Each week, I go through the list of dividend increases in order to monitor performance of existing holdings, and uncover hidden dividend gems. I then narrow down the list by eliminating companies with a dividend growth streak that is less than a decade.
I also look at things like trends in earnings per share, dividends per share, dividend payout ratios, in order to determine the likelihood of future dividend growth and growth in intrinsic value. My basic analysis also focuses on valuation and dividend sustainability.
Over the past week, there were six dividend stocks with a long streak of consecutive annual dividend increases, which raised dividends to shareholders. The companies include:
Brown-Forman Corporation (BF.B) manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages worldwide. It provides spirits, wines, ready-to-drink cocktails, whiskey, vodka, tequilas, champagnes, brandy, and liqueur. Last week, the company raised its quarterly dividend by 7.40% to 18.25 cents per share. This marked the 33th consecutive annual dividend increase for this dividend champion.
Over the past decade, Brown-Forman has managed to raise its dividends at a rate of 9.40% per year. Currently, the stock is overvalued at 26.10 times forward earnings and yields 1.60%. Brown-Forman would look more appealing on dips below $36 per share.
Check my analysis of Brown-Forman for more information about the company.
Union Pacific Corporation (UNP), through its subsidiary, Union Pacific Railroad Company, operates railroads in the United States. Last week, the company raised its quarterly dividend by 10% to 60.50 cents per share. Union Pacific was overdue for a dividend increase, as it had kept the quarterly dividend unchanged for the past 7 quarters. Union Pacific has managed to boost annual dividends to shareholders for a decade.
Over the past decade, Union Pacific Corporation has managed to raise its dividends at a rate of 22% per year. This was possible because of the expansion in the dividend payout ratio, along with the strong earnings performance over the past decade. Currently, the stock is overvalued at 20.20 times forward earnings and yields 2.40%. The stock would look better on dips below $97 per share. It would look even better at a P/E of 15 – 16.
Check my analysis of Union Pacific for more information.
Nike Inc (NKE), together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. Last week, the company raised its quarterly dividend by 12.50% to 18 cents per share. This marked the 15th consecutive annual dividend increase for this dividend achiever.
Over the past decade, Nike has managed to raise its dividends at a rate of 15.50% per year. Currently, the stock at 21.60 times forward earnings and yields 1.40%.
I would be interested in initiating a position in Nike on dips below $47 – $48/share.