As part of my monitoring process, I review the list of dividend increases every single week. This exercise helps me to monitor the organic dividend growth for my portfolio, and ensure that I am on track to meet my long term objectives of ensuring that my dividend income increases purchasing power over time.
This exercise also helps me to identify hidden dividend gems for further research. It is helpful to review the list of dividend increases, go through press releases, check my files and make updates from there. I try to narrow the list down to focus on companies that have managed to increase distributions for at least ten years in a row. I then further narrow the list down as I go through each company's fundamentals, valuation and determine which companies show promise for further research.
That's how I came up with a list of these three companies for further research. While the first two are a little pricey today, I like their fundamentals. I would not hesitate to add at the right price.
The third company seems fairly valued today, though that doesn't mean it won't be cheaper a few months from now.
The companies for further research include:
Kimberly-Clark Corporation (KMB), together with its subsidiaries, manufactures and markets personal care, consumer tissue, and professional products worldwide. It operates through three segments: Personal Care, Consumer Tissue, and K-C Professional.
The company’s board of directors approved a 3.90% increase it the quarterly dividend to $1.07/share. This marked the 48th consecutive annual dividend increase for this dividend champion. The rate of dividend growth has been slowing down, compared to the ten year annualized growth of 6.20%.
Between 2008 and 2019, earnings per share went from $4.04 to $6.24
Kimberly-Clark is expected to earn between $5.95/share to $6.65/share in 2020.
The stock is not cheap at 23 times earnings. Kimberly-Clark offers a dependable yield of 3% today. It may not be a bad company to look at on dips to $120 - $132/share and even lower. Check my analysis of Kimberly-Clark for more information about the company,
Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, equipment, and services worldwide.
The company raised its quarterly dividend by 15.50% to $1.34/share. This was the 38th consecutive annual dividend increase for this dividend champion.
Over the past decade, Air Products & Chemicals has managed to grow distributions at an annualized rate of 9.60%.
Between 2008 and 2019, Air Products & Chemicals has managed to grow earnings from $4.15/share to $7.94/share. The company expects to earn between $9.35 to $9.60/share in 2020.
The stock is overvalued at 26.10 times forward earnings and yields 2.20%. The stock may be a better value on dips below $190/share.
Comcast Corporation (CMCSA) operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, Theme Parks, and Sky segments.
The company raised its quarterly dividend by 9.50% to 23 cents/share. This marked the 12th consecutive annual dividend increase for this dividend achiever. Comcast has managed to grow distributions at an annualized rate of 22.70%/year over the past decade.
Between 2008 and 2019, Comcast managed to grow earnings from 43 cents/share to $3.13/share. Analysts are expecting earnings per share to hit $3.28 in 2020.
The stock is attractively valued at 13.60 times forward earnings and yields 2.06%.
Relevant Articles:
- Seven Notable Dividend Increases From Last Week
- Kimberly-Clark (KMB) Dividend Stock Analysis
- What is intrinsic value?
- Seven Companies Working Hard For Their Stockholders
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