During the past week, GuruFocus recognized six companies as dividend growers. In order to be qualified for this list, the company had to:
· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following six companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Waste Management (WM)
On Nov. 12, Waste Management declared a dividend of $0.365 per share, representing a 3.20% dividend yield for the company. This dividend is payable on Dec. 20 to shareholders of the record at the close of business on Dec. 4, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 37%
· 5-year: 7.3%
· 3-year: 7%
Waste Management is a provider of waste management services in North America. The Company's subsidiaries provide collection, transfer, recycling and disposal services.
Waste Management’s historical revenue and net income:
The analysis on Waste Management reports that the company’s revenue has slowed down over the past year, it has issued $747 million of debt over the past three years and its price is sitting at a 10-year high.
Top guru shareholders of Waste Management:
1. Bill Gates: 18,633,672 shares, representing 3.97% of the company’s shares outstanding.
2. Mario Gabelli: 1,191,967 shares, representing 0.25% of the company’s shares outstanding.
3. Jim Simons: 749,900 shares, representing 0.16% of the company’s shares outstanding.
The company’s recently released third quarter financials reported:
· Revenue of $3.62 billion, up from $3.46 billion last year.
· Net income was $291 million, or $0.62 per share, up from $214 million and $0.46 per share. This represents a 30% increase.
· Income from operations grew $77 million.
· Net cash provided by operating activities was $736 million, up $162 million from last year.
· Company returned $171 million to shareholders in the form of dividends.
The Peter Lynch Chart suggests that the company is currently overvalued:
Waste Management has a market cap of $21.22 billion. Its shares are currently trading at around $45.22 with a P/E ratio of 22.70, a P/S ratio of 3.20% and a P/B ratio of 3.20. The company had an annual average earnings growth of 4% over the past 10 years.
CenturyLink (CTL)
On Nov. 12, CenturyLink declared a dividend of $0.54 per share, representing a 7.30% dividend yield for the company. This dividend is payable on Dec. 6 to shareholders of the record at the close of business on Nov. 25, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 46%
· 5-year: 14%
· 3-year: 1.20%
CenturyLink is the third largest telecommunications company in the U.S. and is recognized as a leader in the network services market by technology industry analyst firms. The company is a global leader in cloud infrastructure and hosted IT solutions for enterprise customers.
CenturyLink’s historical revenue and net income:
The analysis on CenturyLink reports that the company’s revenue has slowed down over the past year, its P/B and P/S ratios are near historical lows and its gross and operating margins have been in long-time declines.
Top guru shareholders of CenturyLink:
1. NWQ Managers: 6,760,064 shares, representing 1.13% of the company’s shares outstanding.
2. Brian Rogers: 4,136,179 shares, representing 0.69% of the company’s shares outstanding.
The company’s third quarter financials reported:
· Revenue of $4.1 billion, declining 1% from last year.
· Generated FCF of $761 million.
· Purchased and retired 11.3 million shares for $385 million during the third quarter.
· Adjusted net income of $375 million, or $0.63 per share, down from the 2012 third quarter of $413 million, or $0.66 per share.
CenturyLink has a market cap of $18.95 billion. Its shares are currently trading at around $32.06 with a P/S ratio of 1.10 and a P/B ratio of 1.20. The company had an annual average earnings growth of 3.00% over the past ten years.
Prudential Financial (PRU)
On Nov. 12, Prudential Financial declared a dividend of $0.53 per share, representing a 3.20% dividend yield for the company. This dividend is payable on Dec. 19 to shareholders of the record at the close of business on Nov. 26, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 10.7%
· 5-year: 31.8%
· 3-year: 31.7%
Prudential Financial offers financial products and services including life insurance, annuities, retirement services, mutual funds and investment management. Its business is separated into Financial Services Businesses and Closed Block Business.
Prudential Financial’s historical revenue and net income:
The analysis on Prudential reports that the company’s financial strength is poor, its price is sitting at a five-year high and over the past three years the company has issued $3.1 billion of debt.
