I review the list of dividend increases each week, as part of my monitoring process. This exercise helps me monitor existing holdings and potentially identify companies for further research.

Dividend increases offer a good gauge for management's opinion on near terms business conditions and their affect on company cashflows. As a result, dividend increases can provide a good overview of management's assessment of the business environment. Changes in the pace in dividend increases could provide valuable insight about the business, in conjunction with other factors at play, that could potentially provide investors with a slight edge.

I identified seven companies that increased dividends last week. All of these companies have managed to increase dividends for at least a decade. My short review of each company is listed below:

American Tower (AMT) one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of nearly 226,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

American Tower raised its quarterly dividend by 3.20% to $1.62/share. This is a 10.20% increase over the dividend paid during the same time last year. This is the 11th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 20.30%.

The REIT grew FFO/share from $3.01 in 2012 to $11.41 in 2022. It expects to generate $9.74/share in FFO in 2023.

The REIT sells for 17.40 times forward FFO and yields 3.89%.

Fortis Inc. (FTS) operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries.

Fortis hiked quarterly dividends by 4.40% to CAD $0.59/share. This marked the 50th year of consecutive annual dividend increases for this newly minted Canadian dividend king. Over the past decade, Fortis has managed to grow dividends at an annualized rate of 6.27%.

"Our Board of Directors declared a fourth quarter dividend representing a 4.4% increase that will mark 50 years of consecutive increases in dividends paid," said David Hutchens, President and CEO, Fortis Inc. "This makes Fortis one of only two companies listed on the Toronto Stock Exchange to reach this significant milestone."

"Our sustainable regulated growth strategy is focused on delivering cleaner energy that remains affordable and reliable for our customers while supporting annual dividend growth of 4-6% through 2028,” said Mr. Hutchens.

Between 2013 and 2022, the company managed to grow earnings from $1.74/share to $2.78/share. Fortis is expected to earn $3.05/share. I wanted to state that all numbers listed here for Fortis are in Canadian Dollars.

The stock sells for 17.84 times forward earnings and yields 4.35%.

Microsoft Corporation (MSFT) develops and supports software, services, devices and solutions worldwide. 

Microsoft boosted quarterly dividends by 10.30% to $0.75/share. This is the 19th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 11.80%.

Microsoft grew earnings from $2.66/share in 2014 to $9.72/share in 2023.

The company is expected to earn $11/share in 2023.

The stock sells for 29 times forward earnings and yields 0.94%.

Norwood Financial Corp. (NWFL) operates as the bank holding company for Wayne Bank that provides various banking products and services.

The company increased quarterly dividends by 3.60% to $0.29/share. This is the 2th year of consecutive annual dividend increases for this dividend champion. Over the past decade, it has managed to grow dividends at an annualized rate of 4.40%.

Mr. Donnelly commented, “The Board is extremely pleased to provide our shareholders with this quarterly dividend. It reflects the Company’s financial strength and strong capital position which has contributed to our solid performance.”

Between 2013 and 2022, the company managed to grow earnings from $1.56/share to $3.59/share.

The company is expected to earn $3.38/share in 2023.

The stock sells for 7.95 times forward earnings and yields 4.42%. 

Shoe Carnival, Inc. (SCVL) operates as a family footwear retailer in the United States.

The company hiked quarterly dividends by 20% to $0.12/share. This marked the 11th year of annual dividend increases for this dividend achiever. Over the past decade, the company managed to grow dividends at an annualized rate of 18.90%.

“This marks our 46th consecutive quarterly dividend. With continued strong cash flow generation and no long-term debt, the Board’s decision to significantly increase the quarterly dividend demonstrates our confidence in driving continued shareholder returns, while also investing to grow the business,” commented Mark Worden, Shoe Carnival’s President and Chief Executive Officer.

Between 2014 and 2023 the company managed to grow earnings from $0.66/share to $4/share.

The company is expected to generate $3.09/share in 2023.

The stock sells for 7.26 times forward earnings and yields 2.10%.

Starbucks Corporation (SBUX) operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America, International, and Channel Development. 

The company raised quarterly dividends by 7.50% to $0.57/share. This dividend achiever has increased dividends for 13 years in a row. Over the past decade, it has managed to grow dividends at an annualized rate of 18.70%.

Starbucks has managed to grow earnings per share from $1.01 in 2013 to $2.85/share in 2022.

The company is expected to earn $3.45/share in 2023.

The stock sells for 26.95 times forward earnings and yields 2.43%.

Texas Instruments Incorporated (TXN) designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States and internationally. It operates in two segments, Analog and Embedded Processing. 

The company raised quarterly dividends by 4.80% to $1.30/share. This marks 20 consecutive years of dividend increases for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 20.30%.

The increase is consistent with TI's long-term objective for dividends by providing a sustainable and growing dividend and reflects the company's continued commitment to return all free cash flow to its owners over time.

Between 2013 and 2022, the company increased earnings from $1.94/share to $9.51/share.

The company is expected to earn $7.44/share in 2023.

The stock sells for 21.56 times forward earnings and yields 3.25%.

Relevant Articles:

- Three Dividend Growth Stocks Rewarding Shareholders With Raises

- Eight Dividend Growth Companies Increasing Dividends Last Week

- Three Dividend Growth Companies Increasing Dividends Last Week

- Seven Dividend Growth Stocks Rewarding Shareholders With Raises

I am a big fan of Warren Buffett, the Oracle of Omaha. His letters to shareholders are an excellent resource for students of value investing. I've studied his strategy, investments and his work, and believe that Warren Buffett is a Dividend Growth Investor in disguise.

I am also a big fan of Dividend Growth Investing. The goal of every Dividend Growth Investor is to generate enough in dividend income to pay for their expenses in retirement. To get there you save and invest consistently in quality dividend growth companies that sell at attractive valuations. The next step is to keep at it, and also patiently let the power of compounding do the heavy lifting for you. It takes time to build this portfolio, brick by brick, but once you reach critical mass, the power of compounding is very visible. With dividend growth on top of regular dividend reinvestment and regular investment and after giving it some time, that dividend income and net worth goes in turbocharged mode.

I like the concept of Dividend Growth Investing when it comes to investing for retirement. The investor builds a diversified portfolio by investing regularly, reinvests those dividends until their dividend income covers expenses. At that point, they can retire. 

I recently saw an interesting video clip of Warren Buffett, which discussed how he would invest if he were retired.

You can read the transcript below:

"Warren Buffett: If I were retired, I had a million-dollar portfolio of stocks paying me $30,000 a year in dividends. my children were grown and the house was paid off, I wouldn’t worry too much about having a lot of cash around."

I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me to monitor developments in existing holdings. It also helps me to potentially identify companies for further research.

I usually focus on companies with a ten year streak of annual dividend increases, in an effort to weed out cyclical companies. It is not a small feat to raise dividends through a full economic cycle. Meeting this screen increases the chances of identifying quality companies for further research.

Of course, this is just a screen. I look at several data points in order to determine if a company should be put on the list for further research, or discarded. 

I look at growth in earnings per share over the past decade, because earnings per share are the fuel behind future dividend increases. 

I also look at the most recent dividend increase, and compare it to the 5 and 10 year averages.

Then I also review trends in dividend payout ratios. That's because I do not want dividend growth that happens solely from expansion in the payout ratio.

If a business is fundamentally sound, I would put it on my list for further research.

Last but not least, I also look at valuation. If a business is overvalued, I would determine a price that I would consider it and wait. If a business is fairly valued, I would research it first (assuming I haven't done that before".

Over the past week, there were three companies that raised dividends. These companies have also increased dividends for at least ten years in a row. The companies include:

Philip Morris International Inc. (PM) operates as a tobacco company working to delivers a smoke-free future and evolving portfolio for the long-term to include products outside of the tobacco and nicotine sector. 

The company boosted its quarterly dividend by 2.40% to $1.30/share. This is the 15th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 4.70%/year over the past decade.

The company is expected to earn $6.25/share in 2023. Earnings per share went from $5.26 in 2013 to $5.82 in 2022.

The stock sells for 15.34 times forward earnings and yields 5.50%.

You can view PMI's dividend history since 2008 below:

Realty Income (O) is a real estate investment trust ("REIT") with over 13,100 real estate properties primarily owned under long-term net lease agreements with commercial clients. 

The company increased monthly dividends to $0.256/share. This was a 0.20% increase over the previous quarter and 3.22% increase over the distribution paid during the same time in the previous year. Over the past decade, the company has managed to grow dividends at an annualized rate of 5.30%.

This dividend aristocrat has increased annual dividends since 1994.

Realty Income has managed to grow FFO/share from $2.41 in 2013 to $4.04 in 2022. Realty Income is expected to grow FFO/share to $4.12 in 2023.

The stock sells for 13.12 times forward FFO and yields 5.60%.

You can view Realty Income's dividend history from 1994 below:

Fifth Third Bancorp (FITB) operates as a diversified financial services company in the United States. It operates through three segments: Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management. 

The company raised its quarterly dividends by 6.10% to $0.35/share. This is the 13th consecutive annual dividend increase for this dividend achiever. The company has managed to grow dividends at an annualized rate of 13.10% over the past decade. Unfortunately, the dividend is still below its peak 2007 levels.

Between 2013 and 2022, the company managed to grow earnings per share from $2.05 to $3.38.

The company is expected to earn $3.30/share in 2023.

The stock sells for 8.30 times forward earnings and yields 5.10%.

Relevant Articles:

- Three Dividend Growth Companies Increasing Dividends Last Week

My investment philosophy is centered around buying quality dividend growth companies at an attractive valuation. I have discussed the importance of having a disciplined approach when it comes to prudent investing and avoiding overpaying for a stock. 

Just like everything else however, valuation could turn out to be in the eyes of the beholder.

I was thinking about valuation, and its components "growth" and "value", as I was compiling the returns of the Dividend Aristocrats from 2013. I looked at the ratios, and compared total returns through 2023 July 31.

Valuation is a double edged sword.

On one hand, if you overpay for a stock, you may end up losing money or not making much money.

On the other hand, if you're too conservative on your valuation assessment and don't invest, you may end up missing out on a lifechanging investment.

A stock may appear to be cheap, but in reality it could turn out to be a value trap as well. A primer example of that is AT&T over the past decade.

In my experience, I invested in Visa in 2011 when the stock was selling around 20 times earnings and had a dividend yield of about 0.70%. The stock seemed expensive at the time. Today it is up from $22 to $248/share and the dividend is at $1.80/share for an yield on cost of about 8%. In hindsight it seems cheap. If someone didn't invest in it because the yield was too low, they would have missed out on an incredible compounding.

Another company that seemed cheaper was Con Edison. Stock sold at 16 times earnings and had a dividend yield of 4.10%. Stock seemed fairly valued at the time. Today, it is up from $59 to $90/share and the dividend is up to $3.24/share for an yield on cost of 5.50%.. In hindsight it does not seem as cheap, as its share price and dividend has barely kept up with inflation.

This discussion is more of a reminder that investing is part art, part science. It is not a scientific exercise like physics, that has known laws which can be applied at all times with the same result. There is always an unknown factor after all.

