All stocks have at least five fiscal years of dividend growth history and come from the U.S. Dividend Champions List.
Nine increases for next week (down from 28 last week).
An average increase of 8.68%, median increase of 6.45%, and four with an increase of at least 10%.
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.
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
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|
|FNF Group of Fidelity National Financial, Inc.||(FNF)||8||2.79||16-Dec-19||6.45%||Challenger|
|Universal Health Realty Income Trust||(UHT)||34||2.31||17-Dec-19||0.74%||Champion|
|J & J Snack Foods Corp.||(JJSF)||15||1.23||19-Dec-19||15.00%||Contender|
|Air Lease Corporation Class A||(AL)||8||1.29||19-Dec-19||15.38%||Challenger|
|Agree Realty Corporation||(ADC)||7||3.3||19-Dec-19||2.63%||Challenger|
|Marriott Vacations Worldwide Corporation||(VAC)||6||1.72||20-Dec-19||20.00%||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 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|
|ECL||185.21||135.77||209.87||35.81||36% Off Low||11% Off High|
|HI||32.49||26.01||46||17.12||22% Off Low||29% Off High|
|FNF||47.31||29.5||48.4||17.04||60% Off Low||2% Off High|
|UHT||118.69||58.7||123.84||95.59||102% Off Low||2% Off High|
|AAN||57.9||39.28||78.65||20.29||46% Off Low||26% Off High|
|JJSF||187.1||138.4||196.84||37.75||33% Off Low||5% Off High|
|AL||46.64||28.13||47.54||9.54||64% Off Low||1% Off High|
|ADC||70.84||56.46||79.54||40.7||25% Off Low||9% Off High|
|VAC||125.68||60.68||126.4||53.67||105% Off Low||0% 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|
As we wind down the year, the last few dividend increases are coming through. The one company on the list that jumped out to me was Ecolab. It is a Dividend Champion with its 27 years of dividend increases. The current raise of 2.2% is a little lackluster, but let's take a closer look.
One thing that jumped out was that the stock has visited a few interesting places during the year. Off the trough at the end of 2018, shares jumped from $135 to nearly $210 back in September. They've since slipped back to the mid $180 range.
Much like the rest of the broader market, shares of Ecolab have done extremely well since coming out of the recession. Earnings growth has actually been quite solid in the low double digits for several years over the time frame. That has also led to the multiple expansion seen up to the recent peak of over 36x earnings. That seems quite expensive to me and I'm not surprised that the recent pullback has brought them back closer to around 30x earnings.
Shares sport an A- credit rating and about a 1% yield. I'll get into some yield analysis in a minute, but this is not a current income play by any means. Looking forward, analysts are projecting growth to look about the same as the past, 12% for 2020 and 9% for 2021.
I'll reiterate that shares still seem expensive, but so do most these days. The average P/E over the time frame is a modest 26, so that may be a reasonable entry point when we get back to it.
Ecolab has never really been a yield story as evidenced by just looking at the dividend yield chart over the past decade.
Just glancing at the chart, whenever shares are at or under 1%, they seem expensive. Whenever shares pull back to above 1.25% or so, they seem reasonably valued. Above 1.3% is getting into value territory for the company as it's only hit 1.4% briefly during the past decade.
Next let's move over to the Simply Safe Dividend scores analysis.
Like many of the companies that I've highlighted, Ecolab scores incredibly well in both the safety and the growth categories. That comes at the expense of current yield.
What actually threw me is how well its dividend growth has been. Over the past 20 years, it's averaged an 11.4% dividend increase which is incredible. Now - and a big caveat - the 2% hike this time around is in fact a fluke. There was a press release that the increase is smaller due to an upcoming spin-off of one of its businesses. Prudent management dictates that to maintain its desired payout ratio, this increase will be small.
That does give great confidence that management is knowledgeable and will stick to desired ratios to keep the dividend safely covered. So while this increase was smaller than usual, keep in mind this is the best thing to do for long-term investors.
I ran a stock return calculation comparing ECL to the S&P (SPY) since this time in 2010.Ecolab beat the market by about 3.25% per year, which compounds into a much larger difference of 317% to 199% total return since 2010.
The dividends received were still smaller by the S&P, but they seem poised to pass them in a few years time. Remember it takes much more dividend growth coming off a low yield base to pass a higher starting yield.
Here's the look at the investments over time:
- ECL is the black line.
- SPY is the blue line
This was pretty much Ecolab's story the entire investing time period. It took an early lead and never looked back. The most recent peak showed the most separation from the S&P, but even after the pullback, shares are still dramatically outperforming.
(Source: Custom Stock Alerts)
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!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.