22 Upcoming Dividend Increases Boosted By Nike And McDonald's

Nov. 21, 2019 12:34 PM ETAEL, ASB, AYR, DHI, DHIL, DLB, EL, EVRG, FMBH, GFF, HII, HUBB, LMT, NBTB, POWI, SBSI, SCL, SIX, TSN, WEN, MCD, NKE8 Comments17 Likes
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Dividend Derek
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Summary

  • All stocks have at least five fiscal years of dividend growth history and come from the U.S. Dividend Champions List.
  • 22 increases for next week (up from 12 last week).
  • An average increase of 10.15%, median increase of 9.84%, and 11 with an increase of at least 10%.

Introduction

This article series is designed to keep investors informed of upcoming dividend increases. For dividend growth investors, this can be an opportunity to start or add to positions prior to a new increased payout. This can be especially important for retirees who live on dividend checks.

The lists I've compiled provide various stats for the stocks that are increasing their dividends next week.

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 Champions" 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.

As a point of clarification, companies are included that may not raise their dividend every calendar year, but the total annual dividend received will still be higher each year. One such example is Bank of America (BAC).

In the table here on SA, the annual dividend payout received by a shareholder increased for each year in this time frame. Thus, it is eligible for inclusion in the "CCC" list.

That said, it did pay out the same amount for eight quarters in a row, but again, the total annual amount increased each year.

United Technologies (UTX) is another example.

What Is the Ex-Dividend Date?

The "ex-dividend" date is the date 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 is 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 2
Contender 6
Challenger 13

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
American Equity Investment Life Holding Company (AEL) 15 0.98 27-Nov-18 7.69% Contender
Dolby Laboratories (DLB) 5 1.09 25-Nov-19 15.79% Challenger
Southside Bancshares, Inc. (SBSI) 25 3.54 26-Nov-19 9.68% Champion
Evergy, Inc. (EVRG) 14 2.92 26-Nov-19 6.32% Contender
Griffon Corporation (GFF) 8 1.32 26-Nov-19 4.17% Challenger
D.R. Horton, Inc. (DHI) 5 1.1 26-Nov-19 16.67% Challenger
Stepan Company (SCL) 51 1.13 27-Nov-19 10.00% King
Hubbell Inc (HUBB) 11 2.3 27-Nov-19 8.33% Contender
Estee Lauder Companies, Inc. (The) (EL) 9 0.88 27-Nov-19 11.63% Challenger
Six Flags Entertainment Corporation New (SIX) 9 7.11 27-Nov-19 1.22% Challenger
First Mid Bancshares, Inc. (FMBH) 8 2.07 27-Nov-19 11.11% Challenger
Aircastle Limited (AYR) 8 3.71 27-Nov-19 6.67% Challenger
Power Integrations, Inc. (POWI) 7 0.75 27-Nov-19 11.76% Challenger
Tyson Foods, Inc. (TSN) 7 1.66 27-Nov-19 12.00% Challenger
Huntington Ingalls Industries, Inc. (HII) 7 1.35 27-Nov-19 19.77% Challenger
NBT Bancorp Inc. (NBTB) 6 2.59 27-Nov-19 3.85% Challenger
McDonald's Corporation (MCD) 43 2.58 29-Nov-19 7.76% Champion
Lockheed Martin Corporation (LMT) 17 2.45 29-Nov-19 9.09% Contender
Nike, Inc. (NKE) 17 0.95 29-Nov-19 11.36% Contender
Wendy's Company (The) (WEN) 10 2.32 29-Nov-19 20.00% Contender
Associated Banc-Corp (ASB) 7 3.16 29-Nov-19 5.88% Challenger
Diamond Hill Investment Group, Inc. - Class A Common Stock (DHIL) 5 6.18 29-Nov-19 12.50% Challenger

Field Definitions

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
AEL 0.26 0.28 7.69%
DLB 0.19 0.22 15.79%
SBSI 0.32 0.34 9.68%
EVRG 0.475 0.505 6.32%
GFF 0.073 0.075 4.17%
DHI 0.15 0.175 16.67%
SCL 0.25 0.275 10.00%
HUBB 0.84 0.91 8.33%
EL 0.43 0.48 11.63%
SIX 0.82 0.83 1.22%
FMBH 0.36 0.4 11.11%
AYR 0.3 0.32 6.67%
POWI 0.16 0.19 11.76%
TSN 0.375 0.42 12.00%
HII 0.86 1.03 19.77%
NBTB 0.26 0.27 3.85%
MCD 1.16 1.25 7.76%
LMT 2.2 2.4 9.09%
NKE 0.22 0.245 11.36%
WEN 0.085 0.12 20.00%
ASB 0.17 0.18 5.88%
DHIL 8 9 12.50%