This is also a reminder to be flexible in ones approach, without being too lenient however. Valuation is taking into consideration both “value” and ‘growth” schools of thought, without looking at things in isolation. Per Warren Buffett, the two approaches are joined at the hip: Growth is always a component in the calculation of value, constituting a variable whose importance can range from negligible to enormous and whose impact can be negative as well as positive.

It’s definitely helpful to think through trade-offs, and opportunity sets, rather than thinking in definitive terms such as good and bad, black and white. It's more of a gray.

When it comes to valuation, it is important to understand what drives future returns in a company.

In general, returns comprised of dividends and capital gains.  The fundamental returns of a company are dependent on dividends and earnings growth. The speculative component is dependent on changes in the valuation multiple. 

The US stock market has generated annualized returns of about 10%/year since 1926. This was driven by the 4% average annual dividend yield and the 6% growth in earnings per share. Any changes in the valuation multiple have had a very small impact over the past 97 years or so. 

Changes in valuation multiples do not matter as much over really long periods of time. They do matter over shorter periods of time however, such as 10 or 20 years. This could be a long period of time for the average investor, who probably invests for the next 30 – 40 years.

I use this model in my investments as well.

In an ideal world, a company would grow earnings per share, grow dividends and increase intrinsic value at a decent pace over the course of time.  Intrinsic value is the value of a business that could be attained by selling to another knowledgeable buyer. Think of a restaurant owner selling their business to another person. In an arms length transaction they are unlikely to just sell their blood, sweat and tears at a ridiculously low price, in relation to value. A reasonable buyer is also unlikely to massively overpay in an arms length transaction. That does happen in the stock market however.

In the real world, things are messier. For example, even if earnings per share and dividends per share increase at the same pace over a long period of time, the share price may not do so. That’s because share prices fluctuate much more than fundamentals, as observed by dividends and earnings per share.

As a result, share prices routinely may go above or below intrinsic value. This creates opportunities to buy shares of a good company at a discount. However, there are a lot of companies available at a discount or premiums to choose from. We need to compare not only one investment on its own merits, but also in relation to other investments. That’s our opportunity cost.

This works for comparing two companies. But in the real world, we also compare to other alternatives, such as investing in fixed income like US Treasury Bonds for example. Let’s simplify and just look at how I would compare two companies.

For example, a company that earns $4/share that never grows and pays $3/share in dividends may look cheap at $40/share. This company sells at 10 times earnings and yields 7.50%.

Another company that earns $4/share, grows at 10%/year and pays $2/share in dividends may look expensive at $80/share. This company sells at 20 times earnings and yields 2.50%.

Many retired investors may focus on chasing the high current yield of investment A, and ignore the smaller but growing dividend in company B. In my opinion, they should think about expected returns. They should also think about future yields on cost.

The expected returns on company A are 7.50%, assuming the earnings multiple stays constant. If you bought that stock and spent the dividends, after 30 years you would still be earning only 7.50% yield on the original cost. Chances are that those dividends would have a lower purchasing power due to inflation as well.

The expected returns on company B are 12.50%, assuming the earnings multiple stays constant. If you bought the stock and spent the dividends, after 30 years you would be sitting on an yield on cost of over 43%.  Of course, just like chasing yield is bad, so is chasing growth. Trees don't grow to the sky.

This exercise assumes that a high yielding company that never grows would be able to maintain that high payout ratio and that its business would go on without any changes for 30 years. That is a wild cart that may or may not turn out to be true. In reality, some companies with high payout ratios may end up cutting dividends if earnings per share hit a temporary slide. If the business starts descending into a permanent decline, those dividends may end up on the chopping block. We need to consider those trade-offs in the opportunity set.

This exercise also assumes that company B would have a high earnings growth for a very long period of time. That’s probable for a company with a strong moat, a competitive advantage of sorts, which has the pricing power and/or riding a long secular tailwind in demand to be able to grow earnings over a period of 30 years. Growth is never a given. If the business is unable to grow those earnings, valuation multiples would shrink. We need to consider those trade-offs in the opportunity set.

Of course, the same exercise will have different conclusions if valuations changed. 

If company A above sold at the same multiple, but turned out they can grow at 2.50%/year, the expected returns goes up to 10%/year.

If company B above sold at a multiple of 40, and growth stayed at 10%/year, the expected returns go down. The yield would be 1.25% + growth of 10% would result in expected returns of 11.25%. 

The same exercise will be even more fun as valuation multiples change

For example, if company A starts growing at 5%/year, then it may get re-rated from a P/E of 10 to a P/E of 15. That’s because it went from a period of low expectations to a period of unexpected good news. Investors who locked in an initial yield of 7.50% would also see some decent dividend growth and doubling of yield on cost in about 14 years. They achieve a high return because expected returns went from 7.50% to a higher amount. With a low P/E company however, the risk is that earnings are in a slow gradual decline. If they unexpectedly grow, that may be a good situation for the investor. 

If company B however sees growth decelerating from 10%/year to 5%/year, then it may get re-rated from a P/E of 20 to a P/E of 10. That’s because it went from high expectations to lower expectations. Due to this re-rating of the stock, investors may sit for 14 years and see limited growth in the share price, even if earnings double over that time period. That’s because reality was worse than expected. Only return would be from the share price. The expected returns dropped from 12.50% to a lower amount. 

That’s always one risk I think about with growthier dividend stocks – 1. That growth would decelerate 2 . That the P/E multiple may shrink as a result.

These scenarios were mostly a discussion of how I think about expected returns. They were discussions about how to calculate expected returns. They were also a discussion of the trade-offs involved and the possibility of potential outcomes that differ from expectations. It’s important to think about the risks and opportunities present, when making an investment. That can help position ourselves to better prepared to minimize the impact of any negative items thrown our way, while providing us with the opportunity to reap maximum rewards when the winds go our way.

After going through this exercise, along with my experience investing for the past few years, I’ve come to the conclusion that missing out on a potential big investment is a bigger sin than buying a bad investment. This of course assumes a diversified portfolio. 

That’s because if you invest in a company, the most you can lose is the amount put to work there, minus any dividends received (unless reinvested through DRIP). But the amount that can be made is virtually unlimited. In other words, a potential great investment can pay for a few stinkers along the way, which the portfolio is guaranteed to have along the way. 

In addition, it is hard to determine in advance, the conviction behind each investment. Hence, it may make sense to buy a diverse basket of quality companies, over time, with strong fundamentals, and then hold them. While it seems “irresponsible” to ignore valuation, in reality, it is hard to determine in advance if a stock is cheap or expensive. That’s because while we may know the P/E and dividend yield, we do not really know what the future EPS and DPS growth is going to be. At least that’s my conclusion from observing the aristocrats.

In practical terms, I view this as investing equally, in a group of companies that have qualitative characteristics (dividend growth companies). Then in the spirit of Coffee Can Portfolios, let the portfolio concentrate on its own, and rarely sell. It may be hard to try to avoid value traps (low P/E, low growth companies), and growth traps (high P/E, high expected growth). But that would be the cost of admission to end up with the quality dividend growth companies that grow earnings and dividends and intrinsic values for decades, building immense wealth in the process. That would more than compensate for any losers.

Going back to the main point of this article, valuation is a double edged sword.

If you overpay for a stock on one hand, you may end up losing money or not making much money.

If you're too conservative on your valuation assessment and don't invest on the other hand, you may end up missing out on a lifechanging investment.

A stock may appear to be cheap as well, but in reality it could turn out to be a value trap as well.

While it is not easy to "value", you still need to take into consideration yield, growth, P/E ratios in order to make an educated guesstimate.  You also need to be cognizant of trade-offs, and put yourself in the best position to benefit from any wealth creations from companies you invest in, while also minimizing losses as much as possible.

Relevant Articles:

- How to value dividend stocks

I review the list of dividend increases as part of my monitoring process. This exercise helps me monitor existing holdings and uncover candidates for further research. Monitoring dividend increases is one of the inputs I use to evaluate companies.

Brady Corporation  (BRC) manufactures and supplies identification solutions (IDS) and workplace safety (WPS) products to identify and protect premises, products, and people in the United States and internationally. It operates through two segments, IDS and WPS. 

The company increased quarterly dividends by 2.20% to $0.235/share. This was the 38th consecutive annual increase in dividends for this dividend champion.

Brady Corporation lost $0.89/share in 2014, but then managed to grow out of the whole to $3.51/share in 2023.

The company is expected to earn $4.06/share in 2023.

The stock sells for 13.60 times forward earnings and yields 1.71%.

New Jersey Resources Corporation (NJR) provides regulated gas distribution, and retail and wholesale energy services. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. 

The company raised its quarterly dividend by 7.70% to $0.42/share. This is the 28th consecutive year of annual dividend increases for this dividend champion.

Between 2013 and 2022, the company managed to grow earnings from $1.38/share to $2.86/share.

The company is expected to earn $2.69/share in 2023.

The stock sells for 15.70 times forward earnings and yields 3.70%.

Verizon Communications Inc. (VZ) provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business).

The company raised quarterly dividends by 1.90% to $0.665/share. This is the 17th consecutive year Verizon’s Board has approved a quarterly dividend increase. The company is a dividend achiever.

Verizon managed to grow earnings per share from $4.01/share to $5.06/share between 2013 and 2022

The company is expected to earn $4.72/share in 2023.

The stock sells for 7.16 times forward earnings and yields 7.72%.

Relevant Articles:

- Nine Dividend Growth Stocks Rewarding Shareholders With Raises Last Week

There comes a time in the life of every investor, where one of their holdings experiences troubles of some sort. It doesn’t matter how much research you did upfront, you will have those.

I’ve had those too. 

Typically a company would have missed earnings, and the share price would go down or stay flat for extended period of time. Some shorter-term investors would panic, and start abandoning the ship. The sentiment turns sour, and more people start abandoning the company. Just mentioning the name makes people uncomfortable, let alone have them admit they have ever owned it.

I’ve had those too.  In fact, I probably have a few of them right now.

I have learned that I do not know in advance if a company’s troubles are temporary or the beginning of the end. Few can tell really.

I do know however that I should hold tight for as long as possible, for as long as the reason I bought still holds on.

I buy companies with a long streak of annual dividend increases. When I buy a company, I believe it to be a quality company selling at what I believe to be fair valuations. For as long as that company can at least maintain dividends, I would hold on to it. I would likely not add to it if fundamentals do not meet my entry criteria, but I would hold on to it.

As someone who has spent a lot of time reviewing dividend histories for a lot of companies (dead or alive), I can tell you that dividend growth does change from year to year and from cycle to cycle for different companies. It is rare to see a company grow at the same rate of dividend growth all the time. In reality, dividend growth goes up, then goes down, and may even turn flat as companies experience short-term turbulences. The best businesses adapt, and thrive. They take punches, consolidate, but then get back on their feet. They only tend to cut dividends when something is irreparably damaged. This typically tells you that the business environment or the product or the company no longer rides the same tailwind that produced the historical record of success. This means this change has caused this business to be outside my circle of competence in defiance of my original expectations, so it’s time for me to move on to some other long-term trend that can build wealth. 

I would sell in an instant however one second after the company cuts or suspends its dividend.

