Dividend growth investing is a popular approach that can fit within the ModernGraham methods. This is a look at companies that have grown their dividends annually for at least the last 20 years.
For all 643 companies covered by ModernGraham, I track the number of years a company has grown its dividend and provide that information in my individual company valuations.
Out of the 643 companies, only 63 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 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. 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 (normalized earnings) from $4.72 in 2012 to an estimated $6.22 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.36% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham's formula, returns an estimate of intrinsic value above the price.
At the time of valuation, further research into AFLAC revealed the company was trading below its Graham Number of $87.98. The company pays a dividend of $1.64 per share for a yield of 2.3%, putting it among the best dividend-paying stocks today. Its PEmg (price over earnings per share - ModernGraham) was 11.22, which was below the industry average of 18.78. By some methods of valuation that makes it one of the most undervalued stocks in its industry. (See the full valuation.)
Cintas
Cintas Corp. (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 price-book (P/B) 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 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 P/B 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 $4.22 for 2016. This level of demonstrated earnings growth outpaces the market's implied estimate of 3.89% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value above the price.
At the time of valuation, further research into T. Rowe Price Group revealed the company was trading above its Graham Number of $41.69. The company pays a dividend of $2.12 per share, for a yield of 3.1%, putting it among the best dividend-paying stocks today. Its PEmg was 16.27, which was below the industry average of 19.87. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of -7 cents. (See the full valuation.)
United Technologies
United Technologies Corp. (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 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:
A.O. Smith
A.O. Smith Corp. (AOS, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and P/B 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 $1.9 in 2012 to an estimated $2.82 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 4.47% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value below the price. (See the full valuation.)
Franklin Resources
Franklin Resources Inc. (BEN, 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. 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 fairly valued after growing its EPSmg from $2.5 in 2012 to an estimated $3.2 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 2.18% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the price.
At the time of valuation, further research into Franklin Resources revealed the company was trading above its Graham Number of $35.55. The company pays a dividend of 69 cents per share, for a yield of 1.9%. Its PEmg was 11.51, which was below the industry average of 19.87. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $14.41. (See the full valuation.)
Cincinnati Financial
Cincinnati Financial Corp. (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 returns an estimate of intrinsic value within a margin of safety relative to the price. (See the full valuation.)
Hormel Foods
Hormel Foods Corp. (HRL, 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 P/B 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 81 cents in 2012 to an estimated $1.29 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 9.9% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the price.
At the time of valuation, further research into Hormel Foods revealed the company was trading above its Graham Number of $17.33. The company pays a dividend of 56 cents per share for a yield of 1.4%. Its PEmg was 29.96, which was below the industry average of 30.19. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of 3 cents. (See the full valuation.)
Johnson & Johnson
Johnson & Johnson (JNJ, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and P/B 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 (normalized earnings) from $4.06 in 2012 to an estimated $5.51 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 6.14% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the price.
At the time of valuation, further research into Johnson & Johnson revealed the company was trading above its Graham Number of $60.27. The company pays a dividend of $3.1 per share for a yield of 2.7%, putting it among the best dividend-paying stocks today. Its PEmg was 20.79, which was below the industry average of 28.95. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-1.54. (See the full valuation.)
Leggett & Platt
Leggett & Platt Inc. (LEG, Financial) is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last 10 years and the high PEmg and P/B 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 fairly valued after growing its EPSmg from $1.21 in 2012 to an estimated $1.93 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 9.31% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the price.
At the time of valuation, further research into Leggett & Platt revealed the company was trading above its Graham Number of $21.85. The company pays a dividend of $1.3 per share, for a yield of 2.5%, putting it among the best dividend-paying stocks today. Its PEmg was 27.11, which was below the industry average of 27.31. By some methods of valuation that makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-4.2. (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. 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 fairly valued after growing its EPSmg from 51 cents in 2012 to an estimated 83 cents for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 7.13% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value within a margin of safety relative to the price. (See the full valuation.)
Ross Stores
Ross Stores Inc. (ROST) 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 P/B 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 returns an estimate of intrinsic value within a margin of safety relative to the price. (See the full valuation.)
VF Corp.
