The list of dividend champions includes companies which have managed to increase dividends every single year for at least 25 years in a row. This is a very rare occurrence, and is indicative of a company that has a unique business model that withstood the test of time. Only a company with a unique set of competitive advantages can manage to grow the business, maintain its dominant industry position, and shower shareholders with more cash every single year for at least a quarter of a century. As of the time of this writing, there are 109 such businesses in the US. The list of Dividend Champions is maintained by David Fish, who is a true superhero for ordinary dividend investors.
After obtaining the list every month, I try to get it to a more manageable level by weeding out companies whose dividends are at risk.
My screening criteria on the list of dividend champions includes:
Assets in private equity and venture capital strategies have seen significant growth in recent years. In comparison, assets in the hedge fund industry have experienced slowing growth rates. Q2 2021 hedge fund letters, conferences and more Over the six years to the end of 2020, hedge fund assets increased at a compound annual growth rate Read More
- P/E ratio at or below 20
- Dividend Payout Ratio below 60%
- EPS growth over the past decade
- Dividend Growth exceeding 3%/year
The companies which met this criteria include:
|Name||Symbol||Years Annual Dividend Increases||P/E Ratio||Dividend Yield||Dividend Per Share||Earnings Per Share||Dividend Payout Ratio||10 year Dividend Growth||Stock Price|
|AFLAC Inc.||AFL||34||11.21||2.39%||$ 1.72||$ 6.42||27%||11.68%||71.99|
|Chesapeake Financial Shares||CPKF||25||13.17||2.22%||$ 0.50||$ 1.71||29%||8.19%||22.50|
|T. Rowe Price Group||TROW||31||14.28||3.36%||$ 2.28||$ 4.75||48%||14.45%||67.83|
|Wal-Mart Stores Inc.||WMT||44||15.89||2.93%||$ 2.04||$ 4.38||47%||11.80%||69.61|
|S&P Global Inc.||SPGI||44||16.33||1.26%||$ 1.64||$ 7.94||21%||7.09%||129.69|
|Leggett & Platt Inc.||LEG||45||18.17||2.56%||$ 1.28||$ 2.41||53%||6.86%||50.09|
|Sonoco Products Co.||SON||34||18.98||2.78%||$ 1.48||$ 2.81||53%||4.28%||53.32|
|Bemis Company||BMS||34||19.66||2.46%||$ 1.20||$ 2.48||48%||4.32%||48.75|
|General Dynamics||GD||25||19.69||1.79%||$ 3.36||$ 9.52||35%||12.81%||187.52|
|Stanley Black & Decker||SWK||49||20.09||1.93%||$ 2.20||$ 6.51||34%||6.71%||130.80|
|Genuine Parts Co.||GPC||61||20.23||2.71%||$ 2.63||$ 4.63||57%||6.92%||92.84|
|Tompkins Financial Corp.||TMP||30||20.53||2.24%||$ 1.80||$ 3.91||46%||5.45%||80.26|
|Eaton Vance Corp.||EV||36||20.63||2.50%||$ 1.12||$ 2.15||52%||9.85%||44.35|
|1st Source Corp.||SRCE||29||20.75||1.60%||$ 0.72||$ 2.22||32%||4.01%||46.00|
As usual, this list is not a recommendation to buy or sell anything. The next step of the process is evaluating the fundamental trends in every company listed above, and making a determination on whether to buy anything or pass and wait for another opportunity.
Building a diversified portfolio takes time, effort, and a large dose of patience, persistence and perseverance. It involves looking for companies to buy, and investing regularly. The number and quality of companies available for sale vary from month to month. If you build your dividend machine slowly over time, you will be able to achieve diversity in number of securities and diversify over time.
The portfolio weights for various holdings will vary over time. In the initial stage, I would try to weight each individual position equally. Over time, changes in prices and availability of good values will affect the relative portfolio weights. As I try to add money each month however, I have to make decision about not adding money to overweight positions, or initiating new positions in new dividend growth companies. For example, I have an above average weight in Aflac. As a result, I would not be buying Aflac, but may focus my attention on other companies on the list.
In the next stage of the game, winning dividend investors focus on the dividend income, and ignore the manic-depressive Mr Market. The Market is a giant distraction, whose mood swings need to be ignored.
- John Bogle Likes Dividends
- Dividend Champions – The Best List for Dividend Investors
- Are you patient enough to become a successful dividend investor?
- How to properly weight dividend portfolio holdings
Article by Dividend Growth Investor