The top guru shareholders of Prudential:
1. Diamond Hill Capital: 3,772,797 shares, representing 0.81% of the company’s shares out.
2. David Tepper: 1,692,581 shares, representing 0.36% of the company’s shares outstanding.
3. RS Investment: 866,740 shares, representing 0.19% of the company’s shares outstanding.
The company’s recent financial results highlighted:
· Operating income up $919 million or 90% from last year to $1.393 billion, or $2.94 per share.
· Earnings from operating divisions up 27%.
· Net income of $981, or $2.07 per share, up from a net loss of $627 million, or and EPS of $1.34.
· Acquired Hartford’s individual life insurance business.
Prudential Financial has a market cap of $41.37 billion. Its shares are currently trading at around $89.35 with a P/S ratio of 0.50 and a P/B ratio of 1.20.
Lorillard (LO)
On Nov. 14, Lorillard declared a dividend of $0.55 per share, representing a 4.10% dividend yield for the company. This dividend is payable on Dec. 10 to shareholders of the record at the close of business on Nov. 26, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 0%
· 5-year: 31.40%
· 3-year: 17.30%
Lorillard is engaged in the manufacture and sale of cigarettes. Its principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with substantially all of its sales in the U.S.
Lorillard’s historical revenue and net income:
The top guru shareholders of Lorillard:
1. Jean-Marie Eveillard: 7,203,461 shares, representing 1.93% of the company’s shares out.
2. Jeremy Grantham: 4,306,660 shares, representing 1.15% of the company’s shares outstanding.
3. James Barrow: 2,727,748 shares, representing 0.73% of the company’s shares outstanding.
The analysis on Lorillard reports that the company’s revenue has slowed down over the past year, its dividend yield is near a three-year low and its price is near a 10-year high.
The company’s third quarter results highlighted:
· Net sales increased 10% to $1.827 billion.
· Adjusted diluted EPS increased 15.3% to $0.83.
· Repurchased 5.7 million shares during the quarter for $249 million.
· Acquired SKYCIG, a British e-cigarette business on Oct. 1.
The Peter Lynch Chart suggests that the company is currently overvalued:
Lorillard has a market cap of $19.49 billion. Its shares are currently trading at around $52.90 with a P/E ratio of 16.40 and a P/S ratio of 2.90. The company had an annual average earnings growth of 13.40% over the past five years.
Potash Corporation of Saskatchewan (POT)
On Nov. 14, Potash Corporation of Saskatchewan declared a dividend of $0.35 per share, representing a 3.70% dividend yield for the company. This dividend is payable on Feb. 6 to shareholders of the record at the close of business on Jan. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 25.40%
· 5-year: 41.60%
· 3-year: 61.50%
Potash Corporation is an integrated fertilizer and related industrial and feed products company. The company owns and operates five potash mines in Saskatchewan and one in New Brunswick. Its phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, phosphate feed and industrial acid, which is used in food products and industrial processes.
Potash Corporation’s historical revenue and net income:
The top guru shareholders of Potash Corporation of Saskatchewan:
1. Jean-Marie Eveillard: 18,141,013 shares, representing 2.09% of the company’s shares out.
2. PRIMECAP: 9,288,859 shares, representing 1.07% of the company’s shares outstanding.
3. Brian Rogers: 3,250,000 shares, representing 0.37% of the company’s shares outstanding.
The analysis on Potash reports that the company’s asset growth is currently faster than its revenue growth, its revenue has been in decline over the past year and its operating margin is expanding. The analysis also notes that the dividend yield is close to a 10-year high.
The company’s third quarter results highlighted:
· $0.41 per share, down from $0.74 per share last year.
· EBITDA of $654 million, and $2.7 billion for the first nine months.
· Cash flow from operations of $616 million, down from $759 million.
· A drop in gross margin from $554 million last year to $228 million this year.
