All stocks have at least five fiscal years of dividend growth history and come from the U.S. Dividend Champions List.
Eight increases for next week (down from 26 last week).
An average increase of 3.93%, median increase of 3.54%, and none with an increase of at least 10%.
Two dividend champions - Consolidated Edison and AFLAC - have their yearly increases starting next week.
Friendly reminder the market is closed Monday February 17th - anything going ex-dividend on Tuesday you must own by market close Friday.
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 (NYSE: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|
|Consolidated Edison, Inc.||(ED)||46||3.29||18-Feb-20||3.38%||Champion|
|Marathon Petroleum Corporation||(MPC)||10||3.93||18-Feb-20||9.43%||Contender|
|CenterPoint Energy, Inc. (Holding Co)||(CNP)||14||4.28||19-Feb-20||1.05%||Contender|
|Microchip Technology Incorporated||(MCHP)||18||1.34||20-Feb-20||0.14%||Contender|
|ONE Gas, Inc.||(OGS)||7||2.3||20-Feb-20||8.00%||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|
|ED||92.87||77.21||95.1||21.87||20% Off Low||2% Off High|
|AFL||52.41||48.14||57.18||11.95||9% Off Low||7% Off High|
|MPC||58.97||43.96||69.65||13.78||31% Off Low||15% Off High|
|CNP||27.13||24.25||31.42||21.2||11% Off Low||13% Off High|
|MCHP||109.76||77.66||112.47||41.96||41% Off Low||1% Off High|
|AVA||51.16||39.75||51.59||17.57||28% Off Low||1% Off High|
|HWKN||42.39||32.79||47.94||16.27||29% Off Low||11% Off High|
|OGS||93.91||79.22||96.66||27.89||17% Off Low||3% 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|
I'll take a quick look at both Consolidated Edison and AFLAC this week since they are dividend champions. ConEd has a dividend increase streak over 46 years and AFLAC at 37. Both of their increases are in the 3-4% range this time around.
I'll start with a quick analysis of ConEd via its FastGraph. A few things pop out to me when I look over its chart. The first thing is the general acceleration in stock price away from its earnings growth. A decade ago, the stock traded in the range of a 12-14 P/E ratio. Today it sits over 21, unfortunately that has a nasty side effect of driving the yield down all else equal. That effect is seen with the generally declining reddish line from the peak around 6% during the recession to the current value in the low 3% range. Even in 2013/2014, a mid 4% yield was achievable. Now if you've owned during that time frame you've actually seen a very nice return, something like 10-12% annually for a "boring" utility. Also sports an A- credit rating to boot.
AFLAC is another interesting company for a few reasons. The earnings growth really hasn't been there since the recession; there was a big boost in 2018 because of the corporate tax overhaul, but that was a one-time event. The stock doesn't garner much market premium - it can be argued it is overvalued today, but the P/E is still under 12. From a dividend yield perspective, it is about as low as it's been in some time; there was a blip in 2017 when it was in the low 2% range also. That said, it has low amounts of debt and an A- credit rating.
Here are the aggregate stats from earlier just filtered down to these two companies. With ConEd, you can pretty much bank on that 3-ish percent annual raise. AFLAC is a little lumpier recently with smaller raises, but its longer-term average is around 7-9%.
|Ticker||Yield||1 Yr DG||3 Yr DG||5 Yr DG||10 Yr DG||Chowder Rule|
From the new and improved Simply Safe Dividends site, here are some high level stats for both.
The dividend is well covered and is safe according to the universe of dividend stocks. As noted, the yield is near an all-time low and the beta is incredible low at 0.14.
AFLAC has a similar story, about an all-time low yield though the dividend is incredibly safe and is scored as a 99. The beta is higher than ConEd, but at 0.73 moves much less than the S&P as a whole.
I ran a stock return calculation comparing ED and AFL to both the S&P and VPU (Vanguard Utility ETF) since this time in 2010.I don't think the S&P is as fair of a comparison because the yield is generally lower than these holdings and moves much quicker in either direction. In any event, VPU was chosen to mimic that lower beta and higher-yielding alternative. Naturally the S&P won in absolute terms, but look at how well both VPU and ED did (272% S&P, 247% VPU and 220% ED). I highlighted above how a low-beta company like ED can do incredibly well over time with steady dividend reinvestment and a raising P/E ratio. Understandably, the dividends received from VPU and ED were much higher than the market while AFLAC's actually lagged.
Here's a look at the investments over time:
- ED is the blue line.
- AFL is the black line
- SPY is the green line
- VPU is the orange line
As noted above, VPU, ED and SPY all generally moved fairly close to one another and AFL was notably well behind over the whole time frame.I did one more comparison and made the time frame 5 years rather than 10.
The investment results changed and AFLAC was the winner over the past five years. The S&P was nearly the laggard though ConEd finished just behind them.
(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.