This article series helps to keep investors informed of upcoming dividend increases. We put a spotlight on companies that can increase payouts year after year. For investors, this can be an opportunity to start or add to positions before an increased payout. In addition, dividend increase notifications can be essential 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.
I created the information below 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.
Companies are required to have higher total dividends paid out each year. Therefore, a company may not raise its dividend in each calendar year, but the total annual dividend can still increase. Here's an example showing increasing total payments each year, but with the same dividend amount over eight consecutive quarters.
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. For example, if the date is a Tuesday, you need to have purchased (or already owned) shares by the 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.
Here are the definitions of the streak categories, as I'll be using them throughout the piece.
Data has been sorted by the ex-dividend day (ascending) and then by the streak (descending):
|Name||Ticker||Streak||Forward Yield||Ex-Div Date||Increase Percent||Streak Category|
|1st Source Corporation||(SRCE)||34||2.52||3-May-21||3.45%||Champion|
|Constellation Brands, Inc.||(STZ)||6||1.28||3-May-21||1.33%||Challenger|
|NextEra Energy Partners||(NEP)||8||3.43||5-May-21||3.58%||Challenger|
|Artesian Resources Corporation - Class A Non-Voting...||(ARTNA)||28||2.64||6-May-21||1.52%||Champion|
|J.B. Hunt Transport Services, Inc.||(JBHT)||18||0.71||6-May-21||11.11%||Contender|
|Premier Financial Corp.||(PFC)||11||3.27||6-May-21||8.33%||Contender|
|Lithia Motors, Inc.||(LAD)||11||0.35||6-May-21||12.90%||Contender|
|Franklin Financial Services Corporation||(FRAF)||6||4.1||6-May-21||3.33%||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: The percent increase.
Streak Category: This is the overall dividend history classification of the company.
Here's a table mapping the new rates versus the old rates. It also reiterates the percentage increase. 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 different metrics related to these companies, including yearly pricing action and the P/E ratio. The table is sorted the same way as the table above. A value investor may find stock ideas with those companies near their 52-week lows as they could provide more margin of safety and inflated yield.
|Ticker||Current Price||52 Week Low||52 Week High||PE Ratio||% Off Low||% Off High|
|SRCE||47.55||26.08||50.38||12.6||82% Off Low||6% Off High|
|STZ||237.87||148.78||242.62||42.82||60% Off Low||2% Off High|
|CATC||85.63||42.97||86.91||16.28||99% Off Low||1% Off High|
|NEP||74.36||41.4||87.66||0||80% Off Low||15% Off High|
|ARTNA||39.45||31.24||42.7||21.68||26% Off Low||8% Off High|
|JBHT||168.88||94.71||178.4||29.84||78% Off Low||5% Off High|
|PFC||31.78||12.79||35.9||15.47||148% Off Low||11% Off High|
|LAD||395.47||85.62||417.98||19.44||362% Off Low||5% Off High|
|FRAF||30.25||19.14||34.38||9.03||58% Off Low||12% Off High|
Some investors are more interested in the current yield, so this table is sorted descending by yield. The table also includes some of the historical dividend growth rates as a bonus. Additionally, the "Chowder Rule" has been included, the current yield + five-year dividend growth rate.
|Ticker||Yield||1 Yr DG||3 Yr DG||5 Yr DG||10 Yr DG||Chowder Rule|
We have nine companies offering increases this week versus the two last week. In addition, we have some dividend champions in 1st Source Corporation and Artesian Resources Corporation with their 25+ year history. On the flip side, we have some newer growers; Constellation Brands, best known for Corona beer, and Franklin Financial Services.
I entered all the companies alongside the S&P into my stock return calculator to view hypothetical returns going back to 2014 based on the IPO of NEP. I like to see which dividend growth companies provide better returns than the market because many do.
With this truncated period, Lithia Motors had the best return story. They averaged nearly a 25% gain for a rocking 355% total return in less than seven years. There were other big winners in STZ, NEP, and PFC, which all beat the S&P (about 14% annualized).
FRAF and NEP were at the top of the group in providing income to investors (around $3,700 in this example). That amount was double what the S&P would provide.
NEP stands out as both an income-generating leader and a total return leader among this group.
Viewing the returns over time, the sea-foam green line of LAD was the big winner, but most of those returns have come over the past year! So seeing a final picture doesn't paint much of a story. STZ and PFC were among the better leaders for most of the time horizon. In fact, NEP was a laggard for much of the time and saw a lot of recovery growth in the past year, similar to LAD.
As always, do your due diligence on any stock before buying or selling. Happy investing!
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This article was written by
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.