Monitoring dividend increases for stocks on my watch is one way to identify candidates for further analysis. Companies can only raise their dividends regularly if earnings grow sufficiently. Recently, eight companies on my watch list declared dividend increases, including one of the stocks I own. The following table provides 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: November 27-December 1, 2017
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• McCormick & Co. (MKC)
MKC manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. The company’s brands include McCormick, Lawry's, and Club House. It operates in two business segments, Consumer and Industrial. MKC was founded in 1889 and is based in Sparks, Maryland.
The company's board of directors approved an increase in the quarterly dividend of 10.64% to 52¢ per share. The quarterly dividend will be paid on January 16 to shareholders of record on December 29. The ex-dividend date is December 28.
• PNM Resources (PNM)
PNM is an investor-owned holding company of energy and energy-related businesses in the United States. The company is primarily involved in the generation, transmission, and distribution of electricity. It generates electricity using coal, nuclear fuel, natural gas, solar, geothermal, and wind energy sources. PNM was founded in 1917 and is based in Albuquerque, New Mexico.
The company increased its quarterly dividend by 9.28%, from 24.25¢ per share to 26.5¢ per share. The new dividend is payable on February 1 to shareholders of record on January 18, with an ex-dividend date of January 17.
• Walt Disney (DIS)
DIS is a diversified international family entertainment company based in Burbank, California. Founded on October 16, 1923, by Walt Disney and Roy O. Disney, the company established itself as a leading animation studio before diversifying into other entertainment-related segments. Today, DIS operates in four segments: Media Networks, Parks & Resorts, Studio Entertainment, and Consumer Products & Interactive Media.
The board of directors of DIS has declared a semi-annual dividend of 84¢ per share. The new dividend is 7.69% above the prior dividend of 78¢ per share. All shareholders of record on December 11 can expect the dividend to be paid on January 11.
• Kite Realty Group Trust (KRG)
KRG is a real estate investment trust that invests in real estate markets in the United States. The company is engaged in the ownership, operation, and development of retail properties, parking garages, and dining and entertainment properties. KRG was founded in 1968 and is based in Indianapolis, Indiana.
On Wednesday, November 29, the company increased its quarterly dividend by 4.96% to 31.75¢ per share. The quarterly dividend will be paid on January 12 to shareholders of record on January 5. The ex-dividend date is January 4.
• SL Green Realty (SLG)
Founded in 1970 and based in New York, SLG is a self-managed real estate investment trust with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction, and leasing. SLG acquires, owns, repositions, manages, and leases commercial office, retail, and multifamily properties in the New York Metropolitan area.
Recently, SLG increased its quarterly dividend by 4.84% to 81.25¢ per share. The dividend is payable January 16, with an ex-dividend date of December 29.
• Merck & Company (MRK)
MRK is a global healthcare company. The company offers healthcare solutions through prescription medicines, vaccines, biologic therapies, and animal health products. The company markets to drug wholesalers and retailers, hospitals, government agencies, physicians, veterinarians, and animal producers, and healthcare providers. MRK was founded in 1891 and is headquartered in Kenilworth, New Jersey.
MRK will pay a quarterly dividend of 48¢ per share, an increase of 2.13% over the previous quarterly dividend. The quarterly dividend will be paid on January 8 to shareholders of record on December 15. The ex-dividend date is December 14.
• First Financial (THFF)
THFF is a financial holding company operating in West-Central Indiana and East-Central Illinois. Through subsidiaries, the company offers various financial services, including commercial, mortgage, and consumer lending, lease financing, trust account services, depositor services, and insurance services. THFF was founded in 1984 and is headquartered in Terre Haute, Indiana.
Recently, THFF increased its semi-annual dividend from 50¢ per share to 51¢ per share, an increase of 2.00%. The stock will trade ex-dividend on January 5, and shareholders can expect to receive the new dividend on January 15.
• Nucor (NUE)
Founded in 1940 and based in Charlotte, North Carolina, NUE manufactures and sells steel and steel products in the United States and internationally. The company also manufactures direct reduced iron for use in its steel mills. NUE processes and brokers ferrous and nonferrous metals and brokers pig iron, hot briquetted iron, and direct reduced iron.
The board of directors of NUE has declared a quarterly dividend of 38¢ per share. The new dividend is 0.66% above the prior dividend of 37.75¢ per share. The dividend is payable on February 9 to shareholders of record on December 29.
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, MKC, DIS, and MRK.
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 time frame in question. (The Adjusted Earnings Growth Rate represents the slope of the orange line in the chart).
MKC'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 MKC in November 2007 would have returned 12.6% on an annualized basis (with dividends included).
DIS'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 DIS in November 2007 would have returned 12.5% on an annualized basis (with dividends included).
MRK's price line is below the primary valuation line and above the stock's normal P/E ratio. The stock is trading at about fair value. An investment in MRK in November 2007 would have returned 2.2% on an annualized basis (with dividends included).
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Disclosure: I am/we are long DIS.
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.