I would be very patient in holding through the ups and downs, and give the company as much time as it needs to turn the ship around. Even if it takes 5 or 10 years. I invest for the next 20 – 30  years or longer, so I can afford to hold for as long as they don’t cut the dividend. Many would have opinions, and have fear or greed, but I would be able to hold on and sit tight, for as long as I am getting paid to hold and that amount is not cut. If that dividend is cut however, then my original reason for owning the stock (enjoying a stable and growing dividend income) is not longer valid. That’s a fact that causes me to sell.

I follow a fact based approach to investing. I do not care about hopes and dreams and opinions, but facts. A dividend cut is a fact, so I sell. If the dividend is unchanged, then that’s a fact that causes me to hold. 

Management teams in the US are reluctant to cut dividends, because they view it as a failure. They are right, it is a failure. 

I do not want to sell a stock willy-nilly, just because there is some pressure. There is a trade-off of course. The issues companies face could either be temporary, in which case selling would have been a mistake. OR The issues companies face could be permanent, in which case selling is the best decision. But if you have to choose between worrying that you sold a value trap at $10 or $5, it doesn’t really matter in my opinion. It matters to keep amount at risk limited, and try to own companies that may grow EPS/DPS and intrinsic value.

If that pressure turns out to be right, and I sold “early”, I will have retained a higher amount of money to redeploy elsewhere. At least in theory. Otherwise, the theory says, by the time the dividend is cut and I sell, it would be too late. (They are probably right, but I also know that I won’t be right 100% of the time and I do not need to predict every twist and turn in a company share price. I buy companies with the expectation that they do well over time. If I am wrong, I cut my losses and get out when dividends are cut. I also keep amount invested per stock limited, so as to protect my capital when bad things happen to (good people -me ))

If that pressure turns out to be wrong however, and I sold “early”, I would have wasted a high amount of money by selling low and missing out on all upside. At least in theory. The theory says that if I try to predict a dividend cut that never comes (meaning I am wrong), I would be selling low and it would be too early. It could be even worse if I end up missing out on all the future prosperity and also ended up replacing a perfectly good company with something that turns out to be a value trap on its own. Compounding mistakes is never fun.

I know that this is getting to be a little bit of a rambling post, so let me provide some examples from my own experience.

Back in 2014 – 2017 we had McDonald’s (MCD) share price go nowhere for a few years. Earnings had started to stagnate, and people started to create all sorts of narratives about things. A lot of folks sold their stock. The company then simply managed to try and right the ship, and has managed to double earnings per share in the past 6 years. The stock has rebounded and dividends per share are rising as well.

In this case, holding on seems like a good idea. I’d tell you however that a lot of folks disagreed with me and argued with me against me holding. Urging me to sell. The issue is if I sold, I would have likely bought another company that may have done worse than McDonald’s. So I would have had a double loss of missing out on McDonald’s prosperity and ending up with a value trap.

This is not the first time McDonald's investors had their patience tested out. Back in the early 2000s, the company had experienced some growing pains, it had overexpanded and level of service had been declining. We also had an increased attention to the fact its food is not very healthy (remember "Supersize Me"). That being said, for the investor who held on, they did well. Of course, if they hadn't turned the operations around, and had cut dividends, the picture would have been much different.

Perhaps it’s still early to tell, but I am also holding on to Cardinal Health (CAH), a position I initiated about 5 years ago. The investment had been dead money for quite some time, and has generated abysmal annualized dividend growth over that time period. However, the share price has almost doubled, so perhaps the market is foolishly or smartly predicting that things are about to turn around. Perhaps EPS growth and dividend growth would return? That being said, the company is on track to earn $6.67/share in 2023, versus $3.42/share in 2014 and $4.54 in 2019.

Two companies I am in the red today include 3M (MMM) and Walgreen’s (WBA). I’ve held those for over 10 – 15 years. When I bought them, they were considered to be quality dividend aristocrats, and they had managed to grow earnings and dividends at a good pace. In fact, they have increased dividends at a decent pace over the past 10 – 15 years.

In the case of Walgreen’s, the company had strong earnings growth and dividend growth prospects around 2010 – 2011 - 2012. Dividends have doubled over the past decade. Earnings per share also almost doubled from $2.69 in 2013 to $5.02 in 2022. It’s expected to earn $4/share in 2023, and pay $1.92/share in dividends. The dividend seems adequately covered from earnings. Dividend growth has come to less than 1% in 2022 and the company has skipped its dividend increase so far in 2023. I understand that things are looking hard, and there are a lot of competitive pressures. I will stick to the stock for the time being, for as long as the dividend is not cut. I viewed Walgreen’s as a growth stock about 10 – 15 years ago. It’s just a good reminder that you should not chase growth, just the same way as you should not chase yield either. Either way, I am sticking to this stock for as long as they don’t cut the dividend. I am not adding to it however. 

In the case of 3M, the company has managed to grow earnings per share at a decent clip between 2013 and 2022 from $6.83 to $10.21. It’s expected to earn $8.87/share in 2023. It pays a $6/share annualized dividend, so the distribution has a high payout ratio of around 67%. It’s manageable, for as long as earnings do not dip further. Any lack of future earnings growth would mean lack of future dividend growth as well. There are some lawsuits around, which are taking managements focus away from running the business in my opinion. Once these are behind us (or if they are behind us), they have the chance to regroup and hopefully get the business back on its feet. Either way, I am sticking to this stock for as long as they don’t cut the dividend. I am not adding to it however.

Another fun company I hold on to is Altria (MO). Back in 2017, the stock was overvalued, selling for roughly 25 - 30 times free cash flows per share. Free Cash Flow per share went from $2.12 in 2013 to $2.45 in 2017 to $5.02 in 2022. Yet, today the stock sells for 8 times Free Cash Flow/share. The stock price is down from a high of $70 - 75/share in 2017 to about $40 - $45/share in 2023. While management did burn billions of dollars on some terrible acquisitions (JUUL and Cannabis), the core business seems to be printing money for the time being.

Of course, tobacco has been a challenging business to hold, if you go by news headlines at least. Back in the late 1990s, tobacco companies almost went under due to heavy litigation. After the Tobacco Master Settlement Agreement, tobacco companies bounced back and kept printing cash to shareholders. There were some challenging times in the late 1990s, but shareholders who persisted despite the negative news headlines did well. There were no dividend cuts from the likes of Altria (then Phillip Morris). Phillip Morris did fail to raise quarterly dividends in 1997, though it did raise them in the third quarter of 1998. However, due to the timing of the increases, annual dividends kept increasing in 1996, 1997 and 1998, thus preserving its status of a dividend aristocrat. Again, nobody knew what would happen with tobacco in 1996 or 1997. But someone who held on for as long as the dividend is not cut would have done fine. If they had cut dividends however, mostly due to unfavorable litigation, that would have likely marked the end of the sector as an investable opportunity. However, someone who sold in fear of failure in 1997, would have likely regretted their behavior, as the company has delivered amazing total returns and dividend growth over the past 25 years.

I summary, when I invest, I try to buy shares in a quality business, at an attractive valuation. That business has a track record of annual dividend increases, which I expect to continue. I will continue holding on to that business, for as long as it does not cut or suspend dividends. 

Ultimately, it is hard to say in advance whether a business is experiencing temporary struggles or whether this business is experiencing an existential crisis all the way down to zero. This is why I keep holding on through the ups and downs, until the dividend is cut.

I also limit the amount of money I will allocate to that business as well, which limits the amount at risk for this particular position. I have a diversified portfolio, which I build over time as well, which serves as protection from the proverbial bad apple. 

Dividend growth investing is a simple but effective strategy. It is widely misunderstood too.

As a Dividend Growth Investor, I look for companies with a long history of annual dividend increases.

A long streak of consecutive annual dividend increases is typically an indication of a business with strong competitive advantages, good growth prospects, high returns on invested capital, and strong and recurring cash flows. A long streak of annual dividend increases is typical for companies with wide moats, which have tended to grow earnings per share for decades. As a long-term dividend investor, my goal is to identify such a business early in the game, buy it at an attractive price, and ride the economic trend for as long as possible. In other words, I am after companies that can grow earnings and dividends over time. I buy and hold forever, or in my case, for as long as they do not cut dividends.

Before doing so of course, I always review the company, its fundamentals and check the qualitative aspect of the business as well. Once I initiate a position, I also monitor the company for any major developments. But as part of my risk management process, I keep portfolio weights in check, and I very rarely would sell an existing position. I may not add to it if it stops meeting my entry criteria, which is guaranteeing a low allocation, as I build positions slowly and over time.

One of my favorite monitoring exercises is to check the list of dividend increases every week. That way, I get to see if my existing investments continue raising dividends, and if my thesis is still working. I also get to identify companies for future research through this exercise. In addition, I get to read the press releases and gauge managements sentiment towards the near-term prospects of the business.

My weekly review focuses on companies that have increased distributions for at least ten years in a row. During the past week, the eight companies that raised dividends include:

Altria Group, Inc. (MO) manufactures and sells smokeable and oral tobacco products in the United States.

The company raised quarterly dividends by 4.30% to $0.98/share. This is the 54th consecutive annual dividend increase for this dividend king.

Over the past decade, the company has managed to increase dividends at an annualized rate of 8.10%.

Between 2013 and 2022 the company managed to grow earnings from $2.26/share to $3.19/share.

Altria is expected to earn $5/share in 2023.

The stock sells for 8.74 times forward earnings and yields 9.10%.

Atrion Corporation (ATRI) develops, manufactures, and sells products for fluid delivery, cardiovascular, and ophthalmology applications in the United States, Canada, Europe, and internationally.

The company increased quarterly dividends by 2.30% to $2.20/share. This is the 21st year of consecutive annual dividend increases for this dividend achiever.

Over the past decade, the company has managed to increase dividends at an annualized rate of 14.60%.

The company managed to grow earnings per share from $13.22 in 2013 to $19.59 in 2022.

The company is expected to earn $15.37/share in 2023.

The stock sells for 30.24 times forward earnings and yields 1.89%.

BancFirst Corporation (BANF) operates as the bank holding company for BancFirst that provides a range of commercial banking services to retail customers, and small to medium-sized businesses. The company operates through Metropolitan Banks, Community Banks, Pegasus, Worthington, and Other Financial Services segments.

The company increased quarterly dividends by 7.50% to $0.43/share. This is the 30th year of consecutive annual dividend increases for this dividend champion.

Over the past decade, the company has managed to increase dividends at an annualized rate of 10.40%.

Between 2013 and 2022, the company managed to grow earnings from $1.78/share to $5.89/share.

The company is expected to earn $6.27/share in 2023.

The stock sells for 15.25 times forward earnings and yields 1.67%. 

EastGroup Properties, Inc. (NYSE: EGP) is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. 

The company increased quarterly dividends by 1.60% to $1.27/share. This is the 12th year of consecutive annual dividend increases for this dividend achiever. 

Over the past decade, the company has managed to increase dividends at an annualized rate of 8%.

The REIT increased FFO/share from $3.23 in 2013 to $7 in 2022.

The REIT is expected to generate $7.65/share in FFO in 2023.

The stock sells for 23.25 times FFO and yields 2.81%.

First American Financial Corporation (FAF) provides financial services. It operates through Title Insurance and Services, and Specialty Insurance segments. 

The company raised quarterly dividends by 1.90% to $0.53/share. This is the 13th year of consecutive annual dividend increases for this dividend achiever.

Over the past 5 years, the company has managed to increase dividends at an annualized rate of 7.40%.