VF Corp. (VFC) 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 P/B 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 $1.83 in 2012 to an estimated $2.72 for 2016. This level of demonstrated earnings growth supports the market's implied estimate of 7.2% annual earnings growth over the next seven to 10 years. As a result, the ModernGraham valuation model, based on Benjamin 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 Co. | E | Jan. 3 | --- | $44.71 | --- | --- | 2.64% |
| ADP | Automatic Data Processing | E | Nov. 20, 2016 | --- | $102.95 | --- | --- | 2.06% |
| AFL | AFLAC Inc. | D | Dec. 19, 2016 | --- | $69.90 | --- | --- | 2.35% |
| ALB | Albemarle Corp. | S | Aug. 25, 2016 | --- | $95.06 | --- | --- | 1.25% |
| AOS | A.O. Smith Corp. | E | June 11, 2016 | --- | $49.12 | --- | --- | 1.65% |
| APD | Air Products & Chemicals Inc. | S | Aug. 16, 2016 | --- | $147.04 | --- | --- | 2.27% |
| BCR | C.R. Bard Inc. | E | Aug. 25, 2016 | --- | $230.86 | --- | --- | 0.42% |
| BDX | Becton Dickinson and Co. | S | Jan. 8 | --- | $170.87 | --- | --- | 1.55% |
| BEN | Franklin Resources Inc. | D | Aug. 21, 2016 | --- | $41.13 | --- | --- | 1.68% |
| BF.B | Brown-Forman Corp. | S | Sept. 25, 2015 | --- | $45.69 | --- | --- | 2.82% |
| BMS | Bemis Co. Inc. | E | July 1, 2016 | --- | $51.50 | --- | --- | 2.19% |
| CAH | Cardinal Health Inc. | S | July 3, 2016 | --- | $74.74 | --- | --- | 2.07% |
| CFR | Cullen/Frost Bankers Inc. | E | Dec. 8, 2016 | --- | $90.16 | --- | --- | 2.37% |
| CHRW | C.H. Robinson Worldwide Inc. | S | Aug. 29, 2016 | --- | $74.63 | --- | --- | 2.24% |
| CINF | Cincinnati Financial Corp. | E | May 21, 2016 | --- | $70.14 | --- | --- | 2.65% |
| CL | Colgate-Palmolive Co. | S | Jan. 27, 2016 | --- | $68.10 | --- | --- | 2.23% |
| CLC | CLARCOR Inc. | E | Jan. 8 | --- | $83.04 | --- | --- | 1.06% |
| CLX | Clorox Co. | S | Sept. 10, 2015 | --- | $121.20 | --- | --- | 2.52% |
| CTAS | Cintas Corp. | E | July 21, 2016 | --- | $114.71 | --- | --- | 0.92% |
| CVX | Chevron Corp. | S | Aug. 18, 2016 | --- | $116.90 | --- | --- | 3.66% |
| DOV | Dover Corp. | D | July 8, 2016 | --- | $80.14 | --- | --- | 2.07% |
| ECL | Ecolab Inc. | S | June 26, 2016 | --- | $120.96 | --- | --- | 1.12% |
| ED | Consolidated Edison Inc. | S | Aug. 21, 2016 | --- | $72.83 | --- | --- | 3.62% |
| EMR | Emerson Electric Co. | S | Feb. 12, 2016 | --- | $59.36 | --- | --- | 3.18% |
| EPD | Enterprise Products Partners LP | S | Aug. 27, 2016 | --- | $28.40 | --- | --- | 5.46% |
| ESS | Essex Property Trust Inc. | S | Oct. 9, 2015 | --- | $227.74 | --- | --- | 2.60% |
| EXPD | Expeditors International of Washington | E | June 25, 2016 | --- | $52.55 | --- | --- | 1.37% |
| GPC | Genuine Parts Co. | E | July 8, 2016 | --- | $96.34 | --- | --- | 2.59% |
| GWW | W.W. Grainger Inc. | E | Jan. 12 | --- | $249.64 | --- | --- | 1.91% |
| HP | Helmerich & Payne Inc. | S | June 23, 2016 | --- | $79.11 | --- | --- | 3.48% |
| HRL | Hormel Foods Corp. | E | Aug. 24, 2016 | --- | $36.50 | --- | --- | 1.53% |
| IBM | International Business Machines Corp. | S | Nov. 10, 2015 | --- | $175.29 | --- | --- | 2.97% |
