I'm a huge fan of dividend growth stocks and hope you are too. If you do, you are in the right place! I've compiled a list of stocks that are increasing their dividends 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 always 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 five-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
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|
|Avery Dennison Corporation||(AVY)||9||2.26||4-Jun-19||11.54%||Challenger|
|Southwest Airlines Company||(LUV)||7||1.45||4-Jun-19||12.50%||Challenger|
|Wellesley Bancorp, Inc.||(WEBK)||5||0.72||4-Jun-19||9.09%||Challenger|
|Flowers Foods, Inc.||(FLO)||17||3.41||6-Jun-19||5.56%||Contender|
|The Travelers Companies, Inc.||(TRV)||15||2.26||7-Jun-19||6.49%||Contender|
|CNO Financial Group, Inc.||(CNO)||7||2.68||7-Jun-19||10.00%||Challenger|
|United Bancorp, Inc.||(UBCP)||6||4.84||7-Jun-19||1.89%||Challenger|
Streak: This is years of dividend growth history sourced from the U.S. Dividend Champions spreadsheet.
Forward Yield: This is the new payout rate divided by the current share price.
Ex-Dividend Date: This is the date before 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
Here's a table mapping the new rates versus the old rates. It also reiterates the increase in 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|
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|
|AVY||102.56||82.89||117||48.13||22% Off Low||12% Off High|
|LUV||49.56||44.28||64.02||11.74||11% Off Low||22% Off High|
|WEBK||33.31||27.74||35.5||14.23||19% Off Low||6% Off High|
|PEP||128.14||99.65||130.9||14.46||27% Off Low||2% Off High|
|FLO||22.32||17.78||23.39||30.32||23% Off Low||4% Off High|
|TRV||145.1||111.08||148.85||14.73||29% Off Low||2% Off High|
|CNO||16.41||13.64||22.54||0||17% Off Low||27% Off High|
|UBCP||11.15||10.25||13.94||13.48||12% Off Low||17% 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, which is the current yield + five-year dividend growth rate.
|Ticker||Yield||1 Yr DG||3 Yr DG||5 Yr DG||10 Yr DG||Chowder Rule|
PepsiCo is the big boy on the list this week. Needing no introduction, this consumer products giant has been increasing its dividend annually for over 46 years now. While the increase of 3% is lower than historical averages, it comes off the tail of the 15% increase in 2018. Not to be taken lightly, the company also sports an excellent A+ credit rating from S&P.
Reviewing the Fast Graph for PepsiCo, shares have always received a premium to the broader market. Even in the belly of the recession, shares still traded around 15x earnings. Since then, that ratio has expanded to today's PE of 22.8x.
Shares do not represent a value today and appear quite fully valued. Compared to their "normal" P/E ratio of 19, shares sit about 20% on top of that. Earnings are expected to actually be flat to slightly negative for the full year which makes this stock look even more expensive.
Looking at the scorecard from Simply Safe Dividends, PepsiCo scores incredibly well in the safety category. It also ranks slightly higher than average in both growth and yield.
As I highlighted above, the 3% increase is definitely lower than any historical time period would suggest.
|Ticker||Yield||1 Yr DG||3 Yr DG||5 Yr DG||10 Yr DG||Chowder Rule|
Running a stock return calculation against the S&P (SPY) since May of 2010, PEP lagged the market (11.47% versus 13.51% annualized). That said, PEP paid out more in dividends, which should not be surprising. There wasn't any particular period that the S&P grew a large lead over PepsiCo. The spread between the two has grown over time, and there doesn't seem to be a particular reason for that to change barring a large recession that causes SPY to reset.
(Courtesy: Custom Stock Alerts)
A low starting yield is the corollary of having an unattractively high stock price. There is little margin of safety for a slow stalwart when buying someone else's expensive shares. Tracking the yield over the past 10 years, there are some clear patterns as to better times to buy. Getting a starting yield around 3.2% offers some margin of safety for the times when the yield drops down in the 2.6-2.8% range. Of course for that transition to occur, you should be sitting on some large capital gains.
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. Happy investing!
Disclosure: I am/we are long TRV. 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.