Eleven Dividend Growth Companies Showering Investors With More Cash

I invest in companies that have a long track record of annual dividend increases. This is usually a result of a strong business model, that is fueled by growth in earnings over time. I try to build a diversified portfolio of dividend growth stocks over time, and try to avoid overpaying for investments.

One of the ways to monitor dividend growth stocks is by checking the dividend increases. A company that has a culture of regularly raising dividends, is very likely to continue raising them. A company with a culture of regular annual dividend increases that reduces dividends is sending a signal that something has changed. Either way, it is important to monitor the fundamental position of the enterprise, in order to determine if dividends are sustainable, and if further dividend growth is probable.

Dividend Growth Companies

Photo by stevepb (Pixabay)

Dividend Growth Companies

During the month of September, there were several notable dividend growth stocks, which continued their winning streak of delivering higher dividend payments to shareholders. Each of the companies listed below have managed to boost dividends for at least ten consecutive years ( with the sole exception being PMI). The companies include:

McDonald’s Corporation (MCD) operates and franchises McDonald’s restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. The company raised its quarterly dividend by 5.60% to 94 cents/share. This dividend champion has been raising dividends for 41 years in a row. Over the past decade, the company has managed to increase dividends at a rate of 17.80%/year. The stock is slightly overvalued at 20.70 times expected earnings and yields 3.30%. I view the stock as a hold, as it has been unable to grow earnings per share for the past three years. As I am maxing out my retirement accounts this year, I am essentially spending my taxable dividend income. Otherwise, I would have allocated those dividends elsewhere. Check my analysis of McDonald’s for more information.

YUM! Brands, Inc. (YUM) operates fast-food restaurants in four segments: YUM China, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company raised its quarterly dividend by 10.90% to 51 cents/share. This dividend achiever has been raising dividends for 13 years in a row. Over the past decade, the company has managed to increase dividends at a rate of 22.90%/year. The stock is slightly overvalued at 24.50 times expected earnings and yields 2.20%. I remain bullish on this holding, mostly due to the potential of emerging markets. I am curious to see how the spin-off of Chinese operations does. As with other spin-offs, I will hold on to it.

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Disclosure: Long MCD, YUM, LMT, PM, VZ, O, WPC, HIFS

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Chee Hin Teh 5 years ago Member's comment

Thanks for sharing your dividend plan

Chee Hin Teh 5 years ago Member's comment

Thanks for sharing