| ITW | Illinois Tool Works Inc. | D | July 6, 2016 | --- | $126.84 | --- | --- | 1.69% |
| JNJ | Johnson & Johnson | E | Jan. 16 | --- | $111.76 | --- | --- | 2.77% |
| KMB | Kimberly Clark Corp. | S | June 24, 2016 | --- | $121.36 | --- | --- | 2.93% |
| KO | The Coca-Cola Co. | S | July 28, 2016 | --- | $41.77 | --- | --- | 3.21% |
| LEG | Leggett & Platt Inc. | E | Aug. 25, 2016 | --- | $48.24 | --- | --- | 2.69% |
| LLTC | Linear Technology Corp. | E | July 12, 2016 | --- | $62.64 | --- | --- | 1.95% |
| LOW | Lowe's Companies Inc. | S | Jan. 8, 2016 | --- | $73.69 | --- | --- | 1.45% |
| MCD | McDonald's Corp. | S | Nov. 20, 2016 | --- | $120.87 | --- | --- | 2.95% |
| MDT | Medtronic PLC Ordinary Shares | D | July 12, 2016 | --- | $74.21 | --- | --- | 2.05% |
| MKC | McCormick & Co. Inc. | S | Jan. 3 | --- | $94.26 | --- | --- | 1.79% |
| MMM | 3M Co. | E | Dec. 13, 2016 | --- | $177.22 | --- | --- | 2.46% |
| NEE | NextEra Energy Inc. | S | Dec. 21, 2016 | --- | $119.01 | --- | --- | 2.84% |
| NNN | National Retail Properties Inc. | S | Dec. 4, 2016 | --- | $45.15 | --- | --- | 3.90% |
| PBCT | People's United Financial Inc. | D | June 20, 2016 | --- | $18.89 | --- | --- | 3.55% |
| PEP | PepsiCo Inc. | S | July 13, 2016 | --- | $104.39 | --- | --- | 2.74% |
| PG | Procter & Gamble Co. | S | July 8, 2016 | --- | $87.81 | --- | --- | 3.02% |
| PH | Parker-Hannifin Corp. | D | July 15, 2016 | --- | $145.64 | --- | --- | 1.73% |
| PPG | PPG Industries Inc. | S | Jan. 16 | --- | $102.42 | --- | --- | 1.48% |
| PX | Praxair Inc. | E | June 13, 2016 | --- | $117.58 | --- | --- | 2.47% |
| ROST | Ross Stores Inc. | E | June 21, 2016 | --- | $65.89 | --- | --- | 0.71% |
| SHW | Sherwin-Williams Co. | S | July 12, 2016 | --- | $282.96 | --- | --- | 1.01% |
| SKT | Tanger Factory Outlet Centers Inc. | S | Jan. 16 | --- | $34.70 | --- | --- | 3.52% |
| SWK | Stanley Black & Decker Inc. | S | Jan. 28, 2016 | --- | $122.93 | --- | --- | 1.77% |
| SYY | SYSCO Corp. | S | Sept. 8, 2015 | --- | $53.44 | --- | --- | 2.28% |
| TGT | Target Corp. | S | Aug. 22, 2016 | --- | $63.97 | --- | --- | 3.50% |
| TROW | T. Rowe Price Group Inc. | D | Aug. 25, 2016 | --- | $73.84 | --- | --- | 2.87% |
| UTX | United Technologies Corp. | D | May 18, 2016 | --- | $111.10 | --- | --- | 2.30% |
| VFC | VF Corp. | E | Aug. 1, 2016 | --- | $52.80 | --- | --- | 2.71% |
| WBA | Walgreens Boots Alliance Inc. | S | July 6, 2016 | --- | $81.25 | --- | --- | 1.75% |
| WMT | Walmart Stores Inc. | S | May 20, 2016 | --- | $67.26 | --- | --- | 2.91% |
| XOM | Exxon Mobil Corp. | S | Aug. 18, 2016 | --- | $85.23 | --- | --- | 3.45% |
Disclosure: The author held a long position in Dover 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. See my current holdings here. This article is not investment advice and all readers are encouraged to speak to a registered investment adviser prior to making any investing decisions. Please also read our full disclaimer. This article first appeared on ModernGraham.
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