Dividend Increases: August 28-September 10, 2021

Sep. 12, 2021 9:00 AM ETATRI, COFS, CSWC, FRBSP, FRC, NJR, VZ20 Comments
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FerdiS
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Summary

  • This article series covers dividend changes.
  • A table with relevant data and key statistics of dividend increases is provided.
  • We highlight one of the stocks and present performance, valuation, and earnings charts.

Verizon Wireless Retail Location. Verizon delivers wireless, high-capacity fiber optics and 5G communications.
jetcityimage/iStock Editorial via Getty Images

We monitor dividend announcements for stocks in Dividend Radar, a spreadsheet of stocks with dividend streaks of five years or more. Readers are invited to download the spreadsheet for free. The Dividend Radar spreadsheet separates stocks into categories three categories: Champions (with increase streaks of 25+ years), Contenders (10-24 years), and Challengers (5-9 years).

Source: Created by the author

In the past two weeks, six companies in Dividend Radar declared dividend increases, including one of the stocks I own. No companies announced dividend cuts/suspensions during this time period.

The table below presents a summary of the dividend increases. The table is sorted into sections for Champions, Contenders, and Challengers, and then by the percentage increase, (%Incr). Dividends are annualized and in US$, unless otherwise indicated. Yield is the new dividend yield for a recent price and Yrs are years of consecutive dividend increases.

Summary of Dividend Increases: August 28-September 10, 2021
Previous Post: Dividend Increases: August 21-27, 2021

Source: Created by the authors from data in Dividend Radar.

The following dividend increase data are sorted alphabetically by ticker.

Company descriptions are the author's summary of company descriptions sourced from FinViz.

Atrion Corporation (ATRI)

ATRI develops, manufactures, and sells products for fluid delivery, cardiovascular, and ophthalmology applications worldwide. The company sells its products to physicians, hospitals, clinics, and other treatment centers; and other equipment manufacturers through direct sales personnel, independent sales representatives, and distributors. ATRI was founded in 1944 and is headquartered in Allen, Texas.

  • On Aug 30, ATRI declared a quarterly dividend of $1.95 per share.
  • This is an increase of 11.43% from the prior dividend of $1.75.
  • Payable Sep 30, to shareholders of record on Sept 15; ex-div: Sept 14.

ChoiceOne Financial Services, Inc. (COFS)

COFS is a financial holding company headquartered in Sparta, Michigan, and the parent corporation of ChoiceOne Bank, which operates 34 offices in parts of Kent, Lapeer, Macomb, Muskegon, Newaygo, Ottawa, and St. Clair Counties in Michigan. ChoiceOne Bank offers insurance and investment products through its subsidiary, ChoiceOne Insurance Agencies, Inc.

  • On Aug 30, COFS declared a quarterly dividend of 25¢ per share.
  • This is an increase of 13.64% from the prior dividend of 22¢.
  • Payable Sep 30, to shareholders of record on Sept 15; ex-div: Sept 14.

Capital Southwest (CSWC)

CSWC is a business development company specializing in credit and private equity and venture capital investments in middle-market companies, mezzanine, later stage, mature, late venture, emerging growth, buyouts, recapitalization, and growth capital investments. CSWC was founded on April 19, 1961, and is based in Dallas, Texas.

  • On Sep 2, CSWC declared a quarterly dividend of 47¢ per share.
  • This is an increase of 6.82% from the prior dividend of 44¢.
  • Payable Dec 31, to shareholders of record on Dec 15; ex-div: Dec 14.

First Republic Bank (FRC)

FRC and its subsidiaries provide private banking, private business banking, real estate lending, and wealth management services to clients in metropolitan areas in California, Oregon, Massachusetts, Florida, Connecticut, New York, and Wyoming. The company operates through two segments, Commercial Banking and Wealth Management. FRC was founded in 1985 and is headquartered in San Francisco, California.

  • On Sep 2, FRC declared a quarterly dividend of 32.03¢ per share.
  • This is an increase of 45.59% from the prior dividend of 22¢.
  • Payable Sep 30, to shareholders of record on Sep 16; ex-div: Sep 15.

New Jersey Resources Corporation (NJR)

Founded in 1922 and headquartered in Wall, New Jersey, NJR is an energy services holding company that provides regulated gas distribution, and retail and wholesale energy services. NJR operates in several business segments, including Natural Gas Distribution, Clean Energy Ventures, Energy Services, Retail Services, Midstream, and Home Services.

