Dividend Increases: July 1-12, 2019

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Includes: CMI, DAL, DUK, EPD, FAST, MSM, OXY, OZK, PNC, R, TGE, WBA
by: FerdiS
Summary

In the past two weeks, several companies declared dividend increases. I'm happy to say I own stock in two of these companies.

I like monitoring dividend increase announcements as it helps me identify candidates for further analysis.

Four are double-digit percentage increases!

I monitor dividend increases for stocks on my watch list of dividend growth stocks to identify candidates for further analysis. Companies that regularly increase their dividends show confidence in the potential growth of future earnings.

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

Recently, 12 companies that decided to increase their dividends passed these screens, including two of the stocks I hold in my portfolio.

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 five-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 1-12, 2019

Previous Post: Dividend Increases: June 24-28, 2019

PNC Financial Services (PNC)

Founded in 1922, PNC is a diversified financial services company headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, corporate and institutional banking, asset management, and residential mortgage banking, providing its products and services nationally, but mainly in the eastern United States.

The company's board of directors approved an increase in the quarterly dividend of 21.05% to $1.15 per share. All shareholders of record on July 19 can expect the dividend to be paid on August 5.

MSC Industrial Direct (MSM)

Founded in 1941 and headquartered in Melville, New York, MSM is a direct marketer and distributor of a range of metalworking and maintenance, repair, and operations products and services throughout the United States. MSM serves customers primarily through its distribution network of branch offices and customer fulfillment centers.

Recently, MSM increased its quarterly dividend to 75¢ per share, an increase of 19.05% over the prior dividend of 63¢ per share. The dividend is payable on August 6 to shareholders of record on July 23. The stock will trade ex-dividend on July 22.

Cummins (CMI)

Founded in 1919 and headquartered in Columbus, Indiana, CMI is one of the leading designers and manufacturers of diesel engines. The company also produces natural gas engines and engine components and subsystems. CMI sells its products to original equipment manufacturers, distributors, and other customers worldwide.

Recently, CMI increased its quarterly dividend to $1.311 per share, an increase of 15.00% over the prior dividend of $1.14 per share. The dividend is payable on September 3 to shareholders of record at the close of business on August 21.

Delta Air Lines (DAL)

DAL provides scheduled air transportation for passengers and cargo in the United States and internationally. The company also provides aircraft maintenance, repair, and overhaul services, and staffing, aviation, and professional security and training services to third parties. DAL was founded in 1924 and is headquartered in Atlanta, Georgia.

The company announced an increase of its quarterly dividend of 15.00% to 40.25¢ per share. The new dividend is payable on August 15 to shareholders of record on July 25. The ex-dividend date will be July 24.

Bank OZK (OZK)

Founded in 1981 and headquartered in Little Rock, Arkansas, OZK provides deposit services, loan products, mortgage lending, treasury management services, and trust and wealth management services. OZK serves businesses, individuals, and non-profit and governmental entities in Arkansas, Georgia, North and South Carolina, Texas, Florida, Alabama, New York, and California.

The board of directors of OZK has declared a quarterly dividend of 24¢ per share. The new dividend is 4.35% above the prior dividend of 23¢ per share. The dividend is payable on July 19 to shareholders of record on July 12. The ex-dividend date is July 11.

Walgreens Boots Alliance (WBA)

WBA operates a network of drugstores in the United States. The company sells prescription and non-prescription drugs as well as general merchandise products, including household items, convenience and fresh foods, personal and beauty care products, and photofinishing services. WBA was founded in 1901 and is based in Deerfield, Illinois.

The company announced an increase of its quarterly dividend of 3.98% to 45.75¢ per share. The dividend is payable on September 12 to shareholders of record on August 20. WBA will trade ex-dividend on August 19.

Ryder System (R)

Founded in 1933 and based in Miami, Florida, R provides commercial fleet management and supply chain solutions to small businesses and large enterprises worldwide. Product offerings range from full-service leasing, commercial rental and programmed maintenance of vehicles to integrated services such as dedicated contract carriage and carrier management. Additionally, R offers comprehensive supply chain solutions, lead logistics management services, and e-commerce solutions.

The company announced a quarterly DIV increase of 3.70% to 56¢ per share. R will trade ex-dividend on August 16. The dividend is payable on September 20 to shareholders of record on August 19.

Fastenal (FAST)

FAST sells industrial and construction supplies, including threaded fasteners such as bolts, nuts, screws, studs, and related washers, in the United States, Canada, and internationally. It distributes the supplies through a network of company-owned stores. Customers are in the manufacturing and non-residential construction markets. FAST was founded in 1967 and is headquartered in Winona, Minnesota.

The company declared a quarterly dividend of 22¢ per share, an increase of 2.33% over the prior quarterly dividend. FAST will trade ex-dividend on July 24. The dividend is payable on August 22 to shareholders of record on July 25.