The company managed to grow earnings per share from $1.74 in 2013 to $2.46 in 2022.

The company is expected to earn $4.40/share in 2023.

The stock sells for 13.62 times forward earnings and yields 3.48%. 

MGE Energy, Inc. (MGEE) operates as a public utility holding company primarily in Wisconsin. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other segments. 

The company hiked quarterly dividends by 4.90% to $0.4275/share. MGE Energy has increased its dividend annually for the past 48 years and has paid cash dividends for more than 110 years.

Over the past decade, the company has managed to increase dividends at an annualized rate of 4.40%.

This dividend champion managed to grow earnings per share from $2.16 in 2013 to $33.30 in 2022.

The company is expected to earn $3.42/share in 2023.

The stock sells for 21.73 times forward earnings and yields 2.29%.

Peoples Ltd. (PPLL) operates as the holding company for PS Bank that provides various financial services to individuals, small businesses, and corporate customers in Pennsylvania, the United States. 

The company increased quarterly dividends by 3.30% to $0.62/share. The cash dividend represents a 12.81% increase over the cash dividend paid in the third quarter 2022. This is the 11th year of consecutive annual dividend increases for this dividend contender.

The company managed to grow earnings per share from $3.27 in 2013 to $8.97 in 2022.

The stock sells at 7.83 times earnings and has a dividend yield of 3.53%.

United Bancorp, Inc. (UBCP) operates as the bank holding company for Unified Bank that provides commercial and retail banking services in Ohio. 

The company increased quarterly dividends by 1.50% to $0.1675/share. This payment is also 6.3%  over the regular cash dividend paid in the third quarter of the previous year. That's the tenth consecutive annual dividend increase for this newly minted dividend achiever.

Over the past decade, the company has managed to increase dividends at an annualized rate of 11.20%.

The company managed to grow earnings per share from $0.53 in 2013 to $1.51 in 2022.

The company is expected to earn $1.44/share in 2023.

The stock sells for 8.29 times forward earnings and yields 5.40%

Relevant Articles:

- Seven Dividend Growth Stocks Rewarding Shareholders With Raises

- Four Dividend Growth Stocks Rewarding Shareholders With Raises Last Week

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics, as defined by Investopedia.

Opportunity costs can be easily overlooked if one is not careful, since they are not visible by definition. Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.

Each decision we make as investors, carries an opportunity cost with it.

For example, if I invest in a portfolio of dividend aristocrats, my opportunity cost could be another investment within my opportunity set. For example, if my next door neighbor is Warren Buffett, I may have done better investing in his investment partnership or Berkshire Hathaway.

Even the Oracle of Omaha is subject to the same economic guidelines like us, ordinary investors. Every decision he makes carries with it an opportunity cost, which is the opportunity foregone by choosing one investment over another.

For example, back in February 1958, he bought a house for $31,500. His family was expanding, and his wife was about to give birth to their third child. 

As we discussed in a previous article on Buffett's earlier days, Buffett had rented a house on 5202 Underwood street in Omaha between 1955 and 1958 at a cost of $175/month. 

Today, this house is worth approximately $850,000 and has an estimated rent of $5,800/month according to Zillow.

It is fascinating to read his opinion on housing from that time:

In Omaha, I rented a house at 5202 Underwood for $175 a month. I told my wife, “I’d be glad to buy a house, but that’s like a carpenter selling his toolkit.” I didn’t want to use up my capital.

Buffett had started his investment partnership in 1956, and was on his way to becoming one of the best investors in the world. 

A dollar invested in his partnership at the end of 1957, and then reinvested into Berkshire in 1970 would have turned into $323,250 through August 2023.

However, he and his wife decided to buy a house and closed at the beginning of 1958, according to this article: “Sam Reynolds Home Sold to Warren Buffett's,” Omaha World-Herald, February 9, 1958.

Using returns from Buffett Partnership LTD between 1957 - 1970 and Berkshire Hathaway between 1970 to 2020, I was able to calculate the opportunity cost of owning his home, versus staying invested.

I calculated that if he had simply invested that $31,500 in early 1958, he would have managed to turn it into $10,180,000,000. That's 10 Billion and 180 Million. Check my calculations from this spreadsheet.

That's over ten billion dollars. That's a steep opportunity cost.

It was truly possible because Buffett managed to compound money at a high rate of return for a long period of time. 

For a normal person investing in something like S&P 500, the opportunity cost of buying a house would have been something close to $20 million.

What makes it worse is that he paid cash for the house, rather than taking a mortgage. He put about 10% of his net worth in the house, according to a 1998 Berkshire Hathaway meeting video.

By the way, Buffett has calculated the concept of opportunity cost of every dollar he spends since an early age. Few people think this way.

From the earliest age, Mr. Buffett has understood that building wealth depends not only on how much your money grows, but also on how long it grows.

He read a book that showed how a dollar compounding at a steady 10%/year can turn into $10.80 in 25 years and $117.40 in 50 years.

As a result, Warren began to think about time in a different way. Compounding married the present to the future. If a dollar today was going to be worth 10 some years from now, then in his mind the two were the same.

“Do I really want to spend $300,000 for this haircut?” was his attitude. If Susie wanted to spend some trifling sum of money, he would say, “I’m not sure I want to blow $500,000 that way.”48 But since Susie wanted to spend money that he wanted to withhold, and since he wanted Susie to be happy and she wanted to please him, their personalities were gradually meshing into a system of bargaining and trades.

In other words, he knew that each dollar he spends today could turn into $10 or $100 or $1000 in the future. That was helpful for him in evaluating trade-offs. While there is opportunity costs to various activities, if they made his wife happy, he had to do them. I am pretty sure that he would gladly accept the daily cost of six cherry cokes over the past 70 years, over having to drink water for example.

This shouldn't really be news for Dividend Growth Investors, who understand that with compounding, the largest results are visible at the end of your journey, after a long time of compounding.

A few weeks after buying the house however, Buffett called it "Buffett's Folly" in a letter to a friend, as discussed in " The Snowball":

With momentum behind him, Warren realized it was time to leave a house where there was barely room for a family with two young children—one an unusually energetic three-and-a-half-year-old—and a third on the way. The Buffett's bought their first house. It stood on Farnam Street, a Dutch Cape set back on a large corner lot overlooked by evergreens, next to one of Omaha’s busiest thoroughfares. While the largest house on the block, it had an unpretentious and charming air, with dormers set into the sloping shingled roof and an eyebrow window. Warren paid $31,500 to Sam Reynolds, a local businessman, and promptly named it “Buffett’s Folly.” 

In his mind $31,500 was a million dollars after compounding for a dozen years or so, because he could invest it at such an impressive rate of return. Thus, he felt as though he were spending an outrageous million dollars on the house.

After reading this article, and seeing the calculation behind the $10.10 billion opportunity cost for Buffett's purchase of a house in 1958 for $31,500, you may actually wonder whether I have included the whole picture in the calculation.

After all, once you buy a house, you get to live in it, without paying rent.

I didn't include the amount of rent in the calculation of the opportunity cost. That's because I didn't know what the rent would have been for his house over the past 65 years.

While it is hard to quantify the amount of money you could have saved on rent for 65 years by buying a house, it is even harder to quantify the amount of taxes, renovations, upkeep etc when you buy.  For example, upgrading the house, changing roofs, and landscaping, fixing things around the house cost time and money. If you outsource this task to a handyman, this will cost money too, and eat into some of the savings that you generate by owning a house free and clear. Since I didn't want to make too many estimates, I didn't even try.

(Ok, I did calculate investing that $31,500 at Buffett's rates of return, then subtracting rent using $200/month that increases at CPI +2% for 65 years. It turns out to $7.13 Billion. When you add the $15,000 spent on renovations too, the total comes out to almost $12 Billion. Source)

However, I am pretty confident that Buffett's family spent more in upkeep on this house than the amount they would have saved on rent. That's because immediately after buying the house for $31,500, Buffett's wife Susan spent $15,000 on renovations. This was half the cost of the house!

Even illness and the demands of caring for a new baby and two small children could not suppress her urge to decorate. As it sprang to life, she redid the house in cheery contemporary style, with chrome-and-leather furniture and huge, bright modern paintings covering the white walls. The $15,000 decorating bill totaled almost half of what the house itself had cost, which “just about killed Warren,” according to Bob Billig, a golfing pal.47 He didn’t notice colors or respond to visual aesthetics and so was indifferent to the result, seeing only the outrageous bill.

In Buffett's case, he is not as frugal as everyone makes him out to be. He spent $12,000/year in the 1950s in Omaha.  That's equivalent to a little over $134,000 today. Still, spending $15,000 on a renovation would have likely sunk his budget dramatically, given his annual level of spending. 

If we wanted to calculate the opportunity cost of spending $31,500 on a house in early 1958, coupled with spending $15,000 on renovations in 1958, I see a total opportunity cost of $13.60 billion by August 2023.

According to public property records, there was a remodeling done in 1989. I am not versed in residential tax assessor language, but it looks like the tax assessment shows close to $800,000 in improvements. 

Just for reference, each dollar from 1956 has the same purchasing power as $11.20/ today. A dollar from 1958 has the same purchasing power as $10.52 today.

So in other words, that $31,500 house in 1958 costs $331.400 in today's dollars. According to Zillow, his house costs about $1,332,000 today and would rent for $8,664/month. The annual property tax bill is at a little over $21,400. Still, this is lower than the $10 billion he would have had, if he rented instead, and invested the money.

This post will trigger a lot of people. That's because owning a home is a sacred tradition, which people are expected to hold on to, and teach the new generations about. Few people think about the opportunity cost of actions they partake, through a rational lens, without taking any emotions but focusing on the cold, hard, mathematical facts. We are human after all.

But that's what makes Warren Buffett.. well.. Warren Buffett.

That being said, if you want to improve on your decision making, and become the best version of yourself, it may be helpful to incorporate the concept of opportunity cost in your toolbelt. 

Thank you for reading!

Relevant Articles:

- Warren Buffett: America's Youngest Early Retiree

- Understanding Compounding and Getting Rich Late in Life

I obtained the list of Dividend Aristocrats for 2013 and created a test. There were 54 companies on the dividend aristocrats list as of the end of 2012. This is a list that was available for investors to use a little over 10 years ago. You can view the original list below:

I have included the company name and. symbol The P/E ratio, dividend yield, and 5 and 10 year annualized dividend growth are as of 12/31/2012. That's how they appeared at the time to investors.

To make the test, I assumed that a portfolio was equally weighted at the start. I then proceeded to trace how each company did between December 31, 2012 and July 31, 2023.

This presented some challenges, as some companies were acquired, and therefore the listing stopped being active. The companies acquired include Bemis, C.R. Bard, Family Dollar, Sigma-Aldrich. When they were acquired, I assumed that the money is invested in a portfolio of Dividend Aristocrats. I used the Dividend Aristocrats ETF as a proxy for this action, investing in it on the date stock for delisted.

There were three companies that cut dividends - AT&T, V.F. Corp and HCP Inc (now HealthPeak). In my investing strategy, I sell after a dividend cut. For the purposes of this exercise, I assumed that the investor kept holding on to those companies. This is mostly to reduce excess calculations on my part. You will notice that the dividend cutters were the worst performers of the group.