The Peter Lynch Chart suggests that the company is currently undervalued:
Potash Corporation of Saskatchewan has a market cap of $27.97 billion. Its shares are currently trading at around $32.41 with a P/E ratio of 14.50, a P/S ratio of 3.85 and a P/B ratio of 2.83. The company had an annual average earnings growth of 40.90% over the past ten years.
GuruFocus rated Potash the business predictability rank of 2.5-star.
Sysco Corporation (SYY)
On Nov. 16, Sysco Corporation declared a dividend of $0.29 per share, representing a 3.30% dividend yield for the company. This dividend is payable on Jan. 24 to shareholders of the record at the close of business on Jan. 3, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 9.3%
· 5-year: 4.2%
· 3-year: 3.9%
The company through its subsidiaries and divisions is the North American distributor of food and related products mainly to the foodservice industry. It provides food products and related services to customers throughout the restaurant, healthcare and educational industries as well as for lodging establishments and other foodservice customers.
Sysco’s historical revenue and net income:
The top guru shareholders of Sysco:
1. Donald Yacktman: 33,069,530 shares, representing 5.62% of the company’s shares outstanding.
2. Jean-Marie Eveillard: 25,244,929 shares, representing 4.29% of the company’s shares out.
3. Yacktman Fund: 13,960,000 shares, representing 2.37% of the company’s shares outstanding.
The analysis on Sysco reports that the company’s dividend yield is near a five-year low, its price is close to a five-year high and that over the past three years Sysco has issued $630.916 million.
The company recently released its first quarter results which highlighted:
· Sales of $11.7 billion, up 5.7% from last year.
· Operating income of $478 million, flat from last year.
· Diluted EPS of $0.48, down 2% from last year’s $0.49 per share.
· Gross profit of $2.1 billion, up 1.8% from last year.
The Peter Lynch Chart suggests that Sysco is currently overvalued:
Sysco has a market cap of $19.54 billion. Its shares are currently trading at around $33.59 with a P/E ratio of 20.10, a P/S ratio of 0.44 and a P/B ratio of 3.77. Sysco had an annual average earnings growth of 4.00%
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· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following six companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Waste Management (WM)
On Nov. 12, Waste Management declared a dividend of $0.365 per share, representing a 3.20% dividend yield for the company. This dividend is payable on Dec. 20 to shareholders of the record at the close of business on Dec. 4, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 37%
· 5-year: 7.3%
· 3-year: 7%
Waste Management is a provider of waste management services in North America. The Company's subsidiaries provide collection, transfer, recycling and disposal services.
Waste Management’s historical revenue and net income:
The analysis on Waste Management reports that the company’s revenue has slowed down over the past year, it has issued $747 million of debt over the past three years and its price is sitting at a 10-year high.
Top guru shareholders of Waste Management:
1. Bill Gates: 18,633,672 shares, representing 3.97% of the company’s shares outstanding.
2. Mario Gabelli: 1,191,967 shares, representing 0.25% of the company’s shares outstanding.
3. Jim Simons: 749,900 shares, representing 0.16% of the company’s shares outstanding.
The company’s recently released third quarter financials reported:
· Revenue of $3.62 billion, up from $3.46 billion last year.
· Net income was $291 million, or $0.62 per share, up from $214 million and $0.46 per share. This represents a 30% increase.
· Income from operations grew $77 million.
· Net cash provided by operating activities was $736 million, up $162 million from last year.
· Company returned $171 million to shareholders in the form of dividends.
The Peter Lynch Chart suggests that the company is currently overvalued:
Waste Management has a market cap of $21.22 billion. Its shares are currently trading at around $45.22 with a P/E ratio of 22.70, a P/S ratio of 3.20% and a P/B ratio of 3.20. The company had an annual average earnings growth of 4% over the past 10 years.
CenturyLink (CTL)
On Nov. 12, CenturyLink declared a dividend of $0.54 per share, representing a 7.30% dividend yield for the company. This dividend is payable on Dec. 6 to shareholders of the record at the close of business on Nov. 25, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 46%
· 5-year: 14%
· 3-year: 1.20%
CenturyLink is the third largest telecommunications company in the U.S. and is recognized as a leader in the network services market by technology industry analyst firms. The company is a global leader in cloud infrastructure and hosted IT solutions for enterprise customers.
