8 Upcoming Dividend Increases To Start 2019

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Includes: ACU, ERIE, HRL, LNC, MA, PFBC, ROP, T
by: Dividend Derek
Summary

All stocks have at least 5 years of dividend growth history.

A drop to 8 from 21 at the end of 2018.

5 have at least a 10% increase.

Introduction

I love stocks that grow their dividends year in and out. You probably do too! If so, you are in the right place. I've created a list of stocks that are increasing their dividend next week. This gives investors an opportunity to start or add to a position to capture an upcoming payment. This can be especially important for retirees who live on dividend checks.

This list is a trimmed-down version only covering dividend increases. A full upcoming dividend calendar is available here. If you know how this was built and the caveats, feel free to jump down to the lists themselves.

How It's Assembled

The information presented below was created by combining the "U.S. Dividend Champion" spreadsheet hosted here, with upcoming dividend information from Nasdaq. This meshes metrics about companies with dividend growth history with upcoming dividend payments (and whether those payments are increasing). These companies all have a minimum 5-year dividend growth history.

What Is The Ex-Dividend Date?

The "ex-dividend" date is the day you are no longer entitled to the dividend or distribution. You need to have made your purchase by the preceding business day. If the date is a Tuesday, you need to have purchased (or already owned) shares by market close on Monday. Be aware that for any stock going ex-dividend on a Monday (or Tuesday, if Monday may be a holiday), you must own it by the prior Friday.

Dividend Streak Categories

Here are the definitions of the streak categories as I'll be using them throughout the piece:

  • King: 50+ years
  • Champion/Aristocrat: 25+ years
  • Contender: 10-24 years
  • Challenger: 5+ years

Fun Facts

Category Count
King 1
Champion 1
Contender 3
Challenger 3

The Main List

The data is sorted by the ex-dividend day (ascending) and then the streak (descending):

Name Ticker Streak Forward Yield Ex-Div Date Increase Percent Streak Category
Erie Indemnity Company - Class A Common Stock (ERIE) 28 2.77 7-Jan-19 7.14% Champion
Acme United Corporation. (ACU) 16 3.37 7-Jan-19 9.09% Contender
Preferred Bank (PFBC) 5 2.73 7-Jan-19 20.00% Challenger
Roper Technologies, Inc. (ROP) 26 0.69 8-Jan-19 12.38% Champion
Mastercard Incorporated (MA) 7 0.7 8-Jan-19 32.00% Challenger
AT&T Inc. (T) 34 6.91 9-Jan-19 2.00% Champion
Lincoln National Corporation (LNC) 9 2.87 9-Jan-19 12.12% Challenger
Hormel Foods Corporation (HRL) 53 2.03 11-Jan-19 11.70% King

Field Definitions

Streak: This is years of dividend growth history sourced from the U.S. Dividend Champions spreadsheet. Here are some definitions to clarify the fields.

Forward Yield: This is the new payout rate divided by the current share price.

Ex-Dividend Date: This is the date by which you need to own the stock.

Increase Percent: This is the amount by which the dividend is being increased.

Streak Category: This is the overall dividend history classification of the company.

Show Me The Money

I received several requests to show the old and new rates, so here are those figures. It also reiterates the increase percentage. This table is sorted the same way as the first table (ex-dividend day ascending, dividend streak descending).

Ticker Old Rate New Rate Increase Percent
ERIE 0.84 0.9 7.14%
ACU 0.11 0.12 9.09%
PFBC 0.25 0.3 20.00%
ROP 0.4125 0.463 12.38%
MA 0.25 0.33 32.00%
T 0.5 0.51 2.00%
LNC 0.33 0.37 12.12%
HRL 0.1875 0.21 11.70%

Additional Metrics

Here are some additional metrics related to these companies, including yearly pricing action and the P/E ratio. This table is sorted in exactly the same way as the table above. The value investor may find stock ideas with those companies near their 52-week low. They may provide a larger margin of safety and inflated yield.

Ticker Current Price 52 Week Low 52 Week High PE Ratio % Off Low % Off High
ERIE 129.91 106.63 147.17 26.42 22% Off Low 12% Off High
ACU 14.95 13.5 24.98 16.06 11% Off Low 40% Off High
PFBC 43.91 39.87 69.48 11.13 10% Off Low 37% Off High
ROP 266.66 245.59 312.65 24.55 9% Off Low 15% Off High
MA 189.73 151.12 225.35 38.42 26% Off Low 16% Off High
T 29.54 26.8 39.29 5.58 10% Off Low 25% Off High
LNC 51.59 48.07 86.68 5.53 7% Off Low 40% Off High
HRL 41.37 31.71 46.26 22.11 30% Off Low 11% Off High

Tickers By Yield (With Growth Rates)

Some investors are more interested in current yield, so this table is sorted descending by yield. This also includes some of the historical dividend growth rates as a bonus. Additionally, the "Chowder Rule" has been included (the current yield + 5-year dividend growth rate). That is the current yield, plus the 5-year dividend growth rate.

Ticker Yield 1 Yr DG 3 Yr DG 5 Yr DG 10 Yr DG Chowder Rule
T 6.91 2.1 2.1 2.2 3.3 9.4
ACU 3.37 5 8.4 8.4 10.8 11.8
LNC 2.87 16 21.9 29.4 -3 32.3
ERIE 2.77 7.2 7.2 7.2 6.9 9.9
PFBC 2.73 33.3 100 2.5
HRL 2.03 17.2 19.3 17.8 16.3 19.8
MA 0.7 15.8 26 53 32.2 53.7
ROP 0.69 16.7 20.5 20.5 18.3 21.2

Bonus Charts

Dividend King Hormel gets the spotlight this week. With another double digit raise (11%) and 53+ years of consecutive dividend growth, Hormel has been rewarding investors for decades. This has been a bright spot in the packaged food industry which has really struggled over the past year. Consumer tastes are changing and Hormel has been successfully changing with it.

From Fast Graphs, there was some opportunity in the back end of 2017 where shares were trading around the $30 level. I remember some investors here on SA pounding the table for the stock at that time and they were proven right. Not only did shares jump back over $40 but you would have had a higher than historical average dividend yield.

Running a stock return calculation versus the S&P since January of 2010, shares have crushed the market, returning nearly 20% per year. That includes a dividend amount that was also 40% higher than that offered by the S&P. A $10,0000 investment would have turned into over $50,000 versus $26,000 on the S&P. Dividends would have also beaten the market even given the chronic low current yield.

Returns of Hormel were pegged fairly closely to the market until late 2015 when the real separation began to occur. The gap closed up briefly during the late 2017 time period referenced earlier. Since then, the gap has opened back up.

(Courtesy: Custom Stock Alerts)

Conclusion

I hope you are able to find this information valuable. Let me know if you want to see additional data points or what may help make this more useful.

As always, do your due diligence on any stock before buying or selling.

Disclosure: I am/we are long T, MA. 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.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.