In this article I present an analysis of a modified list of the Dividend Champions. I analyze all stocks in the list except the Dividend Kings. I track the Kings separately due to their long-term success in growing dividends. You can read my recent analysis update on the Dividend Kings from mid-January. Most of the Kings are overvalued at the current moment with the possible exception of 3M Company (MMM). I analyzed 3M in a recent article. The top five stocks in my ranking model in order are A.O. Smith (AOS), BancFirst Corp. OK (BANF), Ross Stores Inc (ROST), T. Rowe Price Group (TROW), Walgreens Boots Alliance Inc (WBA). There is one addition to the Dividend Champions List: Canadian National Railway (CNI). I provide a summary analysis of Canadian National Railway, which ranks highly in my model at No. 6.
In these analyses I use nine criteria that permit rapid quantitative screening based on the dividend, earnings growth, dividend growth, dividend safety, and valuation. The nine criteria used in quantitative screening are:
- History of increasing dividends
- Dividend yield
- 5-year EPS growth rate
- 5-year dividend growth rate
- 10-year dividend growth rate
- Payout ratio
- Long-term debt-to-equity ratio (D/E)
- 5-year beta
- P/E Ratio for trailing twelve months
The goal here is to identify stocks for further research not make buy or sell decisions. There are often qualitative factors for each stock that must be researched before making an investment decision. For instance, I also evaluate P/E ratio relative to past 5-years or 10-years and dividend-to-FCF ratio. Other qualitative factors can also include management history, recent M&A activity, and effect of tariffs and trade wars on revenue.
Top 5 Dividend Champions In Each Criteria
The table below lists the stocks in this analysis from the Dividend Champions list in order of consecutive years of paying a growing dividend. These stocks come from a wide range of industries but there are quite a few industrial, chemical, financial, utility, and real estate stocks in the table…
If you would like notifications as to when my new articles are published, please sign up for my free weekly e-mail. You will receive a free spreadsheet of the Dividend Kings.