Every week, I go through the list of dividend increases as part of my monitoring process. I usually focus on those companies that have raised dividends for at least a decade. I then focus on things like growth in earnings per share, in order to gauge the possibility of further dividend growth in the future.
I also focus on valuation – even the best company in the world is not worth overpaying for. The discussion behind each company outlines my basic review process for proceeding with promising ideas or discarding them. I post it for educational purposes to my readers.
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The companies that increased their dividends include:
Genuine Parts Company (NYSE:GPC) distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Canada, Mexico, Australia, New Zealand, Puerto Rico, the Dominican Republic, and the Caribbean region. The company raised its quarterly dividend by 2.70% to 67.50 cents/share. This marked the 61st consecutive annual dividend increase for this dividend king. Over the past decade, Genuine Parts Company (NYSE:GPC) has managed to increase annual dividends at a rate of 6.90%/year. The company managed to grow earnings from $2.98/share in 2007 to $4.59/share in 2016. The company is expected to earn $4.77 share in 2017. The stock is overvalued at 21 times forward earnings and yields 2.80%. It would be worth a second look on dips below $92/share. Check my analysis of Genuine Parts Company (NYSE:GPC) for more information.
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Wal-Mart Stores Inc (NYSE:WMT) operates retail stores in various formats worldwide. It operates through three segments: Walmart U.S., Walmart International, and Sam’s Club. The company raised its quarterly dividend by 2% to 51 cents/share. This marked the 44th consecutive annual dividend increase for this dividend champion (1). Over the past decade, Wal-Mart Stores Inc (NYSE:WMT) has managed to increase annual dividends at a rate of 11.80%/year. The company managed to grow earnings from $3.16/share in 2007 to $4.38/share in 2017. The company is expected to earn $4.33/share in 2018 and $4.54/share in 2019. The stock is attractively priced at 16.70 times forward earnings and yields 2.90%. Given the lack of earnings growth over the past four – five years, and the slowdown in dividend growth, I view Wal-Mart Stores as a hold at best. Check my analysis of Wal-Mart Stores Inc (NYSE:WMT) for more information.
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NextEra Energy Inc (NYSE:NEE), through its subsidiaries, generates, transmits, and distributes electric energy in the United States and Canada. NextEra Energy Inc (NYSE:NEE) raised its quarterly dividend by 12.90% to 98.25 cents/share. This marked the 23rd consecutive annual dividend increase for this dividend achiever (2). Over the past decade, the company has managed to increase annual dividends at a rate of 8.80%/year. The company managed to grow earnings from $3.27/share in 2007 to $6.25/share in 2016. NextEra Energy Inc (NYSE:NEE) is expected to earn $6.63/share in 2017. The stock is fairly valued at 19.80 times forward earnings and yields 3.10%.