Duke Energy (DUK)

Incorporated in 2005 and headquartered in Charlotte, North Caroline, DUK is an energy company that operates through direct and indirect subsidiaries. The company's Electric Utilities and Infrastructure segment provides electricity to customers in the Southeast and Midwest regions of the United States. DUK's other segments are Gas Utilities and Infrastructure, and Commercial Renewables.

On July 8, the board of directors declared a quarterly dividend of 94.50¢ per share. The new dividend represents an increase of 1.89%. The dividend is payable on September 16 to shareholders of record on August 16.

Tallgrass Energy (TGE)

TGE, through its subsidiaries, provides crude oil transportation services to customers in Wyoming, Colorado, Kansas, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation, Crude Oil Transportation, and Gathering, Processing & Terminalling. TGE was founded in 2012 and is based in Leawood, Kansas.

The company announced an increase of its quarterly dividend of 1.89% to 54¢ per share. The ex-dividend date is July 30 and the dividend will be paid on August 14 to shareholders of record on July 31.

Occidental Petroleum (OXY)

Founded in 1920 and headquartered in Houston, Texas, OXY 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, develops and produces oil and condensate, natural gas liquids (NGLs), and natural gas. The Chemical segment manufactures and markets basic chemicals and vinyl. The Midstream and Marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power.

Recently, OXY increased its quarterly dividend by 1.28% to 79¢ per share. All shareholders of record on September 10 can expect the dividend to be paid on October 15.

Enterprise Products Partners (EPD)

Founded in 1968 and based in Houston, Texas, EPD provides midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, petrochemicals, and refined products. EPD operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services.

Recently, EPD increased its quarterly dividend by 0.57% to 44¢ per share. The quarterly dividend will be paid on August 13 to shareholders of record on July 31. The ex-dividend date is July 30.

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, PNC, CMI, and OZK.

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).

PNC's price line (black) is below 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 PNC in January 2010 would have returned 12.3% on an annualized basis (with dividends included).

CMI'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 CMI in January 2010 would have returned 16.5% on an annualized basis (with dividends included).

OZK's price line is below the primary valuation line and below the stock's normal P/E ratio. The stock is trading at a discount to fair value. An investment in OZK in January 2010 would have returned 17.5% 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.

Summary of Upcoming Ex-Dividend Dates: July 9-22, 2019

Company

Ticker

Yield

Recent

Price

Yrs

5-Yr

DGR

Next

Div.

Ex-Div

Date

Pay- able

Date

Saul Centers

BFS

3.86%

$54.87

6

7.60%

$2.12

07/16

07/31

First Busey

BUSE

3.24%

$25.96

6

10.80%

$0.84

07/18

07/26

Caterpillar

CAT

2.95%

$139.79

26

7.00%

$4.12

07/19

08/20

Cracker Barrel Old Country Store

CBRL

2.92%

$178.15

17

14.40%

$5.20

07/18

08/05

Colgate-Palmolive

CL

2.32%

$74.07

56

4.50%

$1.72

07/17

08/15

Delta Air Lines

DAL

2.62%

$61.38

6

61.30%

$1.61

07/24

08/15

Fastenal

FAST

2.84%

$30.96

20

14.00%

$0.88

07/24

08/22

Foot Locker

FL

3.61%

$42.14

9

11.50%

$1.52

07/18

08/02

GEO

GEO

10.28%

$18.67

8

6.60%

$1.92

07/18

07/26

Graco

GGG

1.27%

$50.51

22

9.60%

$0.64

07/19

08/07

Lakeland Financial

LKFN

2.66%

$45.19

8

15.20%

$1.20

07/24

08/05

Lowe's

LOW

2.04%

$107.71

56

21.20%

$2.20

07/23

08/07

Main Street Capital

MAIN

5.78%

$42.59

9

4.30%

$2.46

07/17

08/15

McGrath RentCorp

MGRC

2.30%

$65.13

27

6.00%

$1.50

07/16

07/31

MSC Industrial Direct

MSM

4.16%

$72.06

16

14.00%

$3.00

07/22

08/06

Oracle

ORCL

1.62%

$59.40

11

12.60%

$0.96

07/16

07/31

Oxford Industries

OXM

2.13%

$69.37

9

13.30%

$1.48

07/18

08/02

Procter & Gamble

PG

2.59%

$115.30

63

3.70%

$2.98

07/18

08/15

PNC Financial Services

PNC

3.26%

$141.05

8

14.60%

$4.60

07/18

08/05

Pentair

PNR

1.89%

$38.01

43

1.80%

$0.72

07/18

08/02

WD-40

WDFC

1.39%

$175.25

10

11.70%

$2.44

07/18

07/31

Williams-Sonoma

WSM

2.82%

$68.00

14

7.90%

$1.92

07/25

08/30

Thanks for reading and happy investing!

Disclosure: I am/we are long WBA. 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.