Follow the dividend investment decisions of a person who has no background in financial investment and wishes to take control of their financial future to retire from their full-time job at 60.

Update on Goals - 28 Jun 2014 14:53

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Mr. Market has continued to amaze me with its gains. While no significant impact on my Dividend Growth goals, it has helped smash through my 401K & IRA goals and it is only June. The decision I need to make now is to adjust my short term one year goal or lock in some of the gains and increase my cash position. This is not an easy decision so I will take my time and see how the 3rd quarter plays out.

For Dividend Growth goals I hit 87% complete on new contributions and 82% on increasing next years dividend payouts. This is not entirely a shock as most of my free cash comes in the first half of the year, the second half of the year I usually have zero free cash and it looks like I'm on pace of meeting my goal for the year by the end of summer.

On my radar for new purchases I'm really attracted to McDonald's (MCD), Genuine Parts Company (GPC), Proctor & Gamble (PG), an General Mills (GIS). Not sure which of these will be my final purchase for newly invested money but definitely two will be there at quarters end.

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- Comments: 0

Recent Buys - ESV, BHB & MHLD - 30 Apr 2014 00:06

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Finding opportunities for new acquisitions that meet my growth requirements is getting tougher but with a little elbow grease there are still opportunities.
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My first purchase was to increase my position in the oil platform company Ensco (ESV). This was only a small purchase ($500) but could not resist the share price of $48.72 per share and a yield of 6.16%. Not sure why but Mr. Market has punished this stock the last 6 months so I'm capitalizing on the opportunity. This purchase adds $30 annually to my portfolio.
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Second purchase was Bar Harbor Bank (BHB) at $37.42 a share and yield of 3.5%. Bar Harbor is a local Maine bank with 15 branches, a well managed balance sheet and has been around since 1887. They have a dividend growth history of 10 years with a 5% average rate. Adding a twist to this purchase is a recently announced 3 for 2 stock split scheduled in May and an 3% dividend increase slated for a June payout. Another feature that makes this an attractive purchase is that they review dividend payouts quarterly and have had 12 straight quarters of dividend growth. The one down side is the size of the company with a market cap of only $157M. With a small cap it is hard to get the attention of wall street investors so equity growth will be limited but on the positive side it translates into a low beta. This purchase adds $56.70 annually to my portfolio.
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Third purchase was Maiden Holdings Ltd (MHLD) at $12.06 per share and yield of 3.65%. MHLD is an insurance company based in Bermuda that provides reinsurance solutions to regional and specialty insurers primarily in the United States and Europe. It operates in three segments: Diversified Reinsurance, AmTrust Quota Share Reinsurance, and ACAC Quota Share. They have a 6 year dividend growth history and a 3 year 11% average dividend growth rate. This purchase adds $54 annually to my portfolio.
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BHB and MHLD were both on my watch list so I can scratch them off the list. Tough part is I have nothing to replace them with and the candidates on my watch list is getting smaller each quarter. - Comments: 0

My Goals After One Quarter - 06 Apr 2014 12:24

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Mr. Market has continued to be nice with annual dividend increases during the month of March from Air Products (APD) & Waste Management (WM). All dividend increases for the quarter contributed nicely to my forward dividend growth goal allowing me exceed the planned 25% versus 33% for the quarter.

Last month I spoke how my wife found a very flexible part-time job. It is only a couple hours a day and at minimum wage. It was thanks to this new job that we were able to save $300 for the month as unplanned bills (repairs to cars & house) came rolling in and derailed my savings plan.

Unfortunately $300 was not enough to buy any of my targeted investments so I'm ending the quarter slightly below where I should be for "Contributing to New DGI Purchases" at 21% complete versus a target of 25%. Luckily I finished my taxes and have a decent return coming in June which should be put back on track.

One of the areas that has taken away from ability to save for new purchases is my goal to have a cash balance of 10% in my 401K to reduce risk. I decided to accelerate this to get it out of the way and doubled my 401K contribution. The aggressive approach is paying off as I'm at 80% of my goal versus a planned 25%. My hope is to have this completed by June so I can focus on the 3rd & 4th quarter for acquiring new equities to increase my forward dividend.

