Can The Top 10 S&P 500 Dividend Growers Continue Their Rapid Dividend Growth?

Iron Mountain Inc (NYSE:IRM)

Iron Mountain Inc (NYSE:IRM) is a global leader in enterprise storage with a high-return, real estate-based business model, yielding over $3 billion of revenues annually. The company provides storage and information management services to a high-quality, diversified customer base across numerous industries and government organizations. Iron Mountain serves more than 170,000 customers, including approximately 94% of the Fortune 1000, and no single customer accounts for more than 1% of revenues.

Iron Mountain Inc (NYSE:IRM) provides storage and information management services in 41 countries on six continents, storing 530 million cubic feet of records in a portfolio of approximately 1,100 facilities containing 70 million square feet of space. The company was founded in 1951 and is headquartered in Boston, Massachusetts.

Image Source: Iron Mountain

On April 28, Iron Mountain reported its first quarter 2016 financial results, which beat EPS expectations by $0.04 (7.9%). In the report, the company said that year-over-year dividend growth of 2.0% per share expected in 2016. IRM showed earnings per share surprise in its three last quarters, as shown in the table below.

Data: Yahoo Finance

Iron Mountain has been paying uninterrupted dividends since 2010. The annual dividend yield is high at 5.31%, and the payout ratio is very high at 282%. The annual rate of dividend growth over the past three years was at 22.5%, and over the past five years was very high at 59.1%. Since the company said that it expects year-over-year dividend growth of 2.0%, it is quite clear that it would not keep its high five years dividend growth rate of 59%.

Viacom, Inc. (NASDAQ:VIAB)

Image Source: Viacom

On April 28, Viacom (VIAB) reported its second quarter fiscal 2016 financial results, which beat EPS expectations by $0.02 (2.7%). The company posted revenue of $3.0 billion in the period, just above $2.98 billion consensus. Viacom, Inc. (NASDAQ:VIAB) showed earnings per share surprise in most of its last quarters, as shown in the table below.

Data: Yahoo Finance

Viacom, Inc. (NASDAQ:VIAB) has been paying uninterrupted dividends since July 2010, and it increased its quarterly dividend per share in the fiscal fourth quarter of each fiscal year. The forward annual dividend yield is pretty high at 3.91%, and the payout ratio is only 27.3%. The annual rate of dividend growth over the past three years was at 10.7%, and over the past five years was very high at 56.1%. Although the payout ratio is low, in my opinion, the company will continue to raise its dividend by an average annual rate of about 10%, as it has done in the last three years and not by the very high rate of about 56%.

Source: 2nd Quarter ’16 Earnings Presentation