Abbott was split into two companies at the very end of 2012 - Abbott and AbbVie. The data shows information on legacy Abbott, include the P/E, dividend growth, etc. Both Abbott and AbbVie were determined to be dividend aristocrats. Even if they weren't, passive investors would have held on to both.

With that being said, you can see the total returns performance for each company since then:

Note: Results for period 12/31/2012 - 07/31/2023

The best performers are surprising, because they are companies that few Dividend Growth Investors tend to talk about today. SPGI was attractively valued about 10 years ago, and we bought it when it was still called McGraw Hill. But the most discussed companies have average returns over the past decade. 

This definitely reinforces my idea that we don't really know what our best ideas are in advance, despite what we convince ourselves. Hence, it makes sense to diversify widely, and avoid concentrating at the start. 

This is also a testament to the idea of cutting your losses, and letting your profits run. If an investor had sold Cintas and SPGI Global early, they would not have generated above-average the capital gains and dividend growth that these companies delivered. Their returns would have suffered. These companies delivered a majority of total returns, and those returns paid for so many losers and dividend cutters and eliminators.

Selling them would have been a mistake. This mistake would have been further compounded if the investor had added to the losers instead. 

We don't really know what our best ideas are in advance. In addition, we do not really know if the valuation today is cheap or expensive as well. 

The best idea is to equal weight from the start, turn the drip on, and then let the companies do their thing without too much turnover. Turnover is costly in terms of paying capital gains in taxable accounts and potentially a steep opportunity costs.

You can view that investing $100 in each company would have cost $5,400. That investment would be worth $19,688 by July 31, 2023.

Thank you for reading. This analysis basically reinforces a few points I’ve tried to focus on for a while:

1. Keep losses manageable, but let profits run
2. It’s hard to know who the best performer is going to be.
3. Owning quality in a diverse basket would likely result in good results over time
4. Focus on the long run
5. Maintain diversification
6. Avoid concentration at the start
7. Let portfolio concentrate on its own
8. Selling is usually a mistake
9. Your best ideas would propel portfolio forward, and pay for the worst ideas
10. Valuation is tricky

I review the list of dividend increases each week as part of my monitoring process. This exercise helps review existing holdings, and potentially identify companies for further research. Reviewing dividend increases is a good way to keep track of the pulse of Dividend Growth Investing universe.

I focus on consistent dividend growth companies. Therefore, I typically focus my attention on companies that have managed to raise dividends for at least ten years in a row. The companies listed below have managed to increase dividends for at least a decade and announced a dividend increase last week.

I looked at the dividend increase, in relation to historical dividend growth rates. That provides helpful information about the business prospects, and management's assessment of those prospects.

I also like to look at growth in earnings per share over the same period of time, in order to determine if dividend growth is on solid footing. Rising earnings per share provide the fuel behind future dividend increases.

Last but not least, I look at valuation metrics, such as P/E ratio, Dividend Yield in conjunction with growth in dividends and growth in earnings per share. Even the best company in the world is not worth overpaying for. However, valuation is tricky. 

A company with a low P/E may turn out to be more expensive in the long run if those earnings per share are cyclical or in a terminal decline.

A company with a high P/E may turn out to be cheap in the long run if those earnings per share grow and they are counter-cyclical.

Long story short, valuation is not a one sized trick pony. I have an article scheduled on this topic over the next week.

The companies that announced dividend increases last week, AND also had at least a ten year streak of annual dividend increases include:

Badger Meter, Inc. (BMI) manufactures and markets flow measurement, quality, control, and communication solutions in the United States, Asia, Canada, Europe, Mexico, the Middle East, and internationally. 

The company increased quarterly dividends by 20% to $0.27/share. This is the 31st year of consecutive annual dividend increases for this dividend champion.

Badger Meter has managed to increase dividends at an annualized rate of 9.90% over the past decade.

The company managed to grow earnings from $0.86/share in 2013 to $2.28/share in 2022.

The company is expected to earn $3.01/share in 2023.

The stock yields 0.65% and sells for 52.94 times forward earnings. It's pricey today, but may be worth a researching if it drops to a more reasonable valuation.

Cboe Global Markets, Inc. (CBOE) operates as an options exchange worldwide. It operates through six segments: Options, North American Equities, Europe and Asia Pacific, Futures, Global FX, and Digital.

The company increased quarterly dividends by 10% to $0.55/share. This is the 13th consecutive year Cboe has increased its dividend.

Cboe Global Markets has managed to increase dividends at an annualized rate of 13.80% over the past decade.

The company managed to grow earnings from $1.99/share in 2013 to $2.20/share in 2022.

This dividend achiever sells for 20.60 times forward earnings and yields 1.46%.

Dillard's, Inc. (DDS) operates retail department stores in the southeastern, southwestern, and midwestern areas of the United States.

The company hiked quarterly dividends by 25% to $0.25/share. This is the 13th year of consecutive annual dividend increases for this dividend achiever.

Dillard's has managed to increase dividends at an annualized rate of 14.90% over the past decade.

The company managed to grow earnings from $7.10/share in 2013 to $50.81/share in 2022.

The company is expected to earn $41.83/share in 2023.

The stock sells for 8.13 times forward earnings and yields 0.30%.

  Berkshire Hathaway is the holding company of super-investor Warren Buffett. He transformed a struggling textile mill into a conglomerate with a significant portfolio of equites and significant interests in railroads, insurance, utilities, industrials etc.

Because of the size of his equity portfolio investments, Berkshire Hathaway has to report its US equity holdings every quarter to the SEC. Some foreign investments are also reported to the corresponding Foreign securities regulator.

You can find the updated portfolio holdings for Berkshire Hathaway (BRK.A)(BRK.B) as of June 30, 2023

Name	Symbol	Shares	Ownership Percentage	Market Price	Market Value	Percentage of portfolio
Apple Inc	AAPL	915,560,382	5.90%	$177.87	$162,850,725,146	45.80%
Bank of America Corp	BAC	1,032,852,006	13.00%	$30.02	$31,006,217,220	8.70%
American Express Company	AXP	151,610,700	20.60%	$162.03	$24,565,481,721	6.90%
Coca-Cola Co	KO	400,000,000	9.20%	$60.63	$24,252,000,000	6.80%
Chevron Corporation	CVX	123,120,120	6.50%	$160.09	$19,710,300,011	5.50%
Occidental Petroleum Corp	OXY	224,129,192	25.30%	$63.81	$14,301,683,742	4.00%
Kraft Heinz Co	KHC	325,634,818	26.50%	$33.78	$10,999,944,152	3.10%
Moody’s Corp	MCO	24,669,778	13.40%	$333.59	$8,229,591,243	2.30%
Mitsubishi Corp	8058:TYO	119,497,600	8.30%	$49.27	$5,888,000,106	1.70%
Mitsui & Co	8031:TYO	125,022,300	8.10%	$38.36	$4,795,863,204	1.30%
Itochu Corporation	8001:TYO	118,331,800	7.50%	$39.24	$4,643,303,267	1.30%
HP Inc	HPQ	120,952,818	12.30%	$31.87	$3,854,766,310	1.10%
Davita Inc	DVA	36,095,570	39.50%	$104.73	$3,780,289,046	1.10%
BYD Co. Ltd	BYDDF	98,603,142	9.00%	$29.50	$2,908,792,689	0.80%
Verisign, Inc.	VRSN	12,815,613	12.40%	$206.19	$2,642,451,244	0.70%
Citigroup Inc	C	55,244,797	2.90%	$43.39	$2,397,071,742	0.70%
Kroger Co	KR	50,000,000	7.00%	$47.77	$2,388,500,000	0.70%
Marubeni Corp	8002:TYO	141,000,200	8.30%	$16.69	$2,352,653,028	0.70%
Sumitomo Corp	8053:TYO	101,210,400	8.20%	$20.41	$2,066,065,894	0.60%
Visa Inc	V	8,297,460	0.40%	$240.37	$1,994,460,460	0.60%
Charter Communications Inc	CHTR	3,828,941	2.60%	$427.66	$1,637,484,908	0.50%
Mastercard Inc	MA	3,986,648	0.40%	$395.15	$1,575,323,957	0.40%
Amazon.com, Inc.	AMZN	10,551,000	0.10%	$137.89	$1,454,877,390	0.40%
Paramount Global Class B	PARA	93,730,975	15.40%	$15.39	$1,442,519,705	0.40%
Aon PLC	AON	4,335,000	2.10%	$318.52	$1,380,784,200	0.40%
Capital One Financial Corp.	COF	12,471,030	3.30%	$106.98	$1,334,150,789	0.40%
Activision Blizzard Inc	ATVI	14,658,121	1.90%	$91.00	$1,333,889,011	0.40%
Liberty SiriusXM Series C	LSXMK	43,208,291	19.80%	$23.91	$1,033,110,238	0.30%
Snowflake Inc	SNOW	6,125,376	1.90%	$152.50	$934,119,840	0.30%
Nu Holdings Ltd	NU	107,118,784	2.30%	$7.89	$845,167,206	0.20%
Ally Financial Inc	ALLY	29,000,000	9.60%	$27.55	$798,950,000	0.20%
DR Horton Inc	DHI	5,969,714	1.80%	$126.25	$753,676,393	0.20%
General Motors Co	GM	22,000,000	1.60%	$33.40	$734,800,000	0.20%
T-Mobile Us Inc	TMUS	5,242,000	0.40%	$138.94	$728,323,480	0.20%
Markel Group Inc	MKL	471,661	3.60%	$1,492.72	$704,057,808	0.20%
Celanese Corporation	CE	5,358,535	4.90%	$119.73	$641,577,396	0.20%
Liberty Formula One Series C	FWONK	7,722,451	3.70%	$69.97	$540,339,896	0.20%
Floor & Decor Holdings Inc	FND	4,780,000	4.50%	$104.69	$500,418,200	0.10%
Liberty SiriusXM Series A	LSXMA	20,207,680	20.60%	$23.72	$479,326,170	0.10%
Louisiana-Pacific Corp	LPX	7,044,909	9.80%	$62.36	$439,320,525	0.10%
Globe Life Inc	GL	2,515,574	2.60%	$112.90	$284,008,305	0.10%
StoneCo Ltd	STNE	10,695,448	3.40%	$13.33	$142,570,322	0.00%
NVR Inc	NVR	11,112	0.30%	$6,175.00	$68,616,600	0.00%
Johnson & Johnson	JNJ	327,100	0.00%	$174.06	$56,935,026	0.00%
Procter & Gamble Co	PG	315,400	0.00%	$155.34	$48,994,236	0.00%
MONDELEZ INTERNATIONAL INC Common Stock	MDLZ	578,000	0.00%	$72.60	$41,962,800	0.00%
Diageo plc	DEO	227,750	0.00%	$171.40	$39,036,350	0.00%
Liberty Latin America Ltd Class A	LILA	2,630,792	5.90%	$9.30	$24,466,366	0.00%
Lennar Corp	LEN	152,572	0.10%	$125.70	$19,178,300	0.00%
Vanguard 500 Index Fund ETF	VOO	43,000	0.00%	$407.95	$17,541,850	0.00%
SPDR S&P 500 ETF Trust	SPY	39,400	0.00%	$443.99	$17,493,206	0.00%
Jefferies Financial Group Inc	JEF	433,558	0.20%	$34.31	$14,875,375	0.00%
Liberty Latin America Ltd Class C	LILAK	1,284,020	0.80%	$9.22	$11,838,664	0.00%
United Parcel Service, Inc.	UPS	59,400	0.00%	$173.39	$10,299,366	0.00%
Liberty Live Series A	LLYVA	5,051,920	19.70%
Liberty Live Series C	LLYVK	11,132,594	17.50%
TOTAL					$355,718,194,104	100.00%

You can see that Apple (AAPL) accounts for over 45% of the equity portfolio as of June 30, 2023. This position has generated over $100 billion in profits for Buffett's Berkshire Hathaway.