  • On Sep 8, NJR declared a quarterly dividend of 36.25¢ per share.
  • This is an increase of 9.02% from the prior dividend of 33.25¢.
  • Payable Oct 1, to shareholders of record on Sep 20; ex-div: Sep 17.

Verizon Communications Inc. (VZ)

VZ provides communications, information, and entertainment products and services worldwide to consumers, businesses, and governmental agencies. Formerly known as Bell Atlantic Corporation, it changed its name to Verizon Communications Inc in June 2000. VZ was founded in 1983 and is based in New York, New York.

  • On Sep 2, VZ declared a quarterly dividend of 64¢ per share.
  • This is an increase of 1.99% from the prior dividend of 62.75¢.
  • Payable Nov 1, to shareholders of record on Oct 8; ex-div: Oct 7.

Please note that we're not recommending any of these stocks. Readers should do their own research on these companies before buying shares.

Dividend Cuts and Suspensions

Following requests from readers, we've added this section to our weekly article series. Please note that we're only covering dividend cuts and suspensions announced by companies in Dividend Radar's spreadsheet.

There were no members of Dividend Radar that announced a dividend cut or suspension in the past two weeks.

An Interesting Candidate

In this section, we highlight one of the stocks that announced a dividend increase. We provide a quality assessment and present performance, earnings, and valuation charts.

Our objective is to identify high-quality dividend growth [DG] stocks trading at reasonable valuations. That's a tough task, though, as high-quality DG stocks often trade at premium valuations. If we can't find a worthy candidate, we'll suggest a stock to add to your watchlist and a suitable target price.

To start, we use DVK Quality Snapshots to do a quick quality assessment, screening our list of DG stocks based on quality scores. Only one stock has a quality score in the range 19-25, the range we usually screen for:

Source: Created by the authors from data in Dividend Radar

So let's look at Dividend Contender Verizon Communications Inc (VZ) this week.

With 17 consecutive years of higher dividend payments, VZ yields 4.72% at $54.23 per share and has a very modest 5-year DGR of 2.2%.

VZ is rated Fair (quality score: 19-22):

Over the past ten years, VZ has underperformed the SPDR S&P 500 ETF (SPY), an ETF designed to track the 500 companies in the S&P 500 index:

Source: Portfolio-Insight.com

Over this time frame, VZ delivered total returns of 142% versus SPY's 369%, a margin of 0.38-to-1.

If we extend the period of comparison to the past twenty years, VZ underperformed SPY by a margin of 0.34-to-1, with total returns of 170% versus SPY's 494%.

VZ's dividend growth is steady but sedate:

I also look at EPS growth, as dividends primarily are paid from earnings. VZ's EPS also is growing slowly but steadily:

At 49%, VZ's earnings payout ratio is "very low for telecoms", according to Simply Safe Dividends:

This means VZ has plenty of room to continue increasing its dividend.

Let's now consider VZ'S valuation. We could estimate fair value by dividing the stock's annualized dividend ($2.56) by its 5-year average yield (4.47%). That results in a fair value [FV] estimate of $57. Given VZ's current price of $54.23, the stock is trading at a discount to its past dividend yield history.

For reference, CFRA's FV is $56, Morningstar's FV is $57, and Finbox.com's FV is $66. The average of these fair value estimates is $60, confirming that VZ may be discounted.

My own FV estimate of VZ is $64, so I believe the stock is trading at a discounted valuation of about 15%.

Conclusion

VZ is a high-quality DG stock trading at a discounted valuation.

Please note that we're not recommending VZ or any of the stocks listed in this article. Readers should do their own research on these companies before buying shares.

Thanks for reading and happy investing!

This article was written by

FerdiS profile picture
26.31K Followers
FerdiS invests in dividend growth stocks and writes options to boost dividend income. He manages DivGro, a portfolio of mainly dividend growth stocks created in January 2013. With investment and trading experience spanning nearly 20 years, FerdiS enjoys writing articles about dividend growth investing, options trading, stock selection, portfolio management, and passive income generation. His DivGro blog hosts more than 1,000 posts and a live, public spreadsheet with full details of his DivGro portfolio, allowing readers to follow along in his investment journey. FerdiS is collaborating with the founders of Portfolio Insight, an online platform for portfolio management and investment analysis. Together, we maintain and publish Dividend Radar, a free spreadsheet of dividend growth stocks, on a weekly basis.

Disclosure: I/we have a beneficial long position in the shares of VZ either through stock ownership, options, or other derivatives. 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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