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A Record Week for Dividend Increases
Posted by: Dividend Growth Investor (IP Logged)
Date: October 28, 2012 10:18PM

There were a record 73 dividend increases over the past week. This was the busiest week for dividend increases I have witnessed since starting this site five years ago. I review dividend increases each week in an effort to uncover hidden dividend gems as well as to keep close tabs on the pulse of dividends paid by companies I own or am in the process of researching.

Below, I have highlighted companies that boosted distributions over the past week and have been raising dividends for at least ten consecutive years. I added a brief commentary behind each company of interest. The companies include:

Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance. The company raised its quarterly distributions by 6.10% to 35 cents/share. This marked the 30th consecutive annual dividend increase for this dividend champion. Yield: 2.80% (analysis)

I recently added to my position in Aflac, given the company’s P/E ratio of 8.20. The company has managed to raise dividends by 20.40%/year over the past decade. Most of the fears behind Aflac stem from fears that its portfolio holds a large portion of European debt. Aflac has been decreasing its position in European debt and owns no toxic Greek debt. Another fear could be the Fukushima disaster, which might increase cancer rates in Japan. At the same time the company is growing operations in Japan and US. Check my analysis of the stock.

V.F. Corporation (VFC) designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. The company raised its quarterly distributions by 20.80% to 87 cents/share. This marked the 40th consecutive annual dividend increase for this dividend champion. Yield: 2.20%

The company has managed to more than double earnings since 2003.The company has managed to raise dividends by 10.90%/year over the past decade. I analyzed the company in 2011, but just like today the dividend was quite low. I would consider initiating a position in VF Corp on dips below $140.

Magellan Midstream Partners, L.P. (MMP) engages in the transportation, storage, and distribution of petroleum products in the United States. The MLP raised its quarterly distributions to 48.50 cents/share. This marked the 12th consecutive annual dividend increase for this dividend achiever. Yield: 4.40%

Magellan has managed to boost distributions by 15.80%/year over the past decade. I am adding this MLP to my list of companies to analyze in a future post in order to understand if there is any potential for future distributions hikes.

Tompkins Financial Corporation (TMP) operates as a community-based financial services company in New York. The company raised its quarterly distributions by 5.60% to 36 cents/share. This marked the 26th consecutive annual dividend increase for this dividend champion. Yield: 3.70%

The company has managed to boost distributions by 6.40%/year over the past decade. This was driven by an increase in EPS from $2.11 in 2002 to $2.79 in 2011. I like the company’s predictable dividend growth coupled with an above average dividend yield and sustainable dividend payout based on 2012 earnings. I would add the stock to my list for further research.

The following companies that boosted distributions either do not have a yield above 2.50% or are growing distributions at a very slow pace. In order to live off dividends in retirement, investors need stocks that pay decent current yields, which also boost distributions at or above the rate of inflation. That being said, if any of these companies manage to yield more than 2.50% while growing dividends by more than 6% per year, I would consider them for further analysis.

Brown & Brown, Inc. (BRO), a diversified insurance agency, engages in the marketing and sale of insurance products and services in the United States. The company raised its quarterly distributions by 5.90% to 9 cents/share. This marked the 19th consecutive annual dividend increase for this dividend champion. Yield: 1.40%

Met-Pro Corporation (MPR) manufactures and sells product recovery and pollution control equipment for the purification of air and liquids, fluid handling equipment, and filtration and purification products. The company raised its quarterly distributions by 2.10% to 7.25 cents/share. This marked the 12th consecutive annual dividend increase for this dividend achiever. Yield: 3.30%

Middlesex Water Company (MSEX) owns and operates regulated water utility and wastewater systems in New Jersey, Delaware, and Pennsylvania. The company raised its quarterly distributions by 1.40% to 18.75 cents/share. This marked the 40th consecutive annual dividend increase for this dividend achiever. Yield: 4%

UMB Financial Corporation (UMBF), a multi-bank holding company, provides banking and other financial services to commercial, retail, government, and correspondent bank customers. The company raised its quarterly distributions by 4.90% to 21.50 cents/share. This marked the 22nd consecutive annual dividend increase for this dividend achiever. Yield: 1.90%

MSC Industrial Direct Co., Inc. (MSM), together with its subsidiaries, operates as a direct marketer and distributor of metalworking and maintenance, repair, and operations (MRO) products to industrial customers in the United States. The company raised its quarterly distributions by 20% to 30 cents/share. This marked the 10th consecutive annual dividend increase for this dividend achiever. Yield: 1.70%

Prosperity Bancshares, Inc. (PB) operates as the holding company for Prosperity Bank that provides a range of financial products and services to small and medium-sized businesses, and consumers in Texas. The company raised its quarterly distributions by 10.30% to 21.50 cents/share. This marked the 15th consecutive annual dividend increase for this dividend achiever. Yield: 2.10%

Stepan Company (SCL), together with its subsidiaries, engages in the production and sale of specialty and intermediate chemicals to manufacturers in various industries worldwide. The company raised its quarterly distributions by 14.30% to 16 cents/share. This marked the 45th consecutive annual dividend increase for this dividend champion. Yield: 1.20%

Tennant Company (TNC) engages in designing, manufacturing, and marketing cleaning solutions worldwide. The company raised its quarterly distributions by 5.90% to 18 cents/share. This marked the 40th consecutive annual dividend increase for this dividend champion. Yield: 1.90%

Full Disclosure: Long AFL


Stocks Discussed: AFL, VFC, MMP, TMP, BRO, MPR, MSEX,
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