One way to monitor dividend growth investments is by checking the weekly list of dividend increases. I also find helpful to monitor the annual raises for dividend growth stocks that are on my list for further research. It is great to see companies I have bought reward me with rising dividend income many years after I had made the decision to invest in the first place.
With dividend growth investing, you do all the work in stock selection upfront. After that, a well-diversified portfolio should shower its owner with a growing stream of dividend income for decades.
Over the past week, several companies raised their quarterly dividends. The companies include:
Target Corporation (NYSE:TGT) operates as a general merchandise retailer. The company boosted its quarterly dividend by 7.10% to 60 cents/share. This dividend champion has raised dividends for 49 years in a row. The ten-year dividend growth rate is 19.60%/year. Target trades at 13.20 times forward earnings and yields 3.50%.
UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified health and well-being company in the United States. The company boosted its quarterly dividend by 25% to 60 cents/share. This dividend stock has raised dividends for 7 years in a row. The ten-year dividend growth rate is 62.10%/year. Such a high rate of dividend growth is normal for companies in the first phase. UnitedHealth Group trades at 17.60 times forward earnings and yields 1.80%.
Casey’s General Stores Inc. (NASDAQ:CASY), together with its subsidiaries, operates convenience stores under the Casey’s General Store name in 14 Midwestern states, primarily Iowa, Missouri, and Illinois. The company boosted its quarterly dividend by 9.10% to 24 cents/share. This dividend achiever has raised dividends for 17 years in a row. The ten-year dividend growth rate is 17.30%/year. Casey’s trades at 20.50 times forward earnings and yields 0.80%.
FedEx Corporation (NYSE:FDX) provides transportation, e-commerce, and business services in the United States and internationally. The company boosted its quarterly dividend by 60% to 40 cents/share. This dividend achiever has raised dividends for 15 years in a row. The ten-year dividend growth rate is 11.20%/year. FedEx trades at 14.90 times forward earnings and yields 1%. I have not been a fan of FedEx or rival United Parcel Services (NYSE:UPS) due to the lack of growth in earnings per share over the past decade.
C. R. Bard Inc. (NYSE:BCR), together with its subsidiaries, designs, manufactures, packages, distributes, and sells medical, surgical, diagnostic, and patient care devices worldwide. The company boosted its quarterly dividend by 8.30% to 26 cents/share. This dividend champion has raised dividends for 45 years in a row. The ten-year dividend growth rate is 6.30%/year. C. R. Bard trades at 22.20 times forward earnings and yields 0.50%.
Sometimes, dividend increases also remind me of mistakes of omission I may have made. Mistakes of omission are situations where I have liked a certain company, but never really pulled the trigger on it due to stubbornness on my part. In retrospect it is easy to give myself a hard time, since I have over eight years of experience in writing and analyzing dividend growth stocks. Some of the lessons I have learned after those years are easy see in retrospect.
One such mistake is C. R. Bard, which has always had a low current yield. However, the company has consistently been able to grow earnings and dividends, and delivered exceptional returns to its shareholders. Earnings per share went from $2.55 in 2006 and are scheduled to exceed $10 in 2016. The reason I never bought the stock was due to the low current yield. Please learn from my mistake and do not forget the “growth” part of the dividend growth strategy.
Full Disclosure: Long CASY, TGT, UNH.