Another week, another pay raise.
Ahh, the life of a dividend growth investor.
It’s hard for me to not just quite literally jump for joy whenever I discover that a company I own a piece of has decided to pay its part-owners more cash in the form of an increased dividend.
I mean, how can you not be excited when you hear news like that?
These weekly reports are just a great example of why I’m such an enthusiastic investor in high-quality stocks that have lengthy track records of regularly and reliably not only paying dividends, but also increasing them on a consistent basis.
[ad#Google Adsense 336×280-IA]The kind of stocks I’m talking about can be found on David Fish’s Dividend Champions, Contenders, and Challengers list – a document that compiles and tracks more than 560 US-listed stocks that have increased dividend payouts for at least the last five consecutive years.
Cash flow is good, but an increase in cash flow is even better.
And today we’ve got a list of seven stocks that have recently increased their dividend payouts.
So let’s take a look and see what we’ve got!
Please keep in mind this list is for informational purposes only, and is not a recommendation to buy any specific stocks.
Lincoln Electric Holdings, Inc. (LECO) just boosted its quarterly dividend from $0.23 to $0.29 per share, for a 26.1% increase. The new dividend is payable on January 15, 2015 to shareholders of record as of December 31, 2014.
This is the 20th consecutive year in which LECO has increased its dividend to shareholders, which is a solid track record. Over the last 10 years, the company has increased its dividend by an annual rate of 9.6%. Not bad at all, although the stock only yields 1.60% here. The good news, however, is that the payout ratio is low, at 35.2%.
LECO is a manufacturer of welding and cutting products.
The growth for LECO over the last decade has been rather impressive. Revenue has grown at a compound annual rate in the high single digits. while earnings per share have increased by a compound annual rate in the mid double digits. Meanwhile, a lot of the profitability metrics look solid and the company sports a spectacular balance sheet.
The stock is trading for a high P/E ratio – 22.02. But the growth probably warrants that. The only aspect of the stock I don’t particularly care for is the low yield, but everything else looks pretty attractive. This is one to watch.
Aflac Incorporated (AFL) just gave shareholders a 5.4% raise by increasing the quarterly dividend from $0.37 to $0.39 per share. The new dividend is payable on December 1, 2014 to shareholders of record as of November 19, 2014.
This company has been busy boosting its dividend for the last 32 consecutive years, and over the last five years, has posted a dividend growth rate of 8.1%. Shares now yield 2.63% on a low 24.5% payout ratio.
Aflac is a holding company that, through its subsidiaries, provides supplemental health and life insurance policies.
I actually just wrote an article about Aflac, and concluded that it’s a fantastic insurance company. They operate an investment portfolio worth $100 billion, which is their float. If/when interest rates rise, Aflac could see a lot of extra income there since they manage the portfolio fairly conservatively, mostly in sovereign debt.
Aflac’s stock seems more or less fairly valued here, which isn’t a bad deal considering the quality of the company and their operating history. I’m a shareholder in the company, and a very happy one at that.
Access Midstream Partners L.P. (ACMP) raised its quarterly distribution by 3.4%, from $0.5950 to $0.6150 per unit. The new distribution is payable on November 14, 2014 to unitholders of record as of November 7, 2014.
Access Midstream Partners has increased its distribution for the last five consecutive years. Shares yield 3.89%, after factoring in this most recent increase. This most recent increase itself may be a bit misleading, due to the fact that ACMP typically increases its distribution quarterly. This is actually a 15% increase year-over-year.
ACMP owns, operates, and develops gathering systems for natural gas, natural gas liquids, and oil; and also owns other midstream assets. They are a master limited partnership.
One particularly relevant note about ACMP is that it has already agreed to a merger with Williams Partners L.P. (WPZ).
The merger with WPZ will create one of the largest natural gas infrastructure plays in the US.
Territorial Bancorp Inc. (TBNK) recently increased its quarterly dividend from $0.15 to $0.16 per share, which is a 6.7% raise. The new dividend is payable on November 26, 2014 to shareholders of record as of November 13, 2014.
This company has a five-year record of consecutive annual dividend raises, with a three-year dividend growth rate of 29.4%. Shares now yield 3.02%, which is pretty attractive here. And the payout ratio, at 42.1%, is moderate, which allows room for future dividend increases.
