Dividend growth investing is a popular approach that can fit within the ModernGraham methods. This is a look at companies reviewed by ModernGraham that have grown their dividends annually for at least the last 20 years.
Recently, I began tracking the number of years a company has grown its dividend and providing that information in my individual company valuations. I have covered 451 companies since that tracking began. Eventually I will have this data on each of the more than 550 companies covered by ModernGraham so this list should continue to grow for the next few months.
Out of the 451 companies on which I have dividend growth data, only 51 have grown dividends annually for at least the last 20 years. Here is an overview of those companies:
The elite
The following companies have been rated as undervalued and suitable for either the Defensive Investor or the Enterprising Investor:
AFLAC
AFLAC Inc. (AFL, Financial) qualifies for both the Enterprising Investor and the more conservative Defensive Investor. In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial position. As a result, all value investors following the ModernGraham approach based on Graham's methods should feel comfortable proceeding with further research.
As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $4.72 in 2012 to an estimated $6.24 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 0.40% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
Franklin Resources
Franklin Resources Inc. (BEN, Financial) qualifies for both the Enterprising Investor and the more conservative Defensive Investor. In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial condition. As a result, all value investors following the ModernGraham approach based on Graham's methods should feel comfortable proceeding with further research.
As for a valuation, the company appears to be undervalued after growing its EPSmg from $2.50 in 2012 to an estimated $3.17 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.00% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
Cintas
Cintas Corporation (CTAS, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be undervalued after growing its EPSmg from $2.07 in 2013 to an estimated $4.36 for 2017. This level of demonstrated earnings growth outpaces the market's implied estimate of 8.06% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
People's United Financial
People's United Financial Inc. (PBCT, Financial) qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company's strong financial position. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be undervalued after growing its EPSmg from 51 cents in 2012 to an estimated 83 cents for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 4.97% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
T. Rowe Price Group
T. Rowe Price Group Inc. (TROW, Financial) qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the high PB ratio. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be undervalued after growing its EPSmg from $2.75 in 2012 to an estimated $4.25 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 4.02% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
United Technologies
United Technologies Corporation (UTX, Financial) qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be undervalued after growing its EPSmg from $5.17 in 2012 to an estimated $7.65 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 2.29% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
VF Corporation
VF Corp. (VFC, Financial) qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio and the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach based on Graham's methods should feel comfortable proceeding with further research into the company.
As for a valuation, the company appears to be undervalued after growing its EPSmg from $1.48 in 2011 to an estimated $2.66 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 7.59% annual earnings loss over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
The good
The following companies have been rated as fairly valued and suitable for either the Defensive Investor or the Enterprising Investor:
Cincinnati Financial
Cincinnati Financial Corporation (CINF, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last 10 years and the high PEmg ratio. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be fairly valued after growing its EPSmg from $2.12 in 2012 to an estimated $3.21 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 6.36% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value within a margin of safety relative to the price. (See the full valuation)
W.W. Grainger
W.W. Grainger Inc. (GWW, Financial) qualifies for both the Enterprising Investor and the more conservative Defensive Investor. The Defensive Investor is only initially concerned by the high PB ratio while the Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach based on Graham's methods should feel comfortable proceeding with further research.
As for a valuation, the company appears to be undervalued after growing its EPSmg from $7.12 in 2011 to an estimated $10.94 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 4.71% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
Ross Stores
Ross Stores Inc. (ROST, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.
As for a valuation, the company appears to be fairly valued after growing its EPSmg from $1.36 in 2013 to an estimated $2.35 for 2017. This level of demonstrated earnings growth supports the market's implied estimate of 7.44% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Graham's formula, returns an estimate of intrinsic value within a margin of safety relative to the price. (See the full valuation)
The full list
For the investor type, a "D" indicates the company is suitable for the Defensive Investor, an "E" indicates the company is suitable for the Enterprising Investor, and an "S" indicates the company is considered speculative at this time.