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- Comments: 0

Quarterly Portfolio Update - 30 Mar 2014 22:52

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Quarterly Dividend Growth
% from Div Growth .84%
% from New Investments 0.00%
% from Reinvested Div 1.3%
% from Special Dividends 3.97%
% Overall Growth 6.12%
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Last quarter's late re-investment in PPL finally started kicking in this quarter contributing a 3.97% increase to income. As far as new purchases I did pick up some shares in the Healthcare REIT HCP Inc. which represents my first REIT component in my portfolio but will not start contributing until the next quarter.

For the quarter, there were two stocks that contributed to passive growth; GlaxoSmithKline (GSK) and Waste Management (WM). A third stock TCAP contributed with a special one-time dividend payable over two quarters, while nice to receive it will mess with my growth metrics in the third quarter of this year when the special dividend is gone and I may have to show a negative decrease in quarterly growth.

WM was disappointing with its increase as they only increased their annual payout by 2.7%. This is below the growth I need to meet my investing goals so I will continue to monitor for risk of growth falling further.

GSK had a decent year and it its showing as they increased annual dividend just slightly more than 5%.

TCAP was a real disappointment. I had been expecting a dividend increase announcement in February but instead they issued a special one-time dividend to be paid over two installments. While TCAP has performed wonderfully for me over the years the last year and six months have seen little growth putting TCAP on my watch list as a potential sell, I’m giving the company 6 more months before I make a final decision.

Speaking of dividend growth announcements I received increase announcements from APD, DPS, GIS, & PPL. Definitely looking forward to these increases in the next quarter.

As far as additional contributions I only managed to save $300 this quarter. Saving was tough even though my wife picked up a part-time job. We were continually hit with little unplanned expenses. New brakes for wife's mini-van, microwave died, snow-blower died, and it goes on and on. I would like to think unplanned expenses have ended but I fear this harsh winter may have caused more damage to the house & property of which we should discover as spring arrives and I have a chance to inspect. - Comments: 0

Build Diversity: Part 8 Conclusion - 30 Mar 2014 01:15

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The Build Diversity series was started to question a common misnomer that the selection of dividend growth companies is very limiting and the largest risk is lack of diversification.

After multiple screens we have identified 52 potential stocks spread over 11 sectors with market caps ranging from $17B to below $100M. We've seen results from momentum growth sectors (such as technology and healthcare), traditional dividend growth sectors (such as consumer staples), and defensive sectors (such as utilities & small local regional banks).

The search results were astounding and proved that dividend growth investing is not limited and has access to a large diversity of stocks in many shapes and sizes. Additionally, if we lowered the screen requirements on dividend yield to as low as 2% the universe of stocks available almost triples.

Whether or not dividend growth investing is the best strategy is arguable but to state you cannot adequately diversify is completely false. - Comments: 0

Build Diversity: Part 7 Materials & Utilities - 30 Mar 2014 00:47

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All stock information will be culled from David Fish’s “Dividend Champions List” at http://dripinvesting.org/ which provides a list of all stocks that have continually grown their annual dividend payouts for 5 years or more in a row.

Welcome to Part 7 of our “Build Diversity” series. Today we will be looking at the Materials and Utility sectors.

To start with a list we will use basic search criteria of:
* min div yield near 3% or greater
* payout ratio near 65% or less
* debt to equity ratio less than 1

Company Symbol Yrs of Div Growth Div Yield Payout Ratio TTM P/E Debt/Equity
Material
BHP Billiton Ltd. BHP 11 3.43% 42.3% 12.35 0.50
BHP Billiton plc BBL 11 3.68% 42.3% 11.50 0.50
Compass Minerals International CMP 9 2.81% 61.7% 21.94 0.86
Sonoco Products Co. SON 31 2.95% 61.7% 20.89 0.70
Utilities
Conn. Water Service CTWS 44 3.01% 59.6% 19.78 0.92
MGE Energy Inc. MGEE 38 2.82% 52.8% 18.73 0.66
Northeast Utilities NU 16 3.53% 63.1% 17.85 0.99

The search yielded 7 stocks. For Material companies SON is the elder of the group with 31 years of continuous dividend growth. BHP & BBL offer the highest dividend yield and lowest P/E ratios but they also operate in volatile iron ore markets where spot prices have dramatic swings up and down.

