31 Dividend Increases: July 16-20, 2018 (Part 1: Financials)

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Includes: AUB, BK, BLK, BMTC, BPFH, CFG, DFS, EV, FDEF, HBAN, HIG, HOPE, LKFN, MBWM, MET, NTRS, PAYX, PBCT, SRCE, STBA, STT, TMP, UCFC, UNM
by: FerdiS
Summary

Companies that regularly raise their dividends show confidence in the potential growth of future earnings.

I like monitoring dividend increase announcements because I consider such stocks that regularly increase their dividends to be candidates for further analysis.

Last week, 31 companies that match my watch list criteria announced dividend increases.

Part 1 presents details on dividend increases from the Financials sector stocks, while Part 2 will cover the remaining sectors.

One way to identify dividend growth stocks for further analysis is to monitor dividend increases. Companies can only raise their dividends sustainably if earnings grow sufficiently.

The CCC List provides a good starting point, but I limit the number of stocks to monitor by applying the following screens:

  • Market cap ≥ $500 million
  • No stocks that are being acquired
  • No Over-The-Counter or Pink Sheet stocks
  • Dividend Yield ≥ 1.5% for Challengers
  • Dividend Yield ≥ 1.0% for Contenders and Champions

In the last week, 31 companies passing these screens announced dividend increases. In the following table, I present details on Financials sector stocks. Part 2 of this article will cover the other sectors.

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: July 16-20, 2018

Previous Post: 12 Dividend Increases: July 2-13, 2018

Northern Trust (NTRS)

NTRS is a financial holding company that provides asset servicing, fund administration, asset management, and fiduciary and banking solutions around the world. The company has offices in the United States and in Canada, Europe, the Middle East, and the Asia-Pacific region. NTRS was founded in 1889 and is based in Chicago, Illinois. The company announced an increase of its quarterly dividend of 30.95% to 55¢ per share. The ex-dividend date is September 13 and the dividend will be paid on October 1 to shareholders of record on September 14.

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. The company increased its quarterly dividend by 27.27%, from 11¢ per share to 14¢ per share. The dividend is payable on October 1 to shareholders of record at the close of business on September 17.

Citizens Financial Group (CFG)

CFG operates as the bank holding company for Citizens Bank, National Association and Citizens Bank of Pennsylvania. The company provides retail and commercial banking products and services in the United States. The company operates in two segments, Consumer Banking and Commercial Banking. CFG was founded in 1828 and is headquartered in Providence, Rhode Island. Recently, CFG increased its quarterly dividend from 22¢ per share to 27¢ per share, an increase of 22.73%. CFG will trade ex-dividend on July 31. The dividend is payable on August 15, to shareholders of record on August 1.

Hartford Financial Services Group (HIG)

HIG is a holding company that provides insurance and financial services to individuals and business customers in the United States. The company operates through six segments: Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits, Mutual Funds, and Talcott Resolution. HIG was founded in 1810 and is headquartered in Hartford, Connecticut. The company increased its quarterly dividend by 20.00%, from 25¢ per share to 30¢ per share. The new dividend is payable on October 1 to shareholders of record on September 4. The ex-dividend date will be August 31.

Bank of New York Mellon (BK)

BK is an investment company that provides financial products and services to institutions, corporations, and high net worth individuals in the United States and internationally. The company operates through two segments, Investment Management and Investment Services. BK was founded in 1784 and is headquartered in New York, New York. On July 19, the board of directors declared a quarterly dividend of 28¢ per share. The new dividend represents an increase of 16.67%. The ex-dividend date is July 30 and the dividend will be paid on August 10 to shareholders of record on July 31.

United Community Financial (UCFC)

UCFC operates as the holding company for Home Savings Bank, providing consumer and business banking services in Ohio, Western Pennsylvania, and West Virginia. The company offers various deposit instruments and a variety of loan and insurance products. UCFC was founded in 1889 and is based in Youngstown, Ohio. The board of directors of UCFC has declared a quarterly dividend of 7¢ per share. The new dividend is 16.67% above the prior dividend of 6¢ per share. The stock will trade ex-dividend on July 26, and shareholders can expect to receive the new dividend on August 10.

