9 Dividend Increases: October 8-12, 2018

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Includes: AOS, BRO, EV, GT, IP, POL, THO, TRI, UTX
by: FerdiS
Summary

Companies that regularly raise their dividend payments show confidence in future earnings growth potential.

One way to identify dividend growth stocks for further analysis is to monitor dividend increases.

In the past week, 9 companies announced dividend increases.

I like monitoring dividend increases for stocks on my watch list of dividend growth stocks because I consider such stocks to be candidates for further analysis. Companies that regularly increase their dividends show confidence in future earnings growth potential.

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

  • Dividend Yield ≥ 1.0%
  • Market cap ≥ $1 billion
  • No stocks that are being acquired
  • No Over-The-Counter or Pink Sheet stocks

This week, 9 companies that announced dividend increases passed these screens.

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 8-12, 2018

Previous Post: 5 Dividend Increases: October 1-5, 2018

A.O. Smith (AOS)

AOS manufactures and markets water heaters, boilers, and other products for residential and commercial end markets in the United States, China, Canada, Europe, and India. The company provides electric, natural gas, gas tankless, and liquid propane water heaters, as well as solar tank units for use in residences and businesses. AOS is headquartered in Milwaukee, Wisconsin.

Recently, the board of directors of AOS declared a quarterly dividend of 22¢ per share. The new dividend represents an increase of 22.22%. The new dividend is payable on November 15 to shareholders of record on October 31, with an ex-dividend date of October 30.

Goodyear Tire & Rubber (GT)

GT develops, manufactures, distributes, and sells tires and related products and services worldwide. The company offers rubber tires for automobiles, trucks, buses, aircrafts, motorcycles, earthmoving and mining equipment, farm implements, and industrial equipment under various brands, including Goodyear, Dunlop, and Kelly. GT was founded in 1898 and is headquartered in Akron, Ohio.

Recently, GT increased its quarterly dividend to 16¢ per share, an increase of 14.29% over the prior dividend of 14.¢ per share. The dividend is payable on December 3 to shareholders of record on November 1.

Eaton Vance (EV)

EV, through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. The company provides investment management and advisory services to high-net-worth individuals and institutions. It also advises investment companies. EV was founded in 1944 and is headquartered in Boston, Massachusetts.

EV will pay a quarterly dividend of 35¢ per share, an increase of 12.90% over the previous quarterly dividend. The stock will trade ex-dividend on October 30, and shareholders can expect to receive the new dividend on November 15.

PolyOne (POL)

POL provides specialized polymer materials, services, and solutions in the United States, Canada, Mexico, Europe, South America, and Asia. The company operates in four segments: Color, Additives and Inks; Specialty Engineered Materials; Performance Products and Solutions; and PolyOne Distribution. POL was founded in 1927 and is headquartered in Avon Lake, Ohio.

On October 11, the company declared a dividend of 19.5¢ per share. The new dividend represents an 11.43% increase. The new dividend is payable on January 9 to shareholders of record on December 14. The ex-dividend date will be December 13.

Brown & Brown (BRO)

BRO markets and sells a range of insurance and reinsurance products and services, as well as risk management, third-party administration, managed health care, and Medicare set-aside services and programs. Customers include businesses, public entities, individuals, trade, and professional associations. BRO was founded in 1939 and is headquartered in Daytona Beach, Florida.

On Wednesday, October 10, BRO increased its quarterly dividend to 8¢ per share, an increase of 6.67%. The ex-dividend date is October 25 and the dividend will be paid on November 7 to shareholders of record on October 26.

Thor Industries (THO)

THO designs, manufactures, and sells recreational vehicles, and related parts and accessories, primarily in the United States and Canada. The company operates in two segments: Towable Recreational Vehicles and Motorized Recreational Vehicles. It markets its recreational vehicles through independent dealers. THO was founded in 1980 and is based in Elkhart, Indiana.

Recently, the board of directors of THO declared a quarterly dividend of 39¢ per share. The new dividend represents an increase of 5.41%. The new dividend is payable on November 9 to shareholders of record on October 25, with an ex-dividend date of October 24.

International Paper (IP)

Founded in 1898 and based in Memphis, Tennessee, IP is a packaging and paper company with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia, North Africa, and the Middle East. IP’s businesses include industrial and consumer packaging along with uncoated papers and pulp.

On October 9, the company declared a dividend of 50¢ per share. The new dividend represents a 5.26% increase. The dividend is payable on December 14 to shareholders of record on November 15. The stock will trade ex-dividend on November 14.