For Utility companies CTWS & MGEE offer a long history of continuous dividend growth. What is most impressive of all three is that we actually found utility companies with low debt to equity ratios. One of the downsides of establishing a utility is the large infrastructure required for creating and/or delivering of utility services. Creating such a structure requires an immense amount of cash so most have a debt/equity ratio above 1.

Company Symbol 1 Yr DGR 3 Yr DGR 5 Yr DGR 10 Yr DGR
Materials
BHP Billiton Ltd. BHP 3.6% 10.1% 10.6% 22.3%
BHP Billiton plc BBL 3.6% 10.1% 10.6% 30.7%
Compass Minerals International CMP 10.1% 11.8% 10.2%
Sonoco Products Co. SON 3.4% 3.5% 2.8% 3.9%
Utilities
Conn. Water Service CTWS 2.1% 1.9% 2.2% 1.7%
MGE Energy Inc. MGEE 3.2% 2.6% 2.3% 1.8%
Northeast Utilities NU 11.1% 12.8% 12.2% 9.8%

Looking at dividend growth SON shows some pretty low growth but the trade-off is its long dividend growth history. On the utilities front it is not surprising to see low growth rates as these are low growth heavily regulated industries and typically make good defensive plays for your portfolio. It was interesting to find NU with a high growth rate and one would have to question how sustainable it is.

Our quick search has yielded 7 potentially attractive examples to add to your portfolio. Like any investment you should research further before purchasing any equity as this report is nothing more than a result of some surface level values and ratios.

BHP Billiton Ltd. (BHP): BHP Billiton Limited, together with its subsidiaries, operates as a diversified natural resources company worldwide. The company explores for, develops, produces, and markets petroleum, potash, aluminium, alumina, nickel, and manganese ore and alloys; and produces and exports seaborne metallurgical coal and thermal coal. In addition, the company explores for and produces copper, silver, lead, uranium, zinc, and iron ore.

BHP Billiton plc (BBL): BHP Billiton Plc, together with its subsidiaries, operates as a diversified natural resources company worldwide. The company is engaged in the exploration, development, and production of oil and gas; mining of metallurgical coal, thermal coal, copper, silver, lead, zinc, molybdenum, uranium, iron ore, and gold; mining and refining of bauxite into alumina, and smelting of alumina into aluminum metal; and mining and production of nickel products, manganese metal and alloys, as well as development of potash.

Compass Minerals International (CMP): Compass Minerals International, Inc., through its subsidiaries, produces and markets inorganic mineral products primarily in North America and the United Kingdom. It operates in two segments: Salt and Specialty Fertilizer.

Sonoco Products Co. (SON): Sonoco Products Company manufactures and sells industrial and consumer packaging products in the United States, Europe, and Canada. The company operates in four segments: Consumer Packaging, Paper and Industrial Converted Products, Display and Packaging, and Protective Solutions.

Conn. Water Service (CTWS): Connecticut Water Service, Inc., through its subsidiaries, operates as a regulated water company. The company operates in three segments: Water Activities, Real Estate Transactions, and Services and Rentals.

MGE Energy Inc. (MGEE): MGE Energy, Inc., through its subsidiaries, operates as a public utility holding company in Wisconsin. The company operates in 4 segments; Regulated Electric Utility, Regulated Gas Utility, Non-regulated Energy Operations, and Transmission Investments.

Northeast Utilities (NU): Northeast Utilities, a public utility company, through its subsidiaries, is engaged in the energy delivery business. The company is involved in generation, transmission, and distribution of electricity; and distribution of natural gas. - Comments: 0

Build Diversity: Part 6 Tech & Telcoms - 28 Mar 2014 00:32

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All stock information will be culled from David Fish’s “Dividend Champions List” at http://dripinvesting.org/ which provides a list of all stocks that have continually grown their annual dividend payouts for 5 years or more in a row.

Welcome to Part 6 of our “Build Diversity” series. Today we will be looking at the Technology and Telcom sectors.