Buffett has managed to accumulate the position between 2016 and 2018 at a total cost of approximately $36 billion. He did sell about $11 billion worth of Apple stock in 2020. In addition, Apple sends $820 million in dividends each year to Berkshire Hathaway.

He did make large investments in Apple, Bank of America, Coca-Cola, American Express and Kraft Heinz. His portfolio is concentrated mostly as a result of letting winners run, and not selling prematurely. 

You can view the dividend contribution from each of his portfolio holdings from the table below. Berkshire Hathaway is generating almost $5.50 billion in annual dividend income from his portfolio.

Note this doesn't include dividends received from privately owned businesses such as See's Candies or Burlington Northern Santa Fe. Nor does it include $760 Million in annual dividends from Berkshire Hathaway's investment in Occidental Petroleum Preferred stock.

Name	Symbol	Shares	Market Value	Dividend Income
Bank of America Corp	BAC	1,032,852,006	$31,006,217,220	$      991,537,925.76
Apple Inc	AAPL	915,560,382	$162,850,725,146	$      878,937,966.72
Chevron Corporation	CVX	123,120,120	$19,710,300,011	$      743,645,524.80
Coca-Cola Co	KO	400,000,000	$24,252,000,000	$      736,000,000.00
Kraft Heinz Co	KHC	325,634,818	$10,999,944,152	$      521,015,708.80
American Express Company	AXP	151,610,700	$24,565,481,721	$      363,865,680.00
Mitsubishi Corp	8058:TYO	119,497,600	$5,888,000,106	$      164,224,008.80
Occidental Petroleum Corp	OXY	224,129,192	$14,301,683,742	$      161,373,018.24
Itochu Corporation	8001:TYO	118,331,800	$4,643,303,267	$      130,097,491.93
Mitsui & Co	8031:TYO	125,022,300	$4,795,863,204	$      128,862,399.51
HP Inc	HPQ	120,952,818	$3,854,766,310	$      127,000,458.90
Citigroup Inc	C	55,244,797	$2,397,071,742	$      117,118,969.64
Sumitomo Corp	8053:TYO	101,210,400	$2,066,065,894	$        83,455,287.57
Moody’s Corp	MCO	24,669,778	$8,229,591,243	$        75,982,916.24
Marubeni Corp	8002:TYO	141,000,200	$2,352,653,028	$        75,572,154.20
Kroger Co	KR	50,000,000	$2,388,500,000	$        58,000,000.00
Ally Financial Inc	ALLY	29,000,000	$798,950,000	$        34,800,000.00
Capital One Financial Corp.	COF	12,471,030	$1,334,150,789	$        29,930,472.00
Paramount Global Class B	PARA	93,730,975	$1,442,519,705	$        18,746,195.00
BYD Co. Ltd	BYDDF	98,603,142	$2,908,792,689	$        15,776,502.72
Celanese Corporation	CE	5,358,535	$641,577,396	$        15,003,898.00
Visa Inc	V	8,297,460	$1,994,460,460	$        14,935,428.00
Activision Blizzard Inc	ATVI	14,658,121	$1,333,889,011	$        14,511,539.79
Aon PLC	AON	4,335,000	$1,380,784,200	$        10,664,100.00
Mastercard Inc	MA	3,986,648	$1,575,323,957	$           9,089,557.44
Louisiana-Pacific Corp	LPX	7,044,909	$439,320,525	$           6,763,112.64
DR Horton Inc	DHI	5,969,714	$753,676,393	$           5,969,714.00
Globe Life Inc	GL	2,515,574	$284,008,305	$           2,264,016.60
Johnson & Johnson	JNJ	327,100	$56,935,026	$           1,556,996.00
Procter & Gamble Co	PG	315,400	$48,994,236	$           1,186,787.12
MONDELEZ INTERNATIONAL INC Common Stock	MDLZ	578,000	$41,962,800	$              982,600.00
Diageo plc	DEO	227,750	$39,036,350	$              829,010.00
Jefferies Financial Group Inc	JEF	433,558	$14,875,375	$              520,269.60
United Parcel Service, Inc.	UPS	59,400	$10,299,366	$              384,912.00
Vanguard 500 Index Fund ETF	VOO	43,000	$17,541,850	$              266,600.00
SPDR S&P 500 ETF Trust	SPY	39,400	$17,493,206	$              256,888.00
Lennar Corp	LEN	152,572	$19,178,300	$              228,858.00
Davita Inc	DVA	36,095,570	$3,780,289,046	$                                -
Verisign, Inc.	VRSN	12,815,613	$2,642,451,244	$                                -
Charter Communications Inc	CHTR	3,828,941	$1,637,484,908	$                                -
Amazon.com, Inc.	AMZN	10,551,000	$1,454,877,390	$                                -
Liberty SiriusXM Series C	LSXMK	43,208,291	$1,033,110,238	$                                -
Snowflake Inc	SNOW	6,125,376	$934,119,840	$                                -
Nu Holdings Ltd	NU	107,118,784	$845,167,206	$                                -
General Motors Co	GM	22,000,000	$734,800,000	$                                -
T-Mobile Us Inc	TMUS	5,242,000	$728,323,480	$                                -
Markel Group Inc	MKL	471,661	$704,057,808	$                                -
Liberty Formula One Series C	FWONK	7,722,451	$540,339,896	$                                -
Floor & Decor Holdings Inc	FND	4,780,000	$500,418,200	$                                -
Liberty SiriusXM Series A	LSXMA	20,207,680	$479,326,170	$                                -
StoneCo Ltd	STNE	10,695,448	$142,570,322	$                                -
NVR Inc	NVR	11,112	$68,616,600	$                                -
Liberty Latin America Ltd Class A	LILA	2,630,792	$24,466,366	$                                -
Liberty Latin America Ltd Class C	LILAK	1,284,020	$11,838,664	$                                -
Liberty Live Series A	LLYVA	5,051,920		$                                -
Liberty Live Series C	LLYVK	11,132,594		$                                -
TOTAL			$355,718,194,104	$  5,541,356,968.00

The total portfolio value was roughly $355 Billion dollars as of last night. It is on track to generate $5.54 Billion in annual dividend income. Approximately $339 Billion of value is related to dividend paying stocks. Only $16 Billion out of the whole $355 Billion is invested in non-dividend paying companies.

For the quarter ended on June 30, 2023, Warren Buffett and his lieutenants Todd and Ted added to the following existing positions:

Buffett seems to be a big fan of Oil and Gas companies as of recently, with his large investments in Occidental Petroleum. He also seems to be investing in financials such as Capital One Financial. The investments in homebuilders were likely from one of his top lieutenants Todd Combes or Ted Weschler.

They reduced ownership in the following companies:

Looks like he sold out of a lot of companies that Dividend Growth Investors own. For example  Chevron, McKesson and Marsh & McLennan. 

I review the list of dividend increases as part of my monitoring process. I use this exercise to review existing holdings, and also to potentially identify companies for further research.

The dividend increase provides helpful information about the business from management's point of view. That's because management teams determine the rate of the increase after evaluating the business needs, the economic environment and the business competitive landscape. In a way, a dividend increase is a very good gauge of management expectations for how the business will perform in the near term.

For example, if a business starts growing dividends at a slower pace than usual, or it starts growing dividends at a nominal pace, that's a potential warning sign for further investigation. It doesn't mean that the business cannot recover soon; it merely shows that something is going on to cause this deceleration. 

It's helpful to review dividend increases relative to past dividend increases. It's also helpful to do that relative to the payout ratio and the trend in the payout ratio over the past decade. Last but not least, you need to review the rate of dividend growth to the trend in earnings per share as well.

I am not the only one who thinks this way and appreciates the signaling that dividend increase announcements present. Nick Train, who is the portfolio manager behind Lindsell Train shares these sentiments as well (source):

There is the noise accompanying the results from public companies, with analysts and investors poring over the numbers and CEO statements looking for an interpretative edge. Cutting through that noise, I sometimes think it is easiest to simply look at the dividend announcement by the company. To us the increase, maintain or cut decision taken by a board of directors about its current dividend captures an enormous amount of information about mid-term prospects. Below I note the six dividend announcements from our reporting companies – in order of position size in the Portfolio.

Over the past week, there were several companies that managed to increase dividends, AND also having at least a ten year track record of annual dividend increases. The companies include:

Broadridge Financial Solutions, Inc. (BR) provides investor communications and technology-driven solutions for the financial services industry. 

The company increased quarterly dividends by 10.30% to $0.80/share. Broadridge has increased its dividend every year since becoming a public company in 2007. Over the past decade, the company managed to boost dividends at an annualized rate of 14.90%. That's consistent with the 5 year average of 14.30%.

This dividend achiever managed to grow earnings from $2.20/share in 2014 to $5.36/share in 2023. The company is expected to generate $7.62/share in 2023.

The stock sells for 23.87 times forward earnings and yields 1.75%.

Cogent Communications Holdings, Inc., (CCOI) provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Asia, South America, Australia, and Africa. 

The company increased quarterly dividends by 1.10% to $0.945/share. This is the 11th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, the company managed to boost dividends at an annualized rate of 32.70%. The five year average is 14.60%.

The company's earnings went from $1.22/share in 2013 to $0.11/share in 2022. The company is expected to generate $22.11/share in 2023. FCF/share increased from $0.71 in 2013 to $2.02 in 2022.

For some reason the stock sells for 246 times forward earnings and yields 6.48%. I do not understand this company and its financials, just reporting for the sake of consistency of this report.

J&J Snack Foods Corp. (JJSF) manufactures, markets, and distributes nutritional snack foods and beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. It operates through three segments: Food Service, Retail Supermarkets, and Frozen Beverages.

The company increased quarterly dividends by 5% to $0.735/share. This is the 18th year of consecutive annual dividend increases for this dividend achiever. Annualized dividend growth has been declining, from 17.50% over the past decade to 9.10% over the past 5 years.

The company's earnings went from $3.43/share in 2013to $2.47/share in 2022. The company is expected to generate $4.48/share in 2023.

The stock sells for 38 times forward earnings and yields 1.72%.

Nordson Corporation (NDSN) engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. It operates through three segments: Industrial Precision Solutions (IPS); Medical and Fluid Solutions; and Advanced Technology Solutions (ATS).

The company increased quarterly dividends by 4.60% to $0.68/share. This increase represents Nordson’s 60th consecutive year of annual dividend increases. It's also a pretty small increase relative to the annualized rate of 15.30% over the past decade or the 13.80% increase over the past five years.

This dividend king managed to grow earnings from $3.45/share in 2013 to $8.92/share in 2022. The company is expected to generate $9.06/share in 2023.

