My retirement strategy is focused on building a dividend portfolio of high quality blue chips, which are reliable dividend payers. For my dividend portfolio, I look for companies which can regularly grow their dividends for years. A long record of dividend increases is an indication of a strong business model that produces reliable earnings, revenues and cash flows.
One of the ways I monitor my dividend portfolio holdings as well as the list of dividend growth stocks is by reviewing the list of dividend increases. I usually try to focus on companies that have raised dividends for at least a decade, when reviewing the rate of recent dividend increases. I did this to come up with the list of dividend increases to review today:
The Clorox Co (NYSE:CLX) manufactures and markets consumer and professional products worldwide. The company operates through four segments: Cleaning, Household, Lifestyle, and International. The company raised its quarterly dividend by 3.90% to 80 cents/share. This dividend champion has been hiking dividends for 39 years in a row. The ten year dividend growth rate is 10.40%/year. The rate of dividend growth has slowed down considerably since 2013. Currently, the stock is overvalued at 26 times earnings and yields 2.50%. At this stage, I would not be adding to my position in Clorox Co (NYSE:CLX). The company seems like a decent hold, where dividends are reinvested elsewhere. It would be more interested on dips below $100/share.
There were 29 hedge funds tracked by Insider Monkey which had positions in Clorox on March 31, owning 4.50% of the company’s shares. Andy Brown’s Cedar Rock Capital had the largest position, amounting to just under 2.57 million shares valued at nearly $324 million.
Leggett & Platt, Inc. (NYSE:LEG), Incorporated designs and produces various engineered components and products worldwide. The company operates through four segments: Residential Furnishings, Commercial Products, Industrial Materials, and Specialized Products. The company raised its quarterly dividend by 6.25% to 34 cents/share. This marked the 45th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 7.30%/year. However, the dividend growth has decelerated to 3.50%/year over the past five years. The stock is selling for 19.50 times earnings and yields 2.80%. I have not taken a deep dive into Leggett & Platt, Inc. (NYSE:LEG), mostly because trends in earnings per share always seemed to be all over the place. Given the 45 year record of regular dividend increases however, I should put on my list for a more detailed analysis.