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Top Dividend Growers of the Week

May 27, 2014 | About:
Monica Wolfe

Monica Wolfe

121 followers

During the past week, GuruFocus recognized five companies as dividend growers. In order to be qualified for this list, the company had to:

  • Have a dividend 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 five 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:

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McDonald’s (MCD)

On May 22, McDonald’s declared a dividend of $0.810 per share, representing 3.1% dividend yield for the company. This dividend is payable on June 16 to shareholders of the record at the close of business on June 2, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 21.30%

- 5-year: 11.40%

- 3-year: 11.30%

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McDonald’s Corporation franchises and operates McDonald's restaurants in the food service industry. The company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers.

McDonald’s Corp’s historical revenue and net income:

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The analysis on McDonald’s reports that the company’s operating margin is expanding, its dividend yield is near 3-year high, and its P/E and P/B ratios are trading near historic lows. The analysis also notes that the company’s price is near a 10-year high, its revenue per share has slowed down over the past year, and the company has issued $2 billion in debt over the past three years.

The Peter Lynch Chart suggests that the company is currently overvalued:

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McDonald’s has a market cap of $101.4 billion. Its shares are currently trading at around $102.59 with a P/E ratio of 18.60, a P/S ratio of 3.60 and a P/B ratio of 6.30. The company had an annual average earnings growth of 13.40% over the past ten years.

GuruFocus rated McDonald’s the business predictability rank of 4.5-star.

Williams Companies (WMB)

On May 22, Williams Companies declared a dividend of $0.425 per share, representing 3.20% dividend yield for the company. This dividend is payable on June 30 to shareholders of the record at the close of business on June 13, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 28.70%

- 5-year: 38.70%

- 3-year: 43.70%

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Williams Companies is a natural gas company, which mainly finds, produces, gathers, processes and transports natural gas. The company owns interests in or operates 15,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines.

Williams Companies’ historical revenue and net income:

The analysis on Williams Companies reports that the company’s revenue has been in decline over the past five years, it has issued $3.5 billion of debt over the past three years, its price is currently trading near a 10-year high and its operating margin has shown signs of expansion. The company’s dividend yield is also sitting at a 3-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Williams Companies has a market cap of $31.95 billion. Its shares are currently trading at around $46.60 with a P/E ratio of 78.90, a P/S ratio of 4.70 and a P/B ratio of 7.00. The company had an annual average earnings growth of 1.80% over the past ten years.

PPL Corp (PPL)

On May 21 PPL Corp. declared a dividend of $0.373 per share, representing 4.40% dividend yield for the company. This dividend is payable on July 1 to shareholders of the record at the close of business on June 10, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 6.10%

- 5-year: 1.60%

- 3-year: 1.60%

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PPL Corp is an energy and utility holding company. Through subsidiaries, PPL generates electricity from power plants in the northeastern, northwestern and southeastern U.S., markets wholesale and retail energy mainly in the northeastern and northwestern portions of the U.S., delivers electricity to customers in Pennsylvania, Kentucky, Virginia, Tennessee and the U.K.

PPL Corp’s historical revenue and net income:

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The analysis on PPL Corp reports that the company has issued $9.4 billion of debt over the past three years, its revenue has been in decline over the past year and its dividend yield is near a 3-year low. It also notes that the company’s price is near a 5-year high and its operating margin is expanding.

The Peter Lynch Chart suggests that the company is currently overvalued:

1401208350719.png

PPL has a market cap of $21.69 billion. Its shares are currently trading at around $34.34 with a P/E ratio of 21.70, a P/S ratio of 2.20 and a P/B ratio of 1.70. The company had an annual average earnings growth of 1.70% over the past ten years.

Xcel Energy (XEL)

On May21, Xcel Energy declared a dividend of $0.300 per share, representing 3.80% dividend yield for the company. This dividend is payable on July 20 to shareholders of the record at the close of business on June 19, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 3.40%

- 5-year: 3.30%

- 3-year: 3.40%

1401202902190.png

Xcel Company is a holding company, with subsidiaries engaged mainly in the utility business. The company's utility subsidiaries are engaged mainly in the generation, purchase, transmission, distribution and sale of electricity and in the purchase, transportation, distribution and sale of natural gas.

Xcel’s historical revenue and earnings growth:

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The analysis on Xcel reports that the company’s revenue has been in decline for the past five years, the price is sitting on a 10-year high and its operating margin has been expanding. The analysis also notes that the company has issued $2.1 billion of debt over the past three years.

The Peter Lynch Chart suggests that the company’s currently overvalued:

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Xcel Energy has a market cap of $15.23 billion. Its shares are currently trading at around $30.35 with a P/E ratio of 15.60, a P/S ratio of 1.30 and a P/B ratio of 1.60. The company had an annual average earnings growth of 3.80% over the past ten years.

AvalonBay Communities (AVB)

On May 21, AvalonBay Communities declared a dividend of $1.16 per share, representing 3.10% dividend yield for the company. This dividend is payable on July 15 to shareholders of the record at the close of business on June 30, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 4.20%

- 5-year: 4.60%

- 3-year: 6.20%

1401208390077.png

AvalonBay Communities is a real estate investment trust which focuses on the ownership and operation of apartment communities. The company is engaged in the development, redevelopment, acquisition, ownership and operation of communities in high barrier-to-entry markets in the U.S.

AvalonBay’s historical revenue and net income:

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The analysis on AvalonBay reports that the company’s operating margin is expanding, its dividend yield is close to a 3-year high and its P/B and P/S ratios are trading at 3-year lows.

The Peter Lynch Chart suggests that the company is currently overvalued:

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AvalonBay Communities has a market cap of $18.2 billion. Its shares are currently trading at around $140.39 with a P/E ratio of 58.00, a P/S ratio of 10.20 and a P/B ratio of 2.10. The company had an annual average earnings growth of 3.70% over the past ten years.

GuruFocus rated AvalonBay the business predictability rank of 2.5-star.

To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.

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