The stock sells for 26.80 times forward earnings and yields 1.12%.

Relevant Articles:

- Seven Dividend Growth Stocks Rewarding Shareholders with Raises

As part of my monitoring process, I review the list of dividend increases every week. This exercise helps me monitor existing investments and potentially identify hidden gems for further research.

There were 29 companies that increased dividends last week. I narrowed the list down by focusing on companies that have managed to increase distributions for at least a decade.

I included all the information that would help me determine if they are worthy of further research. In general, I look for companies with a dividend growth that exceeds inflation. I review the recent dividend increase to the average over the past decade. I also find it helpful to review if management says anything about the dividend increase.

I also look for rising earnings per share over the past decade, which is the fuel behind future dividend increases. I also look for companies where earnings can continue growing in the future.

While not calculated here, I also review the dividend payout ratio, in conjunction with earnings and dividend growth. I want companies that can continue to grow dividends during the ups and downs of the economic cycle.

Last but not least, I also look at valuation. Even the best company in the world is worth buying at any price. The downside of course is that valuation is very subjective and dependent on assumptions that may turn out to be either overly optimistic or overly pessimistic. In general, I look at earnings and dividends growth, along with P/E ratios to evaluate if I want to own a stock or not. I also look at things like interest rates, and other ideas available at the time.

I came up with this list of nine companies raising dividends last week.

American States Water Company (AWR) provides water and electric services to residential, commercial, industrial, and other customers in the United States. It operates through three segments: Water, Electric, and Contracted Services. 

The company increased quarterly dividends by 8.20% to $0.43/share. This dividend king has increased dividends for 69 consecutive years. Over the past decade, it has managed to grow dividends at an annualized rate of 9.20%.

“This significant dividend increase reflects American States Water’s strength and our Board’s confidence in the company’s ability to achieve long-term, sustainable earnings growth,” said Robert J. Sprowls, President and CEO of American States Water Company. “A growing dividend allows the company to attract capital for investments in its infrastructure that enable us to provide safe and reliable services to our customers.”

Between 2013 and 2022, the company grew earnings from $1.61/share to $2.12/share.

The company is expected to earn $2.90/share in 2023.

The stock is selling for 29.66 times forward earnings and yields 2%.

Carlisle Companies Incorporated (CSL) operates as a manufacturer of engineered products in the United States, Europe, Asia, Mexico, the United Kingdom, and internationally. It operates through four segments: Carlisle Construction Materials, Carlisle Weatherproofing Technologies, Carlisle Interconnect Technologies, and Carlisle Fluid Technologies.

The company increased quarterly dividends by 13.30% to $0.85/share. This is the 47th consecutive annual dividend increase for this dividend champion. Over the past decade, it has managed to grow dividends at an annualized rate of 13%.

Chris Koch, Chair, President and Chief Executive Officer, said, “This increase in our dividend is Carlisle’s 47th consecutive annual increase and demonstrates Carlisle’s solid financial position, favorable growth prospects and commitment to returning capital to our shareholders as part of our superior capital allocation strategies.”

Between 2013 and 2022, the company grew earnings from $3.29/share to $17.80/share.

The company is expected to earn $17.53/share in 2023.

The stock sells for 16.20 times forward earnings and yields 1.20%.

Chemed Corporation (CHE) provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers primarily in the United States. The company operates in two segments, VITAS and Roto-Rooter. 

The company hiked quarterly dividends by 5.30% to $0.40/share. That's the 15th consecutive year of annual dividend increases for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 8.10%.

Between 2013 and 2022, the company grew earnings from $4.24/share to $16.72/share.

The company is expected to earn $19.98/share in 2023.

The stock sells for 25.74 times forward earnings and yields 0.31%.

Essential Utilities, Inc. (WTRG) operates regulated utilities that provide water, wastewater, or natural gas services in the United States. The company operates through Regulated Water and Regulated Natural Gas segments. 

The company increased quarterly dividends by 7% to $0.3071/share. This is the 31st consecutive annual dividend increase for this dividend champion. Over the past decade, it has managed to grow dividends at an annualized rate of 7.60%.

“The Board’s decision to increase the quarterly dividend adds to our continued record of delivering shareholder value. The long history of consecutive quarterly cash dividends is indicative of the company’s commitment to yielding strong results while providing safe and reliable services to our customers,” said Essential Chairman and Chief Executive Officer Christopher Franklin.

Between 2013 and 2022, the company grew earnings from $4.24/share to $16.72/share.

The company is expected to earn $1.86/share in 2023.

The stock sells for 21.82 times forward earnings and yields 3%.

Federal Realty (FRT) is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. 

The company increased quarterly dividends by 0.90% to $1.09/share. This increase represents the 56th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector. Over the past decade, it has managed to grow dividends at an annualized rate of 4.40%.

Federal Realty managed to grow FFO/share between 2013 and 2023 from $4.41 to $6.32.

This dividend king is expected to generate $6.50/share in FFO in 2023.

The stock sells for 15.90 times forward FFO and yields 4.20%.

Hawkins, Inc. (HWKN) operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. 

The company increased quarterly dividends by 6.70% to $0.16/share. This is the 19th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 5.40%.

The company managed to grow earnings from $0.86/share in 2013 to $2.88/share in 2022.

Hawkins is expected to earn $2.57/share in 2023.

The stock sells for 19.16 times forward earnings and yields 1.30%.

Illinois Tool Works Inc. (ITW) manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products.

The company raised quarterly dividends by 6.90% to $1.40/share. This is the 52nd consecutive annual dividend increase for this dividend king. Over the past decade, it has managed to grow dividends at an annualized rate of 13%.

Between 2013 and 2022, the company grew earnings from $3.76/share to $9.80/share.

The company is expected to earn $9.74/share in 2023.

The stock sells for 25.33 times forward earnings and yields 2.27%.

Service Corporation International (SCI) provides deathcare products and services in the United States and Canada. The company operates through Funeral and Cemetery segments.

The company increased quarterly dividends by 7.40% to $0.29/share. This is the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 16.60%.

Between 2013 and 2022, the company grew earnings from $0.70/share to $3.58/share.

The company is expected to earn $3.47/share in 2023.

The stock sells for 18.81 times forward earnings and yields 1.77%.

Terreno Realty Corporation (TRNO) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. 

The company increased quarterly dividends by 12.50% to $0.45/share. This is the 12th consecutive annual dividend increase for this dividend achiever. Over the past decade, it has managed to grow dividends at an annualized rate of 12.40%.

The REIT grew FFO from $0.60/share in 2013 to $2/share in 2022. It is expecting to generate $2.17/share in FFO in 2023.

The stock sells for 27.39 times forward FFO and yields 3%.

Relevant Articles:

- Seven Dividend Growth Stocks Rewarding Shareholders with Raises

A lot of times the best investment ideas are right under our noses. As individual investors and everyday consumers, we have an edge over Wall Street, because we can spot emerging products and services and get a feel for them early in the game. Other times, we may see products that seem to be dull or mundane, but enjoy a steady stream of recurring loyal customer purchases that grows over time.

In my experience, I have encountered an interesting phenomenon. Namely, that when I see company whose products or services are loved by customers, it is usually a good idea for further research. Now this may not always be a dividend growth company, but the principle still stands. 

It makes intuitive sense why a company whose products or services are loved by customers would be a good investment idea at the right price. If customers love that product, then you have an intangible moat around, especially if it is one of a kind.

On the other hand, you should not throw all common sense out of the window either. You still need to review the financials, make sure that the business is on solid footing, and make sure you are not massively overpaying for future growth.

Examples of companies I’ve observed where people love the product is chocolate or alcohol.

People love Lindt, they love Hershey (HSY), or Cadbury (MDLZ) or Lindt. They may also love Doritos (PEP).

People love Johnnie Walker Whiskey or Jack Daniels or Jim Beam or Heineken. They may love Coca-Cola (KO) or Pepsi (PEP) or some energy drink like Monster (MNST)

People love Apple (AAPL) products and wait in lines for a new phone release.

Some people love shopping at certain types of stores like T.J. Maxx (TJX), Target (TGT) or even Home Depot (HD) or Dollar General (DG). Costco (COST) members love shopping there.

Others love Chipotle (CMG), or Buffalo Wild Wings, Taco Bell (YUM) or McDonald’s (MCD).

Even during the pandemic and lockdowns, people lined up to buy their Starbucks (SBUX) coffee. This ought to tell us something.

These are just a few examples that came to mind as I was brainstorming. It's good to be on the lookout for good tasting products, which can be added to your list for future research. This is one of the methods I use to come up with investing ideas.

British fund manager Nick Train has a saying that if a company’s product tastes good, you should buy it:

The performance over the years of the holdings in AG Barr, Diageo, Heineken, Mondelez, Remy Cointreau and Unilever confirm the validity of this simple but powerful proposition. Indeed, Mondelez’ Oreos, Unilever’s Hellmann’s and Magnum and Remy cognac have all done particularly well during the pandemic (and boosted the shares of their owners) as consumers have turned to home cooking and consoling treats. Accordingly we are always alert to opportunities to add beloved or trusted consumer brands to the portfolio and over the last 18 months have initiated holdings in Fever-Tree, whose products definitely taste good and in PZ Cussons (“PZC”) whose products definitely don’t. Nonetheless, the general principle still holds for PZC. The same affection that drinkers have for Tanqueray, or chocaholics for Cadbury, is shown in the trust and reliance consumers have placed in PZC’s biggest brand, Carex – the UK’s #1 hand sanitizer – with spectacular growth this year.

The team at Ash Park seems to have confirmed that with some of their research. For example, investing in Swiss Chocolate company Lindt & Sprungli would have resulted in some sweet dividends and total returns for its shareholders over the past 50 years:

Relevant Articles:

- How to find companies for my dividend portfolio

- How to get dividend investment ideas

I review the list of dividend increases each week as part of my monitoring process. This exercise helps me check out new companies for further research. It also helps me to monitor existing positions.

There were over 42 companies increasing dividends last week. I narrowed the list down to 16 by only focusing on the companies that have managed to raise dividends for at least ten years in a row. I have found that to be a very helpful requirement that weeds out cyclical companies.

I included the new dividend increase and calculated the rate of change relative to the last one. I also included the track record of consistent annual dividend increases. 

I have also included valuation metrics such as forward P/E ratio, 5 year dividend growth rate and dividend yield. 

You can view the full table below:

- Seven Companies Rewarding Shareholders With a Raise

- Five Dividend Growth Companies Raising Dividends Last Week

- Seven Dividend Growth Stocks Rewarding Shareholders with Raises

- 48 Dividend Champions For Further Research

As part of my research, I ran a screen on the Divided Growth Investor Universe.

I looked for companies, which have:

1) Increased dividends for at least 25 years in a row

2) Consistently managed to increase dividends by at least 5%/year over the past decade

3) Increased earnings per share over the past decade

4) Forward Dividend Payout Ratio below 70%

I came up with a list of 48 Dividend Champions for further research here:

In my opinion, these are great companies for further research. I believe they posses the characteristics to keep growing dividends over the next decade. I also view them as quality companies as well.

However, I believe that investors need to evaluate each company, in order to confirm they are well suited for their portfolios.

