Dividend Increases: September 25-October 1, 2021
Summary
- This article series provides a weekly summary of dividend changes.
- A summary table provides relevant data and key statistics of dividend increases.
- We highlight one of the stocks that announced a dividend increase, providing a quality assessment and performance, earnings, and valuation charts.
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We monitor dividend changes of stocks in Dividend Radar, a weekly automatically generated spreadsheet listing stocks with dividend streaks of five years or more. 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).
This week, seven companies in Dividend Radar declared dividend increases, including three of my DivGro holdings. Note there were no dividend cuts or suspensions announced for Dividend Radar stocks during this 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: September 25-October 1, 2021 |
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| Previous Post: Dividend Increases: September 18-24, 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.
Honeywell International Inc. (HON)
HON is a diversified technology and manufacturing company with worldwide operations. The company provides aerospace products, software, and services; control, sensing, and security technologies; materials, process technologies, and automation solutions; and productivity, workplace safety, and asset performance solutions. HON was incorporated in 1985 and is headquartered in Charlotte, North Carolina.
- On Oct 1, HON declared a quarterly dividend of 98¢ per share.
- This is an increase of 5.38% from the prior dividend of 93¢.
- Payable Dec 3, to shareholders of record on Nov 12; ex-div: Nov 10.
Johnson Outdoors Inc. (JOUT)
JOUT designs, manufactures, and markets camping, diving, watercraft, and marine electronics products worldwide. The company operates in the Fishing, Camping, Watercraft Recreation, Diving segments. It sells its products through specialty dive stores and through Websites. JOUT was founded in 1970 and is headquartered in Racine, Wisconsin.
- On Oct 1, JOUT declared a quarterly dividend of 30¢ per share.
- This is an increase of 42.86% from the prior dividend of 21¢.
- Payable Oct 29, to shareholders of record on Oct 15; ex-div: Oct 14.
McDonald's Corporation (MCD)
MCD operates and franchises restaurants that serve locally relevant menus of food and drink in more than 100 countries worldwide. The company operates primarily as a franchisor, owning the land and building for both franchised and company-operated restaurant sites. MCD was founded in 1940 and is based in Oak Brook, Illinois.
- On Sep 27, MCD declared a quarterly dividend of $1.38 per share.
- This is an increase of 6.98% from the prior dividend of $1.29.
- Payable Dec 15, to shareholders of record on Dec 1; ex-div: Nov 30.
OGE Energy Corp. (OGE)
Founded in 1995, OGE, together with its subsidiaries, provides energy and energy services primarily in the south-central United States. The company operates in two segments, Electric Utility and Natural Gas Midstream Operations. It offers physical delivery and related services for both electricity and natural gas. OGE is headquartered in Oklahoma City, Oklahoma.
- On Sep 29, OGE declared a quarterly dividend of 41¢ per share.
- This is an increase of 1.86% from the prior dividend of 40.25¢.
- Payable Oct 29, to shareholders of record on Oct 12; ex-div: Oct 11.
Riverview Bancorp, Inc. (RVSB)
Founded in 1923 and based in Vancouver, Washington, RVSB operates as the holding company for Riverview Community Bank that provides community banking services to small and medium-sized businesses, professionals, and individuals in Washington and Oregon. RVSB provides a range of deposit and loan products, as well as mortgage brokerage and asset management services.
- On Sep 27, RVSB declared a quarterly dividend of 5.5¢ per share.
- This is an increase of 10.00% from the prior dividend of 5¢.
- Payable Oct 19, to shareholders of record on Oct 7; ex-div: Oct 6.
Starbucks Corporation (SBUX)
SBUX is a roaster, marketer, and retailer of specialty coffee. The company roasts and sells coffees, and other beverages, and fresh food items, through company-operated stores. It also sells a range of coffee and tea products and licenses its trademarks through other channels. SBUX was founded in 1971 and is based in Seattle, Washington.
- On Sep 29, SBUX declared a quarterly dividend of 49¢ per share.