CenturyLink’s historical revenue and net income:
The analysis on CenturyLink reports that the company’s revenue has slowed down over the past year, its P/B and P/S ratios are near historical lows and its gross and operating margins have been in long-time declines.
Top guru shareholders of CenturyLink:
1. NWQ Managers: 6,760,064 shares, representing 1.13% of the company’s shares outstanding.
2. Brian Rogers: 4,136,179 shares, representing 0.69% of the company’s shares outstanding.
The company’s third quarter financials reported:
· Revenue of $4.1 billion, declining 1% from last year.
· Generated FCF of $761 million.
· Purchased and retired 11.3 million shares for $385 million during the third quarter.
· Adjusted net income of $375 million, or $0.63 per share, down from the 2012 third quarter of $413 million, or $0.66 per share.
CenturyLink has a market cap of $18.95 billion. Its shares are currently trading at around $32.06 with a P/S ratio of 1.10 and a P/B ratio of 1.20. The company had an annual average earnings growth of 3.00% over the past ten years.
Prudential Financial (PRU)
On Nov. 12, Prudential Financial declared a dividend of $0.53 per share, representing a 3.20% dividend yield for the company. This dividend is payable on Dec. 19 to shareholders of the record at the close of business on Nov. 26, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 10.7%
· 5-year: 31.8%
· 3-year: 31.7%
Prudential Financial offers financial products and services including life insurance, annuities, retirement services, mutual funds and investment management. Its business is separated into Financial Services Businesses and Closed Block Business.
Prudential Financial’s historical revenue and net income:
The analysis on Prudential reports that the company’s financial strength is poor, its price is sitting at a five-year high and over the past three years the company has issued $3.1 billion of debt.
The top guru shareholders of Prudential:
1. Diamond Hill Capital: 3,772,797 shares, representing 0.81% of the company’s shares out.
2. David Tepper: 1,692,581 shares, representing 0.36% of the company’s shares outstanding.
3. RS Investment: 866,740 shares, representing 0.19% of the company’s shares outstanding.
The company’s recent financial results highlighted:
· Operating income up $919 million or 90% from last year to $1.393 billion, or $2.94 per share.
· Earnings from operating divisions up 27%.
· Net income of $981, or $2.07 per share, up from a net loss of $627 million, or and EPS of $1.34.
· Acquired Hartford’s individual life insurance business.
Prudential Financial has a market cap of $41.37 billion. Its shares are currently trading at around $89.35 with a P/S ratio of 0.50 and a P/B ratio of 1.20.
Lorillard (LO)
On Nov. 14, Lorillard declared a dividend of $0.55 per share, representing a 4.10% dividend yield for the company. This dividend is payable on Dec. 10 to shareholders of the record at the close of business on Nov. 26, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 0%
· 5-year: 31.40%
· 3-year: 17.30%
Lorillard is engaged in the manufacture and sale of cigarettes. Its principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with substantially all of its sales in the U.S.
Lorillard’s historical revenue and net income:
The top guru shareholders of Lorillard:
1. Jean-Marie Eveillard: 7,203,461 shares, representing 1.93% of the company’s shares out.
2. Jeremy Grantham: 4,306,660 shares, representing 1.15% of the company’s shares outstanding.
3. James Barrow: 2,727,748 shares, representing 0.73% of the company’s shares outstanding.
The analysis on Lorillard reports that the company’s revenue has slowed down over the past year, its dividend yield is near a three-year low and its price is near a 10-year high.
The company’s third quarter results highlighted:
· Net sales increased 10% to $1.827 billion.
· Adjusted diluted EPS increased 15.3% to $0.83.
· Repurchased 5.7 million shares during the quarter for $249 million.
· Acquired SKYCIG, a British e-cigarette business on Oct. 1.