Additional Metrics

Here are some additional metrics related to these companies, including yearly pricing action and the P/E ratio. This table is sorted the same way as the table above. The value investor may find stock ideas with those companies near their 52-week lows. 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
AEL 28.61 20.16 34.74 32.65 39% Off Low 17% Off High
DLB 69.95 56.09 71.77 28.61 24% Off Low 2% Off High
SBSI 35.01 29.71 35.97 16.16 17% Off Low 1% Off High
EVRG 64.97 54.57 67.81 24.93 18% Off Low 4% Off High
GFF 22.02 9.65 25.5 25.53 126% Off Low 12% Off High
DHI 54.54 32.39 55.67 12.6 67% Off Low 1% Off High
SCL 97.51 69.17 101.84 21.24 41% Off Low 3% Off High
HUBB 146.2 91.88 149.31 21.01 58% Off Low 1% Off High
EL 195.28 121.47 207.5 38.48 58% Off Low 5% Off High
SIX 46.1 40.72 64.28 14.53 12% Off Low 27% Off High
FMBH 34.82 30.2 37.42 12.81 15% Off Low 5% Off High
AYR 32.38 15.75 32.47 11.46 105% Off Low 0% Off High
POWI 90.14 55.8 102.38 46.65 61% Off Low 10% Off High
TSN 90.6 49.77 94.11 16.59 81% Off Low 3% Off High
HII 254.06 173.8 260.81 17.62 45% Off Low 1% Off High
NBTB 40.2 30.36 40.93 14.76 32% Off Low 1% Off High
MCD 194.12 169.04 221.93 25.4 14% Off Low 12% Off High
LMT 392.6 241.18 399.96 18.57 62% Off Low 2% Off High
NKE 93.02 66.53 96.87 34.99 39% Off Low 3% Off High
WEN 20.72 14.96 22.84 37.7 38% Off Low 9% Off High
ASB 21.49 18.52 23.84 10.84 15% Off Low 9% Off High
DHIL 145.44 124.57 170.19 11.09 17% Off Low 13% Off High

Tickers by Yield and 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
SIX 7.11 12.9 13.9 11.7 19
AYR 3.71 7.5 8.2 10.4 -2.4 15.4
SBSI 3.54 11.4 12.8 12.1 13.7 15.6
ASB 3.16 24 14.8 13.4 -6.9 16.7
EVRG 2.92 9.8 6.7 5 4.3 8
NBTB 2.59 7.6 4.4 3.3 2.2 6.1
MCD 2.58 9.4 6.8 6.1 9.9 8.6
LMT 2.45 9.9 10.1 11.4 16.2 14
WEN 2.32 21.4 14.8 13.6 2.9 15.8
HUBB 2.3 9.8 12 11.2 8.8 13.6
FMBH 2.07 9.1 6.9 9.4 6.6 11.5
TSN 1.66 30.8 41.5 41.5 23.1 43.4
HII 1.35 19.8 21.1 43.3 44.9
GFF 1.32 12.8 18.4 21.8 23.2
SCL 1.13 10.1 8.2 7.3 8.1 8.5
DHI 1.1 23.5 25.2 4.5
DLB 1.09 15.5 16.8
AEL 0.98 7.7 8.4 9.2 14.9 10.3
NKE 0.95 11.1 12.6 13.8 13 14.8
EL 0.88 12.1 15.5 16.2 19 17.1
POWI 0.75 14.3 10.1 14.9 38.3 15.7
DHIL 0 14.3 17 21.7 -2.2 21.7

Bonus

I want to cover both Nike and McDonald's briefly this week. These two giants are not only some of the most popular companies here on Seeking Alpha, but also each has a very nice dividend growth story going on.

Nike delivered an 11.4% increase and McDonald's a 7.8% increase. Starting with Nike and its historical performance, there is a nice steady uptick in earnings per share year after year. 2018 was a slight misstep for growth, but looking forward, analysts are expecting double-digit growth as it pivots from building out its own e-commerce presence.