In addition, investors need to determine if the valuation is right. Quite often, the best quality companies command a premium. Choosing between companies can only be done if you understand the business, the defensibility of the earnings stream, the growth pattern and combine that with today's valuations metrics such as P/E.

I am mainly posting this list as a starting point for my research, nothing more. I would be monitoring the list, and potentially pouncing on the right opportunity if they appear attractively valued.

The companies include:

The Bank of New York Mellon Corporation (BK) provides a range of financial products and services in the United States and internationally. The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and other segments. 

The company increased quarterly dividends by 13.50% to $0.42/share. This was the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 10.60%.

Between 2013 and 2022 the company managed to grow earnings from $1.74/share to $2.91/share.

The stock sells for 9.27 times forward earnings and has a dividend yield of 3.86%.

Community Bank System, Inc. (CBU) operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. 

The company increased quarterly dividends by 2.30% to $0.45/share. This is the 31st consecutive year in which the Company has increased its annual dividend. Over the past decade, the company has managed to increase dividends at an annualized rate of 5%.

Between 2013 and 2022 this dividend champion managed to grow earnings from $1.96/share to $3.48/share.

The stock sells for 14.69 times forward earnings and has a dividend yield of 3.59%.

PPG Industries, Inc. (PPG) manufactures and distributes paints, coatings, and specialty materials worldwide. The company operates through Performance Coatings and Industrial Coatings. 

The company increased quarterly dividends by 4.80% to $0.65/share. This was the 52nd consecutive annual dividend increase for this dividend king. Over the past decade, the company has managed to increase dividends at an annualized rate of 7.50%.

Between 2013 and 2022 the company managed to grow earnings from $2.97/share to $4.35/share.

The stock sells for 20.30 times forward earnings and has a dividend yield of 1.74%.

Regions Financial Corporation (RF), a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. 

The company increased quarterly dividends by 20% to $0.24/share. This was the 11th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 33.30%. This would not be possible going forward - the only reason for the high rate was that the bank cut dividends severely over the 2008 - 2009 Global Financial Crisis. It's "easier" to get a high rate of return off a very low base.

Between 2013 and 2022 the company managed to grow earnings from $0.76/share to $2.30/share.

The stock sells for 8.26 times forward earnings and has a dividend yield of 4.80%.

State Street Corporation (STT) provides a range of financial products and services to institutional investors worldwide. 

The company increased quarterly dividends by 9.50% to $0.69/share. This was the 13th consecutive annual dividend increase for this dividend achiever. Over the past decade, the company has managed to increase dividends at an annualized rate of 10%.

Between 2013 and 2022 the company managed to grow earnings from $4.52/share to $7.28/share.

The stock sells for 9.60 times forward earnings and has a dividend yield of 3.92%.

Relevant Articles:

- Five Dividend Growth Companies Increasing Distributions to Shareholders

I review the list of dividend increases each week, in an effort to monitor the dividend growth investment universe. This exercise helps me monitoring existing positions but also identify new companies for further research.

I do tend to focus on companies with at least a ten year history of annual dividend increases. This helps me identify companies that have been through at least one full economic cycle. 

Over the past week, there were seven companies which managed to increase dividends and have a ten year track record of annual dividend increases under their belt. The companies include:

Cummins Inc. (CMI) designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and New Power.

The company increased quarterly dividends by 7% to $1.68/share. Cummins has increased the quarterly common stock dividend to shareholders for 14 consecutive years.

Over the past decade, this company has managed to increase dividends at an annualized rate of 12.90%.

The stock sells for 12.67 times forward earnings and yields 2.65%. Check my analysis of Cummins for more information about the company.

Duke Energy Corporation (DUK) operates as an energy company in the United States. It operates through two segments, Electric Utilities and Infrastructure (EU&I) and Gas Utilities and Infrastructure (GU&I).

The company increased quarterly dividends by 2% to $1.025/share. This is the 19th consecutive annual dividend increase for this dividend achiever. Over the past decade, this company has managed to increase dividends at an annualized rate of 2.80%.

The stock sells for 16.57 times forward earnings and has a dividend yield of 4.40%.

Enterprise Products Partners L.P. (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services.

The partnership hiked quarterly distributions by 2% to $0.50/share. This year marks the partnership’s 25th consecutive year of distribution growth for this newly minted dividend champion. Over the past decade, this company has managed to increase distributions at an annualized rate of 4%.

Enterprise Products Partners yields 7.57%.

The J. M. Smucker Company (SJM) manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. 

The company increased quarterly dividends by 3.90% to $1.06/share. This is the 26th consecutive year of annual dividend increases for this dividend champion.

Over the past decade, this company has managed to increase dividends at an annualized rate of 7.20%.

The stock sells for 15.70 times forward earnings and has a dividend yield of 2.86%.

Marsh & McLennan Companies, Inc. (MMC) a professional services company, provides advice and solutions to clients in the areas of risk, strategy, and people worldwide. It operates in two segments, Risk and Insurance Services, and Consulting.

The company increased quarterly dividends by 20.30% to $0.71/share. This is the 17th consecutive annual dividend increase for this dividend achiever. Over the past decade, this company has managed to increase dividends at an annualized rate of 9.60%.

The stock sells for 24.45 times forward earnings and yields 1.52%

National Retail Properties (NNN) invests primarily in high-quality retail properties subject generally to long-term, net leases. As of March 31, 2023, the company owned 3,449 properties in 49 states with a gross leasable area of approximately 35.3 million square feet and with a weighted average remaining lease term of 10.3 years.

The REIT hiked quarterly dividends by 2.70% to $0.565/share. This marks NNN's 34th consecutive annual dividend increase.

Over the past decade, this REIT has managed to increase dividends at an annualized rate of 3.30%.

The stock sells for 13.46 times forward FFO and has a dividend yield of 5.23%.

Ryder System, Inc. (R) operates as a logistics and transportation company worldwide. It operates through three segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS). 

The company increased quarterly dividends by 14.50% to $0.71/share. This is the 19th consecutive annual dividend increase for this dividend achiever. Over the past decade, this company has managed to increase dividends at an annualized rate of 7.20%.

The stock sells for 7.63 times forward earnings and yields 3.31%.

Thank you for reading!

Relevant Articles:

- How to find companies for my dividend portfolio

- Four Companies Increasing Dividends to Shareholders Last Week

One of my favorite Berkshire Hathaway letters to shareholders is the one from 2013. It left a very big impression on me, mostly because it discussed some important lessons on dealing with market fluctuations. The lessons were illustrated by two investments that Buffett had made.

The investments were in a farm in Nebraska and a New York property adjacent to NYU.

He made these investments at what he believed to be a low price. In the case of the farm, Buffett tried to estimate how much agricultural products like soybeans and corn can be produced. He looked at estimated costs, and calculated the effect on future productivity improvements.  While he knew that there will be disappointing years, he did know that over time, things would be ok. As a result he held on to the farm. It cost $280,000 in 1986 and had an yield of about 10%. By 2013, the farm had increased five times in value, and tripled its earnings. In this deal, he seeked the expertise of his son Howard, who is a farmer.

The other property he invested in 1993 was the one close to NYU. It also had an unlevered yield of 10%, When analyzing the deal, Buffett looked for improvements such as replacing tenants that weren’t charged market rents with new ones as well as leasing vacant stores. He partnered with a couple experienced real estate investors, who knew how to manage the property and unlock value.

As a result of a couple of debt refinancing, expiring leases which were signed at higher rates, and better management of operations, annual distributions increased to 35% of the original equity investment. In addition, he also received several special distributions totaling more than 150% of the original investment. Annual distributions being compared to original cost remind me of the Yield on Cost indicator than many dividend growth investors use. 

Buffett used these investments in order to illustrate several fundamentals of investing:

- You don’t need to be an expert in order to achieve satisfactory investment returns

- Focus on the future productivity of the asset you are considering.

- Think only of what the properties would produce and cared not at all about their daily valuations

- If you instead focus on the prospective price change of a contemplated purchase, you are speculating

- Forming macro opinions or listening to the macro or market predictions of others is a waste of time. What the economy, interest rates, or the stock market might do in the years immediately following is of no importance of making those investments.

There was a big difference between investing in businesses and investing in stocks however. Equities offer minute by minute prices. Yet, his farm or real estate do not produce quotes.

Warren Buffett is famous for saying :

 ‘‘After we buy a stock, consequently, we would not be distrurbed if markets closed for a year or two. We don’t need a daily quote on our 100 percent position in See’s to validate our well being. Why, then, should we need a quote on our 7 percent interest in Coke (KO)?’’

Sometimes Mr Market offers a tremendous bargain and sometimes Mr Market offers a ridiculously high price for an asset. Most of the time, it pays to just ignore Mr Market, unless you want to take advantage of this moody fellow.

People who focus too much on stock price fluctuations, end up being influenced by the manic depressive Mr Market. They feel the urge to do something, which leads to many investors selling low and buying high.

Most of these investors would likely do better by sticking to private businesses and real estate, where they do not get a daily quote. This let’s them focus on the business, its fundamentals and ignore all the noise. For many folks, the instant liquidity that the stock market offers is more of a curse, than a blessing. Perhaps these folks would be better off buying and owning a private business. But if they were to invest in equities, they need to see themselves as partial owners of a business enterprise, and not view stocks as some sort of a lottery ticket. Perhaps that’s why Buffett has stated that you should not buy a business, unless you are willing to hold it for a decade, even if they closed the stock market for ten years.

Thinking like a business owner has a lot of advantages. Mostly, it lets you focus on the business, and ignore noise. Second, it helps you stay patient, when everyone around you is panicking. This was evident during the Global Financial Crisis, and was evident during the Covid-19 crash in 2020. Few investors can sit patiently, when their stocks are going down or even going up. 

This is why I try to tell investors to focus on the dividend stream produced by the companies they own, and try to research to see if the payout is adequate and that earnings can grow over time. This lifehack of focusing on the stability of the dividend stream lets the investor avoid being scared away by share price fluctuations. If you are an investor in the accumulation phase, stock price declines should be viewed with excitement, because lower prices mean that future retirement income can be bought on sale. 

If you are a retired investor, you should ignore price fluctuations. Instead, focus on the income from your investments.

Both groups should care about prices only when they have money to invest.

The Interpublic Group of Companies, Inc. (IPG) provides advertising and marketing services worldwide. It operates in three segments: Media, Data & Engagement Solutions, Integrated Advertising & Creativity Led Solutions, and Specialized Communications & Experiential Solutions.

The company initiated a dividend in 2011 and has been increasing it every single year starting in 2013. It has managed to increase dividends at an annualized rate of 10%/year over the past five years.

Interpublic has managed to grow earnings per share from $0.62 in 2013 to $2.40 in 2022. The company is expected to earn $2.93/share in 2023.

The company reduced shares outstanding by about 10% between 2013 and 2018. Since then, the number of shares outstanding have increased slightly.  The stock price was largely flat between 2014 – 2019.

The dividend payout ratio has remained below 60% over the past decade, with the exception of the tumultuous 2020 and the related Covid Shutdowns. It’s impressive to find a company that has managed to grow earnings and dividends, while largely retaining the same payout ratio over time. That’s because it has an asset light model that prints cashflow.

The stock is attractively valued today, selling at 12.86 times forward earnings and yielding 3.30%.