Buy 6 August 40+ Year Dividend Growers

Aug. 17, 2022 6:16 AM ETAPD, BEN, CTBI, EMR, JNJ, KO, LEG, MDT, MMM, NFG, NWN, ORI, SWK, TDS, UVV, WBA, XOM4 Comments

Summary

  • DRIP Investing lists over 800 stocks that have annually increased dividends for 5 years or more. As of July, 62 stocks have hiked their dividends annually 40 years or more.
  • Parsed from 129 Champions, utilizing YCharts data as of 8/15/22, those 62 select-dividend stocks ranged 0.87% to 5.95% in annual yield, and ranged -17.74% to 31.143% in analyst 1-yr price.
  • Top Ten 40+ Year growing dividend stocks showed net gains from 7.88% to 34.64% pending to August 2023.
  • $5k invested in the lowest-priced five of ten top-yield 40+Year increasing dividend stocks showed 11.07% more net gain than from $5k invested in all ten. Little (lower-priced) stocks led the 40+ yearly grown dividend pack by over a length.
  • Six of the 62 40-year annual dividend boosting stocks showed annual dividends from a $1K investment exceeding their single share price. That is the dogcatcher ideal dividend investment starting point.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Dog Catcher get exclusive access to our model portfolio. Learn More »

puppy rottweiler

cynoclub/iStock via Getty Images

This article is based on the monthly lists of Champions, Contenders, and Challengers (CCC) created by the late David Fish and posted on dripinvesting.org as maintained Dividend Radar.

Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, these CCC lists are perfect for the dogcatcher process. Here is the current list of 62 longest annually increasing dividend stocks in the Champion-documented collection, per updated data from YCharts sampled August 15.

The Ides of March 2020 plunge in stock market prices devastated the Champions. However, none suspended or reduced dividend payouts. In fact, the drop in prices of 8 of the top 40 (listed by yield) reliable 40yr+ boosters made the possibility of owning productive dividend shares from this collection more viable for first-time investors back in May 2020.

As of August 15, 2022, however, 6 of the now 62 40-year dividend-growing stocks showed annual dividends from a $1K investment exceeding their single share price. They were: Universal Corp. (UVV); Walgreens Boots Alliance, Inc. (WBA); Leggett & Platt, Inc. (LEG); Telephone and Data Systems, Inc. (TDS); Franklin Resources, Inc. (BEN); Old Republic International Corp. (ORI). Some consider dividends from $1K invested exceeding share price a buy zone alert.

See the Afterword at the tail of this article for a list of August's 62 stocks in their order of longevity raising dividends. The shortest is 40 years; the longest is 68. Recent vs fair price comparisons are also found there.

Actionable Conclusions (1-10): Analysts Estimate 7.88%-34.64% Net Gains For Ten Top 40yr+ Dividend Growing Dogs For August

Three of ten top-yield 40yr+ Dividend-increasing stocks were also among the top gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below). Thus, the yield-based forecast for these July dogs was graded by Wall St. Wizards as 30% accurate this month.

The following projections were based on estimated dividends from $1000 invested in each of the highest yielding stocks plus their aggregate one-year analyst median target prices, as reported by YCharts. Note: target prices from less than two analysts were not applied.

Ten probable profit-generating trades projected to August 15, 2023 were:

40+DHI (1) GAINS AUG22-23

Source: YCharts.com/DripInvesting.com

Telephone and Data Systems Inc was projected to net $346.35 based on target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 2% more than the market as a whole.

Stanley Black & Decker, Inc. (SWK) was projected to net $195.42 based on the median of target price estimates from fourteen analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 27% over the market as a whole.

Emerson Electric Co. (EMR) was projected to net $184.97 based on dividends, plus the median of target estimates from twenty-two brokers, less transaction fees. The Beta number showed this estimate subject to risk/volatility 41% greater than the market as a whole.

Medtronic plc (MDT) was projected to net $169.86, based on dividends, plus the median of target price estimates from twenty-one analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 25% under the market as a whole.

Exxon Mobil Corp. (XOM) was projected to net $154.62, based on dividends, plus the median of target price estimates from twenty-six analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% over the market as a whole.

Johnson & Johnson (JNJ) was projected to net $134.67, based on a median of target price estimates from nineteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 41% under the market as a whole.

National Fuel Gas Co. (NFG) was projected to net $114.59, based on dividends, plus the median of target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 32% under the market as a whole.

Coca-Cola Co. (KO) was projected to net $96.37, based on dividends, plus median target price estimates from twenty-three analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 47% less than the market as a whole.

Air Products and Chemicals (APD) was projected to net $88.35, based on the median of target price estimates from twenty analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 19% less than the market as a whole.

Walgreens Boots Alliance was projected to net $78.82, based on the median of target estimates from sixteen analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% less than the market as a whole.

The average net gain in dividend and price was estimated at 15.64% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risk/volatility 12% less than the market as a whole.

40+DHI (2) DOG AUG22-23 open source dog art 5 from dividenddogcatcher.com

Source: Open source dog art from dividenddogcatcher.com.

The Dividend Dogs Rule

Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs".

50 Reliable 40yr+ Dividend-Growing Stocks Show August Target Gains

50 Reliable 40yr+ Dividend-Growing Stocks Show August Target Gains

Source: YCharts.com

50 August Yields From 40yr+ Dividend Hiking Stocks

50 August Yields From 40yr+ Dividend Hiking Stocks

Source: YCharts.com

Actionable Conclusions (11-20): 10 Top 40yr+ Dividend Boosting Stocks By Yield

Top ten Reliable 40yr+ Dividend Stocks by yield for August represented eight of eleven Morningstar sectors. The consumer defensive sector representative placed first, Universal Corp. [1]. One healthcare outfit placed second, Walgreens Boots Alliance [2].

