A dividend champion is a company which has a 25 year record of annual dividend increases. There are only 129 such companies in the US today. I believe that becoming a dividend champion is no accident, and it is a result of a strong business that has generated earnings growth for a long period of time. These are the types of businesses I like to study, and potentially consider at the right time for my dividend portfolio.
I have updated the list of dividend champions through December 31, 2018. I decided to update the list of dividend champions after the untimely passing of David Fish in May 2018.
Since I use the list of dividend champions in my investing research, I realized that my process is at risk, since it is dependent on a single person. This led me to develop ways to update the list on a monthly basis. The list is a result of a few things I do:
1) Obtain forward dividend information from Yahoo Finance, and compare it to existing information from the prior month's list
2) Research differences, and verify if this is indeed a dividend increase. I like to verify new raises and dividend track records against press releases, which is a manual process. Very often, my research tells me that there is no increase, but my data feed or my calculations are incorrect.
3) Update the list using the inputs from 1) and 2) above, and add prices and trailing earnings per share.
4) The other step is more of a gut check. I like to keep plugged in the world of dividend growth investing. Between monitoring weekly dividend increases, monitoring my dividend portfolio holdings and following investors and companies, I develop a mental checklist of companies that have increased/decreased dividends. This is helpful when updating the list of dividend champions. I have also been around for a little bit, which is how I decided to promote certain companies like Abbott (ABT) to the rank of a dividend champion, but remove Realty Income (O) from the list.
5) I didn't find a reliable source to update the trailing dividend payments for 2018 in a systematic way. As I didn't feel like updating the annual dividend amounts for 2018 for over 100 companies, I skipped this step.
The 2019 dividend champions list can be downloaded from this location in an excel spreadsheet format. Subscribers to my free newsletter are receiving this as an attachment in their inboxes.
Additions to the list
I added two companies to the list of dividend champions, which raised their dividends for the 25th year in at row:
PSB Holdings Inc. (PSBQ)
Urstadt Biddle Properties (UBA)
I updated Praxair (PX), which merged with German company Linde a few months ago to the new company/symbol Linde (LIN). Based on the latest dividend announcement, it looks like the new company is continuing the dividend history of Praxair.
As a result, there are 129 dividend champions in the US.
There were several dividend increases over the past month from the dividend champion companies. These include:
Name
|
Symbol
|
Yrs Annual Increases
|
Old Rate
|
New Rate
|
Increase
|
Yield
|
ABM Industries Inc.
|
ABM
|
52
|
$ 0.1750
|
$ 0.1800
|
2.86%
|
2.24
|
Abbott Laboratories
|
ABT
|
47
|
$ 0.2800
|
$ 0.3200
|
14.29%
|
1.77
|
AT&T Inc.
|
T
|
35
|
$ 0.5000
|
$ 0.5100
|
2.00%
|
7.15
|
Ecolab Inc.
|
ECL
|
27
|
$ 0.4100
|
$ 0.4600
|
12.20%
|
1.25
|
Erie Indemnity Company
|
ERIE
|
28
|
$ 0.7825
|
$ 0.8400
|
7.35%
|
2.52
|
Franklin Resources
|
BEN
|
38
|
$ 0.2000
|
$ 0.2300
|
15.00%
|
3.10
|
Nucor Corp.
|
NUE
|
46
|
$ 0.3800
|
$ 0.4000
|
5.26%
|
3.09
|
Pentair Ltd.
|
PNR
|
43
|
$ 0.1750
|
$ 0.1800
|
2.86%
|
1.91
|
SEI Investments Company
|
SEIC
|
28
|
$ 0.3000
|
$ 0.3300
|
10.00%
|
1.43
|
Stryker Corp.
|
SYK
|
26
|
$ 0.4700
|
$ 0.5200
|
10.64%
|
1.33
|
Universal Health Realty Trust
|
UHT
|
33
|
$ 0.6700
|
$ 0.6750
|
0.75%
|
4.40
|
I have decided to discontinue updating the list of dividend champions for several reasons.
First of all, there is someone else who has taken on the task of updating the list of dividend champions, contenders and challengers. I have a great respect for this, given the fact that I know how time consuming this process can be. I am hopeful that they can continue updating the list for years to come. If they don't, I am sure that someone else can pick up the torch. Either way, I have a backup process in place to update the list of dividend champions. But for the time being, it is no use to duplicate effort.
Second, I do not as much interest from my readers about those monthly updates of the dividend champions list. Readers tend to enjoy other articles I write, because of my personal spin on the situation. Given the fact that updating the list of dividend champions takes a lot of time, right around the time I am busy with updates for my dividend growth investor newsletter, I am choosing to prioritize my premium offering.
This was a great exercise in updating the dividend champions list however. It is a great exercise in independent thinking. For example, I disagree with some of the additions in the current list of dividend champions. Notably, the following companies have not increased dividends for 25 years in a row (e.g. Realty Income went public in 1994, so they would be eligible to become a dividend champion by the end of 2019):
Ticker
|
Name
|
Years Annual Increases
|
ARTNA
|
Artesian Resources
|
22
|
CAT
|
Caterpillar
|
24
|
O
|
Realty Income
|
24
|
In addition, the other list does not include Abbott Labs (ABT), which has increased dividends for 47 years in at row. The company split into two in 2013, when it spun-off Abbvie. Therefore, I believe that the company with the legacy name should inherit the historical record of annual dividend increases. If you disagree with this thinking, you should also remove Altria (MO) from the list of dividend champions. The latter spun-off Kraft in 2007 and Phillip Morris International (PM) in 2008, but is on the list of dividend champions. I believe that you need to have a consistency in methodology, when maintaining a list of companies.
Of course, the other list from Justin Law updates roughly 800 companies, which is why we should not be too picky. This is a massive undertaking to take on a monthly basis, as it is a gargantuan amount of work.
Thank you for reading along! The rest of the articles will continue next week!
Relevant Articles:
- Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
- October 2018 Dividend Champions List
- December 2018 Dividend Champions List
- RIP David Fish