- This is an increase of 8.89% from the prior dividend of 45¢.
- Payable Nov 26, to shareholders of record on Nov 12; ex-div: Nov 11.
TTEC Holdings, Inc. (TTEC)
TTEC designs and provides customer experience solutions in the United States, Latin America, Europe, the Middle East, Africa, the Asia Pacific, Canada, the United Kingdom, and internationally. It operates in four segments: Customer Management Services, Customer Growth Services, Customer Technology Services, and Customer Strategy Services. TTEC was founded in 1982 and is headquartered in Englewood, Colorado.
- On Sep 27, TTEC declared a semi-annual dividend of 47¢ per share.
- This is an increase of 9.30% from the prior dividend of 43¢.
- Payable Oct 22, 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 dividend cuts or suspensions announced for stocks in Dividend Radar during this period.
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. Below is a shortlist of stocks with quality scores in the range 19-25:
Source: Created by the authors from data in Dividend Radar
Three stocks made the shortlist this week. We've focused on HON before, so the choice is between MCD and SBUX. Given its higher yield and stellar history of dividend increases, let's look at Dividend Challenger McDonald's (MCD) this week.
MCD yields 2.27% at $242.86 per share and has a decent 5-year DGR of 7.7%.
MCD is rated Fine (quality score: 19-22):
Over the past ten years, MCD 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, MCD delivered total returns of 274% versus SPY's 370%, a margin of 0.74-to-1.
If we extend the period of comparison to the past twenty years, MCD easily outperformed SPY, with total returns of 1,323% versus SPY's 493%, a margin of 2.68-to-1!
MCD's dividend growth is steady, with annual increases that averaged about 8% over the past ten years:
MCD's EPS growth is not as steady, though, with a particularly bad year in FY 2020 due to the COVID-19 pandemic and its impact on the economy:
Based on EPS estimates for FY 2021 and FY 2022, it looks like MCD will recover nicely from the pandemic-induced setback.
At 62%, MCD's earnings payout ratio is "edging high for restaurants", according to Simply Safe Dividends:
Prospective investors should carefully monitor the payout ratio, as that could be an early indicator of smaller dividend increases to come. At this stage, though, it appears MCD's dividend is safe given its Dividend Safety Score of 77.
Next, let's consider MCD's valuation. We could estimate fair value by dividing the stock's annualized dividend ($5.52) by its 5-year average yield (2.48%). That results in a fair value [FV] estimate of $223. Given MCD's current price of $242.86, the stock is trading at a premium relative to its past dividend yield history.
For reference, CFRA's FV is $171, Finbox.com's FV is $233, Morningstar's FV is $234, and Simply Wall St's FV is $235. The average of these fair value estimates is $218, also indicating that MCD may be overvalued.
My own FV estimate of MCD is $219, so I believe the stock is trading at a premium valuation of about 11%.
Here are the most recent Seeking Alpha articles covering MCD:
- Neutral: McDonald's: Over The Eyeballs In Debt, by Robert Honeywill.
- Bullish: McDonald's Growth In A Rebound Can Take It To New Highs, by Damien Robbins.
- Neutral: McDonald's Corporation: ROIC And Capital Allocation In Focus, by Sensor Unlimited.
Conclusion
MCD is a high-quality DG stock trading at a premium valuation. For stocks rated Fine, I'm willing to pay up to my FV estimate for shares. Therefore, my Buy Below price for MCD is $219. For conservative investors, a price below $197 is more appropriate.
Please note that we're not recommending MCD 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
Analyst’s Disclosure: I/we have a beneficial long position in the shares of HON, MCD, SBUX 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.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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Comments (20)
but for those who were patient in the mid 20s, it sure paid off. A stock
not discussed much.
Holder since 2008 has returns 71% in dividends cost basis is 32.65 the adjusted cost basis is 9.44. I will not sell because of the capital gains. If you buy in below 112 you'll get 3% yield. imho