Third place went to the consumer cyclical representative, Leggett & Platt Inc. [3]. Fourth place was claimed by the lone communication services representative, Telephone and Data Systems[4].

Thereafter three financial services representatives placed fifth, seventh and eighth: Franklin Resources Inc. [5], Community Trust Bancorp Inc. (CTBI) [7], and Old Republic International Corp. [8].

One industrials sector representative placed sixth, 3M Co. (MMM) [6].

Finally, one energy sector member claimed ninth, Exxon Mobil Corp. (XOM) [9], and a lone utilities member placed tenth, Northwest Natural Holding Co. (NWN) [10], to complete the 40yr+ Dividend Growing Stocks top ten by yield in this August survey.

Actionable Conclusions: (21-30) Top Ten 40yr+ Dividend Growing Dogs Showed 5.89%-31.43% Upsides, While (32) Nine Down-siders Sank 0.17%-13.15% Per Broker Estimates

40+DHI (5) UPSIDE/DN AUG22-23

Source: YCharts.com

To quantify top dog rankings, analyst median price target estimates provide a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analyst median target price estimates became another tool to dig out bargains.

Analysts Forecast A 11.07% Advantage For 5 Highest Yield, Lowest Priced Of The Top 10 40yr+ Dividend Growing Dogs To August 2023

Ten top 40yr+ Dividend growing dogs were culled by yield (dividend/price). Results provided by YCharts did the ranking.

40+DHI (6) 10BY YIELD AUG 22-23

Source: YCharts.com

As noted above, top ten Reliable 40yr+ Dividend dogs screened 7/14/22 showing the highest dividend yields represented seven of eleven sectors in the Morningstar scheme.

Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Ten Highest-Yield Reliable 40yr+ Dividend Growing Dogs (31) Delivering 8.06% Vs. (32) 7.25% Net Gains by All Ten Come August 2023

40+DHI (7) 10BY GAINS AUG22-23

Source: YCharts.com

$5000 invested as $1k in each of the five lowest-priced stocks in the top ten 40yr+ Dividend kennel by yield were predicted by analyst 1-year targets to deliver 11.07% more gain than $5,000 invested as $.5k in all ten. The very lowest-priced selection, Telephone and Data Systems was projected to deliver the best net gain of 34.64%.

40 year+ dividend builders

Source: YCharts.com

The five lowest-priced top-yield 40yr+ Dividend dogs as of August 15 were: Telephone and Data Systems Inc.; Old Republic International Corp.; Franklin Resources Inc.; Walgreens Boots Alliance Inc.; Leggett & Platt Inc., with prices ranging from $17.12 to $41.07.

Five higher-priced Kiplinger top-yield growing 40yr+ dividend dogs as of August 15 were: Community Trust Bancorp Inc.; Northwest Natural Holding Co.; Universal Corp.; Exxon Mobil Corp.; 3M Co., whose prices ranged from $44.81 to $151.43.

The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 15% accurate on the degree of change.

Afterword

Here's All 62 Dogs by Years

62 dividend champions

Source: dripinvesting.org

Finally, in case you missed this tidbit in the foreword, here it is to close out the afterword for this article: This pre-September list showed 6 of the 62 40-year dividend-hiker stocks show annual dividends from a $1K investment exceeding their single share prices. They were: Universal Corp; Walgreens Boots Alliance Inc; Leggett & Platt Inc; Telephone and Data Systems Inc; Franklin Resources Inc; Old Republic International Corp. Some consider dividends from $1K invested exceeding share price a buy zone alert.

Here is How All Ten Top 40yr+ Growing Dividend Dogs Could Become Fair-Priced

All Ten Top 40yr+ Growing Dividend stocks Could Become Fair-Priced

Source: YCharts.com

Since six of the top ten 40Yr+ Dividend Dog shares were recently priced less than the annual dividends paid out from a $1K investment, the above charts compare those six plus four at recent prices (top chart) with the fair pricing of all ten top dogs conforming to (or exceeding) that ideal (middle chart). The dollar and percentage differences between recent and fair prices are detailed in the bottom chart.

With renewed downside market pressure to 49%, it is possible for all ten highest-yield 40Yr+ Dividend Boosted stocks, to become fair-priced with their annual yield (from $1K invested) meeting or exceeding their single share prices. A mere 6.4% drop in price would cause Community Trust Bank Corp to be the seventh out of ten to become fair priced.

A follow-up article identifying the 'Safer' 40yr+ Durable Dividend dogs will appear next week (after August 22) in the Dividend Dogcatcher pages of Seeking Alpha's Marketplace.

The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Stocks listed above were suggested only as possible reference points for your stock purchase or sale research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.indexarb.com; YCharts.com; finance.yahoo.com; analyst mean target price by YCharts. Open source dog silhouette art from dividenddogcatcher.com.

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This article was written by

Fredrik Arnold profile picture
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Simple, straightforward 7-step analysis that finds lucrative income stocks.
Fredrik Arnold is my pen name. In 2012 I retired from doing quality service analysis in Boston and moved to North Carolina in 2013, thence to Central Oregon in 2018. My fascination with capital preservation, long-term investments, and trading systems keeps me blogging for Seeking Alpha. My articles focus on dividend yields, analyst median 1 yr targets, free cash flow yields, and one-year total returns as stock trading indicators. These are essential tools for catching the most valuable dividend dogs. My dividend dogcatcher premium site in the Seeking Alpha Marketplace shows annual real-time trading results since 2015.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

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