To start with a list we will use basic search criteria of:

  • min div yield near 3% or greater
  • payout ratio near 65% or less
  • debt to equity ratio less than 1
Company Symbol Yrs of Div Growth Div Yield Payout Ratio TTM P/E Debt/Equity
Technology
Analog Devices Inc. ADI 12 2.91% 67.27% 23.10 0.18
Intel Corp. INTC 10 3.63% 47.87% 13.17 0.23
Microsoft Corp. MSFT 11 2.92% 41.33% 14.14 0.27
Telecom
AT&T Inc. T 30 5.76% 54.12% 9.40 0.82
China Mobile Limited CHL 8 4.71% 42.63% 9.06 0.00

The search yielded 5 stocks. For Technology companies payout ratios of MSFT & INTC are below 50% and the largest dividend payout is INTC.

For Telcom, both results offer high dividend yields and low P/E ratios. Of the two, only T has a dividend ratio above 50% but even at this level there is still room to grow the dividend but T also has the longest consecutive annual dividend growth at 30 years.

Looking at average dividend growth rates we see higher rates of growth for lower yielding technologies and low growth rates for the more mature high yielding telecommunication stocks.

Company Symbol 1 Yr DGR 3 Yr DGR 5 Yr DGR 10 Yr DGR
Technology
Analog Devices Inc. ADI 13.3% 16.5% 11.8% 42.3%
Intel Corp. INTC 3.4% 12.6% 10.5% 27.4%
Microsoft Corp. MSFT 16.9% 20.8% 16.1% 15.0%
Telcom
AT&T Inc. T 2.3% 2.3% 2.4% 4.9%
China Mobile Limited CHL 2.8% 6.6% 6.8% 21.9%

One stock to note is INTC which lists a 1 year dividend growth rate of 3.4%. INTC has not increased their divided since 2012 and if they do not increase their dividend in the next two quarters they will lose their status of consecutive years of dividend growth.

Our quick search has yielded 5 potentially attractive examples to add to your portfolio. Like any investment you should research further before purchasing any equity as this report is nothing more than a result of some surface level values and ratios.

Analog Devices Inc. (ADI): Analog Devices, Inc. is engaged in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits (ICs) for use in industrial, automotive, consumer, and communication markets worldwide. It offers signal processing products that convert, condition, and process real-world phenomena, such as temperature, pressure, sound, light, speed, and motion into electrical signals.

Intel Corp. (INTC): Intel Corporation designs, manufactures, and sells integrated digital technology platforms worldwide. It operates through PC Client Group, Data Center Group, Other Intel Architecture, Software and Services, and All Other segments.

Microsoft Corp. (MSFT): Microsoft Corporation develops, licenses, and supports software, services, and hardware devices.

AT&T Corp. (T): AT&T Inc. provides telecommunications services to consumers and businesses in the United States and internationally.

China Mobile Limited (CHL): China Mobile Limited, an investment holding company, provides mobile telecommunications and related services primarily in Mainland China and Hong Kong. - Comments: 0

Build Diversity: Part 5 Consumer Stocks - 22 Mar 2014 14:06

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All stock information will be culled from David Fish’s “Dividend Champions List” at http://dripinvesting.org/ which provides a list of all stocks that have continually grown their annual dividend payouts for 5 years or more in a row.

Welcome to Part 5 of our “Build Diversity” series. Today we will be looking at the Consumer sector (both staples and discretionary).

To start with a list we will use basic search criteria of:

  • min div yield 3% or greater
  • payout ratio less than 65%
  • debt to equity ratio less than 1
Company Symbol Yrs of Div Growth Div Yield Payout Ratio TTM P/E Debt/Equity
Discretionary
Cracker Barrel Old Country CBRL 11 3.02% 59.29% 19.65 0.84
Frisch's Restaurants Inc. FRS 7 3.02% 44.17% 14.61 0.14
Mattel Inc. MAT 6 4.07% 58.46% 14.35 0.49
McDonald's Corp. MCD 38 3.41% 58.38% 17.14 0.89
Rent-A-Center Inc. RCII 5 3.66% 38.82% 10.61 0.62
Sturm Ruger & Company RGR 5 3.32% 40.30% 12.14 0.00
Staples
Procter & Gamble Co. PG 57 3.06% 65.03% 21.26 0.52
Universal Corp. UVV 43 3.54% 39.08% 11.04 0.38

The search yielded 8 stocks. For companies that have increased dividends for more than 20 consecutive years we have MCD, PG, & UVV. For payout ratios FRS, RCII, RGR, & UVV are below 50%. The largest dividend payouts are MAT, RCII, and UVV but while MAT & RCII have the highest yields they also have some of the shortest history of consecutive dividend growth.