The Peter Lynch Chart suggests that the company is currently overvalued:
Lorillard has a market cap of $19.49 billion. Its shares are currently trading at around $52.90 with a P/E ratio of 16.40 and a P/S ratio of 2.90. The company had an annual average earnings growth of 13.40% over the past five years.
Potash Corporation of Saskatchewan (POT)
On Nov. 14, Potash Corporation of Saskatchewan declared a dividend of $0.35 per share, representing a 3.70% dividend yield for the company. This dividend is payable on Feb. 6 to shareholders of the record at the close of business on Jan. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 25.40%
· 5-year: 41.60%
· 3-year: 61.50%
Potash Corporation is an integrated fertilizer and related industrial and feed products company. The company owns and operates five potash mines in Saskatchewan and one in New Brunswick. Its phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, phosphate feed and industrial acid, which is used in food products and industrial processes.
Potash Corporation’s historical revenue and net income:
The top guru shareholders of Potash Corporation of Saskatchewan:
1. Jean-Marie Eveillard: 18,141,013 shares, representing 2.09% of the company’s shares out.
2. PRIMECAP: 9,288,859 shares, representing 1.07% of the company’s shares outstanding.
3. Brian Rogers: 3,250,000 shares, representing 0.37% of the company’s shares outstanding.
The analysis on Potash reports that the company’s asset growth is currently faster than its revenue growth, its revenue has been in decline over the past year and its operating margin is expanding. The analysis also notes that the dividend yield is close to a 10-year high.
The company’s third quarter results highlighted:
· $0.41 per share, down from $0.74 per share last year.
· EBITDA of $654 million, and $2.7 billion for the first nine months.
· Cash flow from operations of $616 million, down from $759 million.
· A drop in gross margin from $554 million last year to $228 million this year.
The Peter Lynch Chart suggests that the company is currently undervalued:
Potash Corporation of Saskatchewan has a market cap of $27.97 billion. Its shares are currently trading at around $32.41 with a P/E ratio of 14.50, a P/S ratio of 3.85 and a P/B ratio of 2.83. The company had an annual average earnings growth of 40.90% over the past ten years.
GuruFocus rated Potash the business predictability rank of 2.5-star.
Sysco Corporation (SYY)
On Nov. 16, Sysco Corporation declared a dividend of $0.29 per share, representing a 3.30% dividend yield for the company. This dividend is payable on Jan. 24 to shareholders of the record at the close of business on Jan. 3, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 9.3%
· 5-year: 4.2%
· 3-year: 3.9%
The company through its subsidiaries and divisions is the North American distributor of food and related products mainly to the foodservice industry. It provides food products and related services to customers throughout the restaurant, healthcare and educational industries as well as for lodging establishments and other foodservice customers.
Sysco’s historical revenue and net income:
The top guru shareholders of Sysco:
1. Donald Yacktman: 33,069,530 shares, representing 5.62% of the company’s shares outstanding.
2. Jean-Marie Eveillard: 25,244,929 shares, representing 4.29% of the company’s shares out.
3. Yacktman Fund: 13,960,000 shares, representing 2.37% of the company’s shares outstanding.
The analysis on Sysco reports that the company’s dividend yield is near a five-year low, its price is close to a five-year high and that over the past three years Sysco has issued $630.916 million.
The company recently released its first quarter results which highlighted:
· Sales of $11.7 billion, up 5.7% from last year.
· Operating income of $478 million, flat from last year.
· Diluted EPS of $0.48, down 2% from last year’s $0.49 per share.
· Gross profit of $2.1 billion, up 1.8% from last year.
The Peter Lynch Chart suggests that Sysco is currently overvalued:
Sysco has a market cap of $19.54 billion. Its shares are currently trading at around $33.59 with a P/E ratio of 20.10, a P/S ratio of 0.44 and a P/B ratio of 3.77. Sysco had an annual average earnings growth of 4.00%
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
Try a free 7-day premium membership.
