Busy Week For Dividend Increases

As part of my monitoring process, I review the list of dividend increases every single week. I narrow the list down by focusing on the companies with at least a ten-year history of annual dividend increases. I then try to review the trends in earnings, and dividends, in order to determine the likelihood of future dividend growth. The next step is to look at valuation, and take into consideration the growth profile of the enterprise, before coming up with a conclusion on the price. 

The past week was busy for dividend investors, given the high number of dividend increases to sift through. After narrowing the list down, I came up with the following thirteen companies that raised dividend last week. The companies include:

The TJX Companies, Inc. (TJX) operates as an off-price apparel and home fashions retailer. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International.
TJX plans to increase the regular quarterly dividend on its common stock to be declared in April 2019 and payable in June 2019 to $0.23 per share. This represents an 18% increase in the current per share dividend and marks the 23rd consecutive year that the Company has raised the dividend. Over the past decade, the Company’s dividend has grown at a compound annual rate of 21.60%.
The Company also announced today its plan to repurchase approximately $1.75 to $2.25 billion of TJX stock during the fiscal year ending February 1, 2020. Between 2009 and 2019, TJX Companies managed to grow earnings from $0.50/share to $2.43/share.

The company is expected to earn $2.61/share in 2019. The stock is close to fully valued at 19.90 times forward earnings. TJX Companies yields 1.80% today. Check my analysis of TJX Companies for more information about the enterprise.

British American Tobacco p.l.c. (BTIprovides cigarettes and other tobacco products worldwide. It manufactures vapour and tobacco heating products; oral tobacco and nicotine products, such as snus and moist snuff; cigars; and e-cigarettes.

British American Tobacco raised its dividend per share by 4.0% to 203.0p, payable in four quarterly dividend payments of 50.75p per share. The company is an international dividend achiever, which has managed to reward shareholders with a dividend increase every year since 1997.

I found the following statement to be illuminating, from the press release:

We recognize that the proposed potential regulatory changes in the US have created some investor uncertainty. We have a long experience of managing regulatory developments, a track record of delivering strong growth while investing for the future and an established multi-category approach. I am confident that my successor, Jack Bowles, will continue to deliver a similar level of sustainable long-term returns as we accelerate our Transforming Tobacco agenda. Looking into 2019 we are confident of another year of high single figure adjusted constant currency earnings growth and this confidence is reflected in our Board’s proposal to increase the dividend by 4%

Earnings per share increased from 1.23 pounds/share in 2009 to 2.63 pounds/share in 2018. The company is expected to earn 3.14 pounds/share in 2019.

I recently initiated a position in the stock. I find BTI to be attractively valued at 9.10 times forward earnings. The stock yields 7.10%. You can check my analysis of British American Tobacco here.
 

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Disclaimer: I am not a licensed investment adviser, and I am not providing you with individual investment advice on this site. Please consult with an investment professional before you invest ...

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