per unit to 64.6¢ per unit, an increase of 5.04%. The distribution is payable on November 13 to unitholders of record on October 31. PSXP will trade ex-dividend on October 30.
• AVX (AVX)
AVX manufactures and supplies various passive electronic components, interconnected devices, and related products. The company markets its products to multi-national original equipment manufacturers, independent electronic component distributors, and electronic manufacturing service providers. A subsidiary of Kyocera Corporation, AVX was founded in 1972 and is headquartered in Fountain Inn, South Carolina.
Recently, AVX increased its quarterly dividend to 11.5¢ per share, an increase of 4.55% over the prior dividend of 11¢ per share. The new dividend is payable on November 16 to shareholders of record on November 2. The ex-dividend date will be November 1.
• Magellan Midstream Partners (MMP)
Founded in 2000 and headquartered in Tulsa, Oklahoma, MMP is a publicly traded partnership engaged in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. The company owns the longest refined products pipeline in the USA, with access to about half of the nation’s refining capacity.
The company declared a quarterly distribution of 90.5¢ per unit, an increase of 1.69% over the prior quarterly distribution. The quarterly distribution will be paid on November 14 to unitholders of record on November 2. The ex-dividend date is November 1.
• Healthcare Services Group (HCSG)
HCSG provides management, administrative and operating services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of the healthcare industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. HCSG was founded in 1976 and is based in Bensalem, Pennsylvania.
The company announced an increase in its quarterly dividend of 0.66% to 19¢ per share. The stock will trade ex-dividend on November 16, and shareholders can expect to receive the new dividend on December 22.
Please note that I'm not recommending any of these stocks. Readers should do their own research on these companies before buying shares.
As a bonus, I include charts from F.A.S.T. Graphs for three of this week's dividend raisers, SXT, PNW, and HCSG.
In these charts, the black line represents the share price, and the blue line represents the calculated P/E multiple at which the market has tended to value the stock over time. The orange line is the primary valuation reference line. It is based on one of three valuation formulas depending on the earnings growth rate achieved over the timeframe in question. (The Adjusted Earnings Growth Rate represents the slope of the orange line in the chart).
SXT's price line (black) is above the primary valuation line (orange) and above the stock's normal P/E ratio (BLUE). The stock is trading at a premium to fair value. An investment in SXT in January 2007 would have returned 12.6% on an annualized basis (with dividends included).
PNW's price line is above the stock's normal P/E ratio and above the primary valuation line. The stock is trading at a premium to fair value. An investment in PNW in January 2007 would have returned 7.6% on an annualized basis (with dividends included).
HCSG's price line is above the primary valuation line and above the stock's normal P/E ratio. The stock is trading at a premium to fair value. An investment in HCSG in January 2007 would have returned 15.1% on an annualized basis (with dividends included).
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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.