| Ticker | Name with Link | Investor Type | Latest Valuation Date | MG Value | Recent Price | Price as a percent of Value | PEmg Ratio | Div. Yield |
| ADM | Archer Daniels Midland Company | E | 2/5/2016 | --- | $43.91 | --- | --- | 2.60% |
| ADP | Automatic Data Processing | E | 5/17/2016 | --- | $95.18 | --- | --- | 2.14% |
| AFL | AFLAC Incorporated | D | 2/4/2016 | --- | $73.33 | --- | --- | 2.18% |
| ALB | Albemarle Corporation | D | 2/19/2016 | --- | $84.94 | --- | --- | 1.39% |
| AOS | A. O. Smith Corp. | E | 6/11/2016 | --- | $91.77 | --- | --- | 0.88% |
| APD | Air Products & Chemicals Inc. | E | 2/9/2016 | --- | $149.67 | --- | --- | 2.20% |
| BCR | C R Bard Inc. | E | 2/17/2016 | --- | $229.87 | --- | --- | 0.41% |
| BDX | Becton Dickinson and Co. | S | 8/19/2015 | --- | $173.14 | --- | --- | 1.46% |
| BEN | Franklin Resources Inc. | D | 1/28/2016 | --- | $34.21 | --- | --- | 1.93% |
| BF.B | Brown-Forman Corporation | S | 9/25/2015 | --- | $97.87 | --- | --- | 1.32% |
| BMS | Bemis Company Inc. | E | 7/1/2016 | --- | $52.22 | --- | --- | 2.16% |
| CAH | Cardinal Health Inc. | S | 7/3/2016 | --- | $82.77 | --- | --- | 1.87% |
| CINF | Cincinnati Financial Corporation | E | 5/21/2016 | --- | $74.60 | --- | --- | 2.49% |
| CL | Colgate-Palmolive Company | S | 1/27/2016 | --- | $73.95 | --- | --- | 2.06% |
| CLX | Clorox Co. | S | 9/10/2015 | --- | $133.63 | --- | --- | 2.28% |
| CTAS | Cintas Corporation | E | 7/21/2016 | --- | $108.25 | --- | --- | 0.97% |
| DOV | Dover Corp. | D | 7/8/2016 | --- | $71.87 | --- | --- | 2.31% |
| ECL | Ecolab Inc. | S | 6/26/2016 | --- | $119.47 | --- | --- | 1.14% |
| EMR | Emerson Electric Co. | S | 2/12/2016 | --- | $55.79 | --- | --- | 3.39% |
| ESS | Essex Property Trust Inc. | S | 10/9/2015 | --- | $223.98 | --- | --- | 2.64% |
| EXPD | Expeditors International of Washington | E | 6/25/2016 | --- | $50.08 | --- | --- | 1.44% |
| GPC | Genuine Parts Company | E | 7/8/2016 | --- | $100.50 | --- | --- | 2.49% |
| GWW | W. W. Grainger Inc. | D | 1/8/2016 | --- | $219.30 | --- | --- | 2.13% |
| HP | Helmerich & Payne Inc. | S | 6/23/2016 | --- | $63.12 | --- | --- | 4.36% |
| HRL | Hormel Foods Corp. | E | 2/15/2016 | --- | $36.69 | --- | --- | 1.42% |
| IBM | International Business Machines Corp. | S | 11/10/2015 | --- | $161.80 | --- | --- | 3.21% |
| ITW | Illinois Tool Works Inc. | D | 7/6/2016 | --- | $115.14 | --- | --- | 1.86% |
| JNJ | Johnson & Johnson | D | 1/8/2016 | --- | $124.81 | --- | --- | 2.40% |
| KMB | Kimberly-Clark Corp. | S | 6/24/2016 | --- | $132.61 | --- | --- | 2.68% |
| LEG | Leggett & Platt Inc. | E | 2/16/2016 | --- | $53.40 | --- | --- | 2.38% |
| LLTC | Linear Technology Corporation | E | 7/12/2016 | --- | $49.25 | --- | --- | 2.48% |
| LOW | Lowe's Companies Inc. | S | 1/8/2016 | --- | $80.78 | --- | --- | 1.32% |
| MCD | McDonald's Corporation | E | 5/14/2016 | --- | $121.57 | --- | --- | 2.86% |
| MDT | Medtronic PLC | D | 7/12/2016 | --- | $87.26 | --- | --- | 1.74% |
| MKC | McCormick & Company Inc. | S | 8/15/2015 | --- | $103.84 | --- | --- | 1.57% |
| MMM | 3M Co. | E | 2/3/2016 | --- | $176.46 | --- | --- | 2.37% |
| NEE | NextEra Energy Inc. | S | 8/13/2015 | --- | $128.54 | --- | --- | 2.47% |
| PBCT | People's United Financial Inc. | D | 6/20/2016 | --- | $15.32 | --- | --- | 4.37% |
| PEP | PepsiCo Inc. | S | 7/13/2016 | --- | $108.19 | --- | --- | 2.64% |
| PG | Procter & Gamble Co. | S | 7/8/2016 | --- | $85.35 | --- | --- | 3.10% |
| PH | Parker-Hannifin Corp. | D | 7/15/2016 | --- | $113.27 | --- | --- | 2.22% |
| PX | Praxair Inc. | E | 6/13/2016 | --- | $118.00 | --- | --- | 2.46% |
| ROST | Ross Stores Inc. | E | 6/21/2016 | --- | $61.42 | --- | --- | 0.77% |
| SHW | Sherwin-Williams Co. | S | 7/12/2016 | --- | $291.71 | --- | --- | 0.98% |
| SWK | Stanley Black & Decker Inc. | S | 1/28/2016 | --- | $121.78 | --- | --- | 1.78% |
| SYY | SYSCO Corporation | S | 9/8/2015 | --- | $51.80 | --- | --- | 2.36% |
| TROW | T. Rowe Price Group Inc. | D | 2/17/2016 | --- | $70.66 | --- | --- | 2.97% |
| UTX | United Technologies Corporation | D | 5/18/2016 | --- | $106.88 | --- | --- | 2.40% |
| VFC | VF Corp. | E | 2/1/2016 | --- | $62.01 | --- | --- | 2.23% |
| WBA | Walgreens Boots Alliance Inc. | S | 7/6/2016 | --- | $81.20 | --- | --- | 1.75% |
| WMT | Walmart Stores Inc. | S | 5/20/2016 | --- | $73.49 | --- | --- | 2.67% |
Disclosure:Â The author held a long position in Dover Corporation and People's United Financial but did not hold a position in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.
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