TBNK is a holding company which owns 100% of Territorial Savings Bank. The bank offers 27 branches throughout the state of Hawaii.
This company went public in 2009, so the bank’s public history is obviously limited. But revenue and earnings per share have both grown at robust rates over the last five years. And you certainly have a captive audience in Hawaii.
The stock appears attractive here, with a P/E ratio of 13.89. The issue I see with this bank is that its growth potential is somewhat limited unless they plan expansion onto the mainland. And the company is small – its market cap is just $213 million. So keep these considerations in mind if you’re looking to invest here. It’s not a stock on my watch list, but it does sport some solid fundamentals.
JMP Group Inc. (JMP) just boosted its dividend by 16.7%, upping it from $0.06 to $0.07 quarterly per share. The new dividend is payable on November 28, 2014 to shareholders of record as of November 14, 2014.
This is the fifth consecutive year in which JMP has raised its dividend, after a dividend cut during the height of the financial crisis. The dividend has increased by an annual rate of 38.1% over the last three years, which is massive. The stock currently yields 3.52%, and the payout ratio is reasonable, at 56%.
JMP is an asset management, investment banking, and corporate credit management company.
JMP’s fundamentals look a bit shaky to me. Revenue and EPS has really gone nowhere since 2009, while many of its profitability metrics look rather poor. Meanwhile, its balance sheet appears very leveraged.
The stock is trading hands for a P/E ratio of 15.75. Combine that with the attractive yield and usually I’d be all over this stock, but the fundamentals just don’t seem to paint a great picture here. I’m on the sidelines with this one.
Columbia Sportswear Company (COLM) recently gave shareholders a 7.1% raise, increasing the quarterly dividend from $0.14 to $0.15 per share. The new dividend is payable on December 4, 2014 to shareholders of record as of November 20, 2014.
Dividend raises aren’t exactly new for this company, as they’ve spend the last nine consecutive years handing them out. Over the last five years, they’ve increased the dividend at an annual rate of 7.3%, which is in line with what we see here. Shares now yield 1.54%, which certainly leaves a bit to be desired. Although, the payout ratio of just 35.7% is low.
COLM designs, develops, markets, and distributes outdoor apparel, footwear, accessories, and equipment under four primary brands: Columbia, Mountain Hardwear, Sorel, and Montrail.
My main issue with this company is that some of the fundamentals don’t appear to be very attractive. Primarily, earnings per share has basically gone nowhere since 2004. So the dividend increases have largely come via an expanding payout ratio, rather than expanding profits. In addition, metrics like return on equity and return on invested capital aren’t particularly inspiring.
The stock trades hands for a P/E ratio of 23.21 here. And then there’s the lowly yield, as aforementioned. In my view, the stock doesn’t really warrant such a lofty P/E ratio, as the company hasn’t exhibited an ability to grow at a rather rapid pace. I think there are bigger and better fish in the stock market sea.
Techne Corporation (TECH) boosted its quarterly dividend from $0.31 to $0.32 per share, which amounts to a 3.2% increase. The new dividend is payable on November 24, 2014 to shareholders of record as of November 10, 2014.
Techne has given shareholders dividend raises for the past seven consecutive years. But over the past three years, the company has averaged less than stellar dividend growth – a 4.8% growth rate. Shares yield 1.42% here, which doesn’t exactly get my blood pumping. Meanwhile, the payout ratio is moderately low, at 44.3%.
TECH develops, manufactures, and sells a variety of biotechnology products and hematology calibrators and controls.
Revenue has grown at a compound annual rate just above 8% over the last decade, while EPS has a CAGR of just above 7%. These aren’t bad numbers by themselves, but they also aren’t particularly difficult to replicate in a number of other stocks out there. Although, the company does sport rather attractive margins.
The stock sports a P/E ratio of 31.28 here, which seems extremely high for a stock with this kind of growth. Factor in a very low yield and a rather pedestrian dividend growth rate and I’m taking a pass here. I understand the biotechnology field is pretty exciting right now, but I’d be much more excited if TECH sported better growth and/or a much cheaper stock.
— Jason Fieber, Dividend Mantra
[ad#DTA-10%]