Looking at average dividend growth rates we see not all are created equal. MCD comes in the strongest with a 10 year average of 22.8% and UVV the lowest with a 10 year average of 3.34%.

Company Symbol 1 Yr DGR 3 Yr DGR 5 Yr DGR 10 Yr DGR
Discretionary
Cracker Barrel Old Country CBRL 78.6% 45.0% 27.6% 36.66%
Frisch's Restaurants Inc. FRS 3.1% 6.9% 6.6% 5.68%
Mattel Inc. MAT 5.5% 18.8% 15.6%
McDonald's Corp. MCD 8.7% 11.3% 13.9% 22.80%
Rent-A-Center Inc. RCII 31.3% 91.3%
Sturm Ruger & Company RGR 64.0% 85.8%
Staples
Procter & Gamble Co. PG 7.0% 7.9% 8.8% 10.59%
Universal Corp. UVV 2.0% 2.1% 2.1% 3.34%

Unfortunately, UVV has a growth rate for all averages that is barely above the 10 year average inflation rate of 2.39%. UVV with a dismal growth rate now reduces our list from 8 to 7 perspective stocks.

Our quick search has yielded 7 potentially attractive examples to add to your portfolio. Like any investment you should research further before purchasing any equity as this report is nothing more than a result of some surface level values and ratios.

Cracker Barrel Old Country (CBRL): Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept in the United States. It operates full-service restaurants, which provide breakfast, lunch, and dinner. The company also operates gift shops that offer various decorative and functional items.

Frisch's Restaurants (FRS): Frisch’s Restaurants, Inc., together with its subsidiaries, operates restaurants in the United States. The company operates its full service family-style restaurants under the Frisch’s Big Boy name in various regions of Ohio, Kentucky, and Indiana.

Mattel (MAT): Mattel, Inc. designs, manufactures, and markets a range of toy products worldwide. The company operates in three segments: North America, International, and American Girl. It also publishes Advice and Activity books and the American Girl magazine.

McDonald’s (MCD): McDonald’s Corporation franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. The company’s restaurants offer various food items, soft drinks, coffee, and other beverages, as well as breakfast menus.

Rent-A-Center (RCII): Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a rent-to-own basis. The company operates in four segments: Core U.S., Acceptance Now, International, and Franchising. It offers durable products, such as consumer electronics, appliances, computers, furniture, and accessories under rental purchase agreements.

Sturm Ruger & Company (RGR): Sturm, Ruger & Company, Inc. designs, manufactures, and sells firearms in the United States. The company provides single-shot, auto loading, bolt-action, and sporting rifles; single-action and double-action revolvers; and rim fire and center fire auto loading pistols, as well as shotguns under the Ruger name. It also provides accessories and replacement parts for firearms.

Procter & Gamble (PG): The Procter & Gamble Company, together with its subsidiaries, manufactures and sells branded consumer packaged goods. The company operates through five segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. - Comments: 0

Build Diversity: Part 4 Energy - 16 Mar 2014 14:45

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All stock information will be culled from David Fish’s “Dividend Champions List” at http://dripinvesting.org/ which provides a list of all stocks that have continually grown their annual dividend payouts for 5 years or more in a row.

Welcome to Part 4 of our “Build Diversity” series. Today we will be looking at the Energy sector.