Discover Financial Services (DFS)

Incorporated in 1960 and based in Riverwoods, Illinois, DFS is a direct banking and payment services company in the United States. DFS’s Direct Banking segment offers Discover-branded credit cards and other consumer banking products and services. The Payment Services segment processes transactions for Discover-branded credit cards and operates an electronic funds transfer network. The board of directors of DFS has declared a quarterly dividend of 40¢ per share. The new dividend is 14.29% above the prior dividend of 35¢ per share. The new dividend is payable on September 6 to shareholders of record on August 23, with an ex-dividend date of August 22.

S&T Bancorp (STBA)

Founded in 1902 and headquartered in Indiana, Pennsylvania, STBA is the bank holding company for S&T Bank. It provides retail and commercial banking products and services in Pennsylvania, Ohio, and western New York. STBA company accepts time and demand deposits and offers commercial and consumer loans, cash management services, and brokerage and trust services. The company increased its quarterly dividend by 13.64%, from 22¢ per share to 25¢ per share. The dividend is payable on August 16 to shareholders of record on August 2.

Bryn Mawr Bank (BMTC)

Founded in 1920 and headquartered in Houston, Texas, BMTC is an oil and gas exploration and production company with operations in the United States and abroad. The company’s Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids, and natural gas. Additionally, BMTC operates in the Chemical, and Midstream and Marketing segments. The company increased its quarterly dividend by 13.64%, from 22¢ per share to 25¢ per share. The first payment will be on September 1 to shareholders of record on August 1. The ex-dividend date is July 31.

First Defiance Financial (FDEF)

FDEF operates as a unitary thrift holding company that provides community-based financial services in northwest Ohio, northeast Indiana, and southeastern Michigan. The company offers checking, money market, savings, and term certificate accounts, as well as a variety of loan and insurance products. FDEF was incorporated in 1995 and is headquartered in Defiance, Ohio. The company announced a quarterly DIV increase of 13.33% to 17¢ per share. The dividend is payable on August 24 to shareholders of record on August 17.

Unum Group (UNM)

Founded in 1848 and based in Chattanooga, Tennessee, UNM provides disability insurance products and services in the United States and the United Kingdom. UNM provides long-term and short-term disability, group life, and accidental death and dismemberment products; supplemental and voluntary products; and accident, sickness, disability, life, and cancer and critical illness products. The board of directors of UNM has declared a quarterly dividend of 26¢ per share. The new dividend is 13.04% above the prior dividend of 23¢ per share. The dividend is payable on August 17 to shareholders of record at the close of business on July 30.

State Street (STT)

Through its subsidiaries, STT provides a range of financial products and services worldwide. The company offers investment servicing products and investment management services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. STT was founded in 1792 and is headquartered in Boston, Massachusetts. On July 19, the board of directors declared a quarterly dividend of 47¢ per share. The new dividend represents an increase of 11.90%. The dividend is payable on October 15 to shareholders of record on October 1. STT will trade ex-dividend on September 28.

Union Bankshares (UBSH)

UBSH operates as the bank holding company for Union Bank & Trust, which provides banking and related financial services to consumers and businesses throughout Virginia. The company’s products and services include brokerage services, mortgage products, and insurance products. UBSH was founded in 1902 and is based in Richmond, Virginia. On Thursday, July 19, UBSH increased its quarterly dividend to 23¢ per share, an increase of 9.52%. The dividend is payable August 17, with an ex-dividend date of August 2.

Mercantile Bank (MBWM)

MBWM is a bank holding company for Mercantile Bank of Michigan. The company provides commercial banking services to small- to medium-sized businesses. It also makes secured and unsecured commercial, construction, mortgage and consumer loans, and accepts checking, savings and time deposits. MBWM was founded in 1997 and is headquartered in Grand Rapids, Michigan. On Tuesday, July 17, the company increased its quarterly dividend by 9.09% to 24¢ per share. The new dividend is payable on September 19 to shareholders of record on September 7. The ex-dividend date will be September 6.

