Growing investment concept

Ghing

Companies that grow dividends over time have been shown to beat the broader market. Dividend increases are an important signal from management that the company is doing well and the company can and will reward shareholders. I follow the next ones dividend increases from companies that have raised dividends in the past. The lists below contain several data points for stocks that will raise their dividends next week. This is especially important during these inflationary times.

This list is an abridged version, covering dividend increases only. A complete calendar of upcoming dividends is always available here.

How I created the lists

I created the information below by combining the “US Dividend Champions” spreadsheet hosted here with upcoming dividend information from the NASDAQ. This combines metrics on companies with a history of dividend growth with upcoming dividend payments. These companies all have a history of dividend growth of at least five years.

Corporations are required to have higher total dividends paid each year. Therefore, a company may not increase its dividend every calendar year, but the total annual dividend can still increase.

What is the ex-dividend date?

The “ex-dividend” date is when you are no longer entitled to the dividend or distribution. You must have made the purchase within the previous working day. For example, if the date is a Tuesday, you must have purchased (or already owned) shares by the close of business on Monday. Keep in mind that for any stock that goes ex-dividend on Monday (or Tuesday if Monday is a holiday), you must own it by the previous Friday.

Dividend series categories

Here are the stripe category definitions, as I will be using them throughout this piece.

  • Re: 50+ years
  • Champion/Aristocrat: 25+ years
  • Competitor: Ages 10-24
  • Challenger: 5+ years

Category To count
King 0
Sample 1
Contender 2
Challenger 3

The main list

The data was sorted by ex-dividend day (ascending) and then by series (descending):

First name Tickers Creeping Term yield Date ex-Div Percentage increase Strip category
Built-in microchip technology (MCHP) 18 1.78 21-Nov-22 8.97% Contender
Huntington Ingalls Industries, Inc. (HII) 9 2.22 23-Nov-22 5.08% Challenger
CDW company (CDW) 8 1.29 23-Nov-22 18.00% Challenger
National Bank holding company (NBHC) 6 2.06 23-Nov-22 8.70% Challenger
Atmos Energy Corporation (ATO) 37 2.64 25-Nov-22 8.82% Sample
Assurant, Inc. (ISA) 17 2.23 25-Nov-22 2.94% Contender

Field definitions

Creeping: Years of history of dividend growth comes from the US Dividend Champions spreadsheet.

Term yield: The new payout rate is divided by the current share price.

Coupon detachment date: This is the date you need to own the stock.

Percentage increase: The percentage increase.

Strip category: This is the overall classification of the company’s dividend history.

Show me the money

Here is a table that maps the new rates to the old rates. The percentage increase is also reiterated. This table is sorted in the same way as the first table (ex-dividend day ascending, dividend series descending).

Tickers Old Badger New rate Percentage increase
MHP extension 0.301 0.328 8.97%
HII 1.18 1.24 5.08%
CDW extension 0.5 0.59 18.00%
NBHC 0.23 0.25 8.70%
ato 0.68 0.74 8.82%
AIZ 0.68 0.7 2.94%

Additional metrics

Some different metrics related to these companies include annual price action and P/E ratio. The table is sorted in the same way as the previous table. A value investor can find stock ideas with those companies near 52-week lows, as they could provide more margin of safety and inflated yield.

Tickers Current price 52 weeks minimum 52 weeks maximum PE ratio % off Low % off High
MHP extension 73.65 54.1 88.93 61.78 36% off low 17% off High
HII 223.9 172.54 260.02 11.65 30% off low 14% off High
CDW extension 182.85 147.91 206.88 26.21 24% off low 12% off High
NBHC 48.6 35.63 50 13.17 36% off Low 3% off high
ato 112.33 87.34 121.5 19.88 29% off Low 8% off high
AIZ 125.74 119.01 192.59 21.08 6% off Low 35% off high

Ticker for yield and growth rates

Some investors are more interested in current yield, so I’ve sorted this table in descending order by yield. The table also includes some historical dividend growth rates as a bonus. In addition, the “Chowder Rule”, current yield + 5-year dividend growth rate, was included.

Tickers Product 1 year DG 3 years DG 5 years DG 10 years DG Soup rule
ato 2.64 8.9 8.8 8.2 6.1 10.9
AIZ 2.23 4.8 5.7 7.7 14.7 10
HII 2.22 12.7 17.3 18.6 20.8
NBHC 2.06 5.1 26.5 32.9 35
MHP extension 1.78 5 2 1.4 1.1 3.1
CDW extension 1.29 10.1 26 32.3 33.6

Historical returns

I’m always on the lookout for dividend-growth stocks with a history of beating a market benchmark. I use the Schwab US Dividend Equity ETF (SCHD) as a benchmark. There’s a lot of analysis on it, I’ve written a few articles myself, but the short version encapsulates a lot of the principles investors follow for dividend growth. It doesn’t hurt that the performance has been spectacular, with a solid yield and growing dividends.

Here is the graph of the 10-year total return for SCHD against all listed companies. CDW stands out as this week’s big winner, but I’d recommend further research before considering any location.

total return graph

total return graph (ychart)

Please do your due diligence before investing and thanks for reading.

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