To start with a list we will use basic search criteria of:

  • min div yield 2.5% or greater
  • payout ratio less than 65%
  • debt to equity ratio less than 1
Company Symbol Yrs of Div Growth Div Yield Payout Ratio TTM P/E Debt/Equity
Chevron CVX 26 3.47% 36.10% 10.41 0.13
China Petroleum & Chemical SNP 5 4.48% 24.69% 5.52 0.59
ConocoPhillips COP 13 4.15% 42.86% 10.33 0.42
ExxonMobil XOM 31 2.61% 34.19% 13.08 0.13
Helmerich & Payne Inc. HP 42 2.53% 36.98% 14.61 0.04
Occidental Petroleum OXY 12 2.98% 50.09% 16.79 0.18

The search yielded 6 stocks. For companies that have increased dividends for more than 20 consecutive years we have HP, XOM, & CVX. For payout ratios, only OXY squeaks in just above 50% but even at these levels there is room to grow dividends further. The industry average for valuation is a P/E ratio of 14.63, only OXY is above and HP is about o average.

Looking at average dividend growth, all 6 show significant increases over the last 10 years with HP being the weakest with a 10 year average of 6.1%.

Company Symbol 1 Yr DGR 3 Yr DGR 5 Yr DGR 10 Yr DGR
Chevron CVX 11.11% 11.15% 9.04% 10.55%
China Petroleum & Chemical SNP 8.44% 22.64% 19.84% 14.50%
ConocoPhillips COP 15.50% 17.66% 13.25% 15.70%
ExxonMobil XOM 12.84% 12.24% 9.68% 9.64%
Helmerich & Payne Inc. HP 7.70% 11.90% 9.20% 6.10%
Occidental Petroleum OXY 18.27% 18.72% 15.25% 16.81%

Our quick search has yielded 6 potentially attractive examples to add to your portfolio. Like any investment you should research further before purchasing any equity as this report is nothing more than a result of some surface level values and ratios.

Chevron (CVX): Chevron Corporation, through its subsidiaries, is engaged in petroleum, chemicals, mining, power generation, and energy operations worldwide. The company operates in two segments, Upstream and Downstream.

China Petroleum & Chemical (SNP): China Petroleum & Chemical Corporation, an energy and chemical company, through its subsidiaries, engages in the oil and gas, and chemical operations in the People’s Republic of China.

ConocoPhillips (COP): ConocoPhillips explores for, develops, and produces crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids worldwide. Its portfolio includes North American shale and oil sands assets; legacy assets in North America, Europe, Asia, and Australia; various international developments; and exploration prospects.

ExxonMobil (XOM): Exxon Mobil Corporation explores and produces for crude oil and natural gas. As of December 31, 2013, the company had approximately 37,661 gross and 31,823 net operated wells. It also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene, polypropylene plastics, and specialty products; and transports and sells crude oil, natural gas, and petroleum products.

Helmerich & Payne Inc. (HP): Helmerich & Payne, Inc. primarily operates as a contract drilling company in North and South America. It provides drilling rigs, equipment, personnel, and camps on a contract basis to explore for and develop oil and gas from onshore areas and fixed platforms, tension-leg platforms, and spars in offshore areas.

Occidental Petroleum (OXY): Occidental Petroleum Corporation is engaged in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing and Other. - Comments: 0

Build Diversity: Part 3 Healthcare - 08 Mar 2014 22:24

Tags: build_diversity

All stock information will be culled from David Fish’s “Dividend Champions List” at http://dripinvesting.org/ which provides a list of all stocks that have continually grown their annual dividend payouts for 5 years or more in a row.

Welcome to Part 3 of our “Build Diversity” series. Today we will be looking at the Healthcare sector.

To start with a list we will use basic search criteria of:

  • min div yield near 2% or greater
  • payout ratio less than 65%
  • debt to equity ratio less than 1
Company Symbol Yrs of Div Growth Div Yield Payout Ratio TTM P/E Debt/Equity
Becton Dickinson BDX 42 2.02% 46.68% 23.15 0.79
Bristol-Myers Squibb BMY 5 2.88% 93.51% 32.45 0.49
Cardinal Health CAH 17 1.78% 104.31% 58.64 0.62
Covidien plc COV 7 1.88% 37.54% 20.01 0.54
Johnson & Johnson JNJ 51 2.98% 54.89% 18.39 0.22
Medtronic Inc. MDT 36 1.98% 29.95% 15.12 0.66
National Healthcare Corp. NHC 10 2.46% 34.32% 13.94 0.02
Owens & Minor Inc. OMI 16 2.77% 56.14% 20.26 0.21
Smith & Nephew plc SNN 8 1.84% 44.93% 24.41 0.09
Span-America Medical Systems SPAN 15 2.82% 33.14% 11.74 0.00
Steris Corp. STE 9 1.83% 32.81% 17.93 0.51
Teva Pharmaceutical Indus TEVA 14 2.86% 90.64% 31.65 0.55
Utah Medical Products UTMD 10 1.88% 36.90% 19.63 0.18