BlackRock (BLK)

BLK is an investment management company that provides a range of investment and risk management services to institutional and retail clients across the world. The company’s offerings include single and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments. BLK was founded in 1988 and is based in New York City. On Tuesday, July 17, the company increased its quarterly dividend by 8.68% to $3.13 per share. The first payment will be on September 24 to shareholders of record on September 7. The ex-dividend date is September 6.

Hope Bancorp (HOPE)

Formerly known as BBCN Bancorp, HOPE is the holding company of Bank of Hope, the regional Korean-American bank in the United States. The bank provides commercial banking services to small and medium-sized businesses and individuals in the United States. HOPE is headquartered in Los Angeles, California. HOPE will pay a quarterly dividend of 14¢ per share, an increase of 7.69% over the previous quarterly dividend. The ex-dividend date is July 26 and the dividend will be paid on August 10 to shareholders of record on July 27.

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. Recently, SRCE increased its quarterly dividend by 4.17% to 25¢ per share. The quarterly dividend will be paid on August 15 to shareholders of record on August 6. The ex-dividend date is August 3.

Please note that I'm not recommending any of these stocks. Readers should do their own research on these companies before buying shares.

Below, I'm including charts from F.A.S.T. Graphs for three of this week's dividend raisers, NTRS, DFS, and BK.

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).

NTRS's price line (black) is above the primary valuation line (orange) and at the stock's normal P/E ratio (blue). The stock is trading at about fair value. An investment in NTRS in January 2009 would have returned 9.1% on an annualized basis (with dividends included).

DFS's price line is below the stock's normal P/E ratio and below the primary valuation line. The stock is trading at a discount fair value. An investment in DFS in January 2009 would have returned 24% on an annualized basis (with dividends included).

BK'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 fair value. An investment in BK in January 2009 would have returned 16.3% on an annualized basis (with dividends included).

Upcoming Ex-Dividend Dates

As a bonus, here is a summary of available ex-dividend dates for the next two weeks. You must own a stock before its ex-dividend date to be eligible to receive the next dividend.

The table covers ex-dividend dates only for stocks in the Financials sector. See Part 2 of this article for ex-dividend dates for stocks in the other sectors.

The table is sorted by Ticker, and as before, Next Div is annualized. Please note that Next Div links to the latest dividend declaration announcement.

Summary of Upcoming Ex-Dividend Dates: Dividend Increases: July 24-August 6, 2018

Company

Ticker

Yield

Recent Price

Yrs

5-Yr DGR

Next Div.

Ex-Div Date

Payable Date

Bank New York Mellon

BK

2.11%

$53.17

7

10.60%

$1.12

07/30

08/10

Bryn Mawr Bank

BMTC

2.04%

$49.00

7

6.10%

$1.00

07/31

09/01

Boston Private Financial Holdings

BPFH

3.25%

$14.78

6

61.50%

$0.48

08/02

08/17

Citizens Financial Group

CFG

2.65%

$40.69

5

N/A

$1.08

07/31

08/15

Eaton Vance

EV

2.32%

$53.41

37

8.10%

$1.24

07/30

08/15

Lakeland Financial

LKFN

2.09%

$49.86

7

13.90%

$1.04

07/24

08/06

MetLife

MET

3.77%

$44.52

6

19.40%

$1.68

08/03

09/13

Paychex

PAYX

3.16%

$70.79

8

8.30%

$2.24

07/31

08/23

People's United Financial

PBCT

3.76%

$18.60

26

1.50%

$0.70

07/31

08/15

1st Source

SRCE

1.70%

$58.93

31

4.80%

$1.00

08/03

08/15

S&T Bancorp

STBA

2.17%

$46.07

6

6.40%

$1.00

08/01

08/16

Tompkins Financial

TMP

2.10%

$91.41

32

4.50%

$1.92

07/31

08/15

Union Bankshares

UBSH

2.17%

$42.36

7

17.00%

$0.92

08/02

08/17

United Community Financial

UCFC

2.51%

$11.14

5

N/A

$0.28

07/26

08/10

Unum Group

UNM

2.72%

$38.24

9

12.80%

$1.04

07/27

08/17

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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.