I won't say shares are cheap today; there is a lot of growth priced in at 34x earnings today. The blue line is the average P/E over the time frame and you can see how north of 23x earnings the current share price is. If the company is able to consistently hit those high-double-digit earnings growth estimates, shares don't appear to be violently mispriced. Of course - be aware that should it miss, expect the stock to move downwards.

If the companies were hidden, both of these charts look similar. McDonald's has grown its earnings consistently over the past decade with several years sporting mid-teen earnings growth per year. The stock itself has been granted a higher P/E ratio over time (much like most of the stock market these days). The recent ouster of CEO Steve Easterbrook leaves a little uncertainty in the near term, but shares seem a bit more reasonably valued after dropping from the recent peak of $220. Earnings growth for 2019 and the next two years also seems a little muted compared to the recent past.

(Source: F.A.S.T. Graphs)

As we move from the Fast Graph over to the scorecard from Simply Safe Dividends, Nike sports some impressive stats.

Nike scores incredibly well with both dividend safety and growth at the expense of current yield. The dividend is incredibly safe and growing fast though it is always off a low yield base.

Nike has put up 10-14% annual dividend increases for over 17 years now. There appears to be no reason for a slowdown anytime soon as the payout ratio is still in the low 30% range.

It's hard to find a good time to buy Nike as it always seems expensive - though the reasons are good. One idea I'm keeping tabs on is when the dividend yield hits about 1.2%.

Over the past five years, it has spent a little bit of time above that mark and that has historically seemed to be a good entry point. Even pulling out towards the tail end of the recession, shares only briefly went over 2%.

Switching gears to taking a look at McDonald's, it has the signs of a more mature dividend paying company (independent of the 44-year growth history).

McDonald's is more of an income play for most investors and its payout ratio tends to be in around the 60% range. It scores well with a dividend safety of 77 though growth is a bit slower at 29. The slowest time period is its five-year average of 6%, but even that is both inflation beating and no slouch where shares were five years ago.

Its yield is now middle of the pack and that is more a function of where shares sit and how much they've been bid up over the past several years. Management needs to ensure that it is continuing to grow its earnings by share by at least 8-9% to ensure it has ample room to continue increasing its dividend in the 7-9% range annually.

Looking at the 10-year chart of its dividend yield, it shouldn't be a surprise we are near historical lows; albeit it has picked up since dropping to nearly 2% last month. For me, my interest would pick up once it hits 3% once more.

I personally like to look for companies that have a combined score >= 200; Nike currently is at 192 and McDonald's 151. Both in particular are being dinged on their yield score due to their popularity in this market environment.

The last data point I'll highlight is the buyback story each company is undertaking. Over the past 10 years, Nike has retired close to 20% of its shares while McDonald's has retired 30%! As a long-term holder, it is beautiful to own a larger and larger chunk of the company as time goes on.

Stock Returns

I ran a stock return calculation comparing NKE and MCD to the S&P (SPY) since this time in 2010.

Both Nike and McDonald's beat the S&P over the time frame though Nike did it in much bigger fashion. Nike returned nearly 19% per year versus the 13.85% for McDonald's and the 13.36% for the S&P.

Here's the look at the investments over time:

  • MCD is the black line.
  • NKE is the blue line
  • SPY is the green line.

Nike over the time was the best performer, and it's pretty evident following the blue line. McDonald's meandered around the performance of the S&P so it really depended when you may have bought shares as to your actual results.

(Source: Custom Stock Alerts)

Conclusion

I hope you 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!

This article was written by

Dividend Derek profile picture
22.28K Followers
Derek is an individual investor seeking to navigate the investment world to provide a wealthy and stable retirement for his family. He aims to help fellow investors, notably younger investors, establish a plan to produce a growing income stream. Derek holds a Bachelor's degree in Computer Science with a minor in Economics from the University of Delaware and lives with his wife and two children.Derek created and operates customstockalerts.com. It's a suite of utilities for investors to stay on top of all their stocks. Pick a company you're interested in, pick an alert type (price, dividend yield, PE, etc.) and a value. You'll get a text or email (your choice) when your value hits. Also, get alerts for upcoming dividends, including increases (works for stocks and ETFs). Use it as a chance to buy and collect the dividend!Come check me out at customstockalerts.com!
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Disclosure: I am/we are long NKE. 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.

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