United Technologies (UTX)

Founded in 1934 and headquartered in Farmington, Connecticut, UTX provides high technology products and services to building systems and aerospace industries around the world. The company operates in several segments: the Otis segment, the UTC Climate, Controls & Security segment, the Pratt & Whitney segment, and the UTC Aerospace Systems segment.

The company increased its quarterly dividend by 5.00%, from 70¢ per share to 73.5¢ per share. The first payment will be on December 10 to shareholders of record on November 16. The ex-dividend date is November 15.

Thomson Reuters (TRI)

Incorporated in 1977, TRI provides intelligent information for businesses and professionals worldwide. The company sells electronic content and services primarily on a subscription basis. TRI also operates Reuters, which provides real-time multimedia news and information services to newspapers, television and cable networks, radio stations, and websites. TRI is headquartered in New York, New York.

TRI will pay a quarterly dividend of 35¢ per share, an increase of 1.45% over the previous quarterly dividend. The stock will trade ex-dividend on November 14, and shareholders can expect to receive the new dividend on December 17.

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, AOS, THO, and UTX.

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).

AOS's price line (black) is above the primary valuation line (orange) and below the stock's normal P/E ratio (blue). The stock is trading at about fair value. An investment in AOS in June 2009 would have returned 28.1% on an annualized basis (with dividends included).

THO'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 to fair value. An investment in THO in June 2009 would have returned 16.9% on an annualized basis (with dividends included).

UTX'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 UTX in June 2009 would have returned 11.8% 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 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: October 16-29, 2018

Company

Ticker

Yield

Recent

Price

Yrs

5-Yr

DGR

Next

Div.

Ex-Div

Date

Pay-
able

Date

Accenture plc

ACN

1.83%

$159.44

13

12.40%

$2.92

10/17

11/15

Apogee Enterprises

APOG

1.61%

$39.12

7

9.80%

$0.63

10/22

11/07

Saul Centers

BFS

4.06%

$51.22

5

7.20%

$2.08

10/16

10/31

Brown & Brown

BRO

1.15%

$27.91

24

10.00%

$0.32

10/25

11/07

First Busey

BUSE

2.75%

$29.12

5

8.40%

$0.80

10/18

10/26

Caterpillar

CAT

2.42%

$142.07

25

9.60%

$3.44

10/19

11/20

Cracker Barrel Old Country

CBRL

3.33%

$150.31

16

27.40%

$5.00

10/18

11/05

Colgate-Palmolive

CL

2.69%

$62.54

55

5.40%

$1.68

10/18

11/15

CVS Health

CVS

2.68%

$74.58

14

25.20%

$2.00

10/23

11/01

Fastenal

FAST

3.07%

$52.07

19

11.60%

$1.60

10/23

11/21

Foot Locker

FL

2.78%

$49.70

8

11.30%

$1.38

10/18

11/02

H.B. Fuller

FUL

1.36%

$45.50

49

12.30%

$0.62

10/17

11/01

Graco

GGG

1.33%

$39.90

21

9.90%

$0.53

10/19

11/07

Hormel Foods

HRL

1.89%

$39.69

52

17.80%

$0.75

10/19

11/15

Lakeland Financial

LKFN

2.35%

$44.32

7

13.90%

$1.04

10/24

11/05

Lowe's

LOW

1.82%

$105.36

56

20.40%

$1.92

10/23

11/07

LTC Properties

LTC

5.41%

$42.11

8

5.00%

$2.28

10/22

10/31

Main Street Capital

MAIN

6.24%

$37.49

8

5.50%

$2.34

10/18

11/15

McGrath RentCorp

MGRC

2.74%

$49.66

26

2.10%

$1.36

10/16

10/31

Oxford Industries

OXM

1.71%

$79.74

8

13.20%

$1.36

10/18

11/02

Procter & Gamble

PG

3.63%

$79.06

62

4.40%

$2.87

10/18

11/15

PNC Financial Services Group

PNC

3.06%

$124.26

8

10.90%

$3.80

10/16

11/05

Pentair

PNR

1.79%

$39.00

42

9.40%

$0.70

10/18

11/02

Thor Industries

THO

1.94%

$80.47

8

16.60%

$1.56

10/24

11/09

WD-40

WDFC

1.44%

$150.28

9

11.10%

$2.16

10/18

10/31

Williams-Sonoma

WSM

2.82%

$60.89

13

11.80%

$1.72

10/25

11/21

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Disclosure: I am/we are long CVS, HRL, LOW, MAIN, PG. 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.