A Dividend Growth Analysis Of The Dividend Champions

In this article I present my first analysis of the Dividend Champions. The Dividend Champions are U.S. stocks that have grown their dividend for 25+ years in a row. This is a fairly select list as only 107 companies have successfully done so. This is out of the over 4,000 companies listed on stock exchanges at the end of 2018. These companies have survived periods of inflation, stock market crashes, global crisis and deep recessions. They may not have grown revenue and earnings per share every year, but they annually raised the dividend without fail for 25 years straight. Note that the Dividend Champion list is broader than the Dividend Aristocrats List. The latter requires membership in the S&P 500 and a minimum market capitalization of $3B. For this reason, it is possible for a company to be a Dividend Champion but not a Dividend Aristocrat.

The highest ranked stock in my model is A.O. Smith (AOS), which only became a Dividend Champion this past year. But several other stocks perform well, and a few are undervalued including Walgreens Boots Alliance (WBA). The analysis also points to several high yielding stocks with low valuations including Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), AT&T (T), Universal Corp. (UVV), and a few others. But the tradeoff is that these stocks tend to have negative or low EPS growth rates, low dividend growth rates and in some cases high payout ratios.

Please read the complete article at Seeking Alpha.

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