The search yielded 13 stocks. Yet, one thing that immediately jumps out is the number of high valuations as seen in high P/E ratios such as Cardinal Health with a P/E of 58. As a second filter we will add the criteria of a P/E ratio less than the industry average of 21.88 which now reduces the results to 8 companies.

Company Symbol Yrs of Div Growth Div Yield Payout Ratio TTM P/E Debt/Equity
Covidien plc COV 7 1.88% 37.54% 20.01 0.54
Johnson & Johnson JNJ 51 2.98% 54.89% 18.39 0.22
Medtronic Inc. MDT 36 1.98% 29.95% 15.12 0.66
National Healthcare Corp. NHC 10 2.46% 34.32% 13.94 0.02
Owens & Minor Inc. OMI 16 2.77% 56.14% 20.26 0.21
Span-America Medical Systems SPAN 15 2.82% 33.14% 11.74 0.00
Steris Corp. STE 9 1.83% 32.81% 17.93 0.51
Utah Medical Products UTMD 10 1.88% 36.90% 19.63 0.18

For companies that have increased dividends for more than 20 consecutive years we have JNJ, & MDT. For payout ratios, JNJ and OMI are the only companies higher than 50% but even at these levels there is room to grow dividends further. Looking at debt, all 8 stocks sport a low debt/equity ratio.

Looking at average dividend growth significant differences begin to appear. While most show decent growth across the board two look weak. When looking at potential dividend growth companies it is not necessary to pursue high dividend yields as strong growth rates can effectively compensate over time. Unfortunately UTMD & NHC, with their low yield and low growth, are unattractive and removed from the list.

Company Symbol 1 Yr DGR 3 Yr DGR 5 Yr DGR 10 Yr DGR
Covidien plc COV 22.00% 15.52% 12.25% n/a
Johnson & Johnson JNJ 7.92% 7.07% 7.61% 10.84%
Medtronic Inc. MDT 6.93% 7.89% 11.56% 14.87%
National Healthcare Corp. NHC 3.33% 4.71% 6.62% n/a
Owens & Minor Inc. OMI 9.09% 10.75% 12.48% 15.20%
Span-America Medical Systems SPAN 9.28% 9.83% 8.65% 14.24%
Steris Corp. STE 11.11% 15.44% 23.36% n/a
Utah Medical Products UTMD 2.07% 1.57% 1.71% n/a

Our quick search has yielded 6 potentially attractive examples to add to your portfolio. Like any investment you should research further before purchasing any equity as this report is nothing more than a result of some surface level values and ratios.

Covidien plc (COV): Covidien plc develops, manufactures, and sells healthcare products for use in clinical and home settings worldwide.

Johnson & Johnson (JNJ): Johnson & Johnson, together with its subsidiaries, is engaged in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics.

Medtronic Inc. (MDT): Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. The company operates in two segments, Cardiac and Vascular Group, and Restorative Therapies Group.

Owens & Minor Inc. (OMI): Owens & Minor, Inc., together with its subsidiaries, operates as a healthcare logistics company. The company offers supply chain assistance to the providers of healthcare services; and the manufacturers of healthcare products, supplies, and devices.

Span-America Medical Systems (SPAN): Span-America Medical Systems, Inc. manufactures and distributes various therapeutic support surfaces and related products for the medical, consumer, and industrial markets primarily in the United States and Canada. The company operates in two segments, Medical and Custom Products.

Steris Corp. (STE): STERIS Corporation develops, manufactures, and markets infection prevention, contamination control, microbial reduction, and procedural support products and services for healthcare, pharmaceutical, scientific, research, industrial, and governmental customers worldwide. The company operates in three segments: Healthcare, Life Sciences, and STERIS Isomedix Services. - Comments: 0


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