11 Dividend “Pre-Challengers” Whose Official Promotions are Just Days Away

One of the most gratifying things about compiling the Dividend Champions spreadsheet is witnessing the steady stream of dividend increases, which are announced throughout the year, in wave after wave, by the Champions, Contenders, and Challengers.

(Note that all references to Champions mean companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. “CCC” refers to the universe of Champions, Contenders, and Challengers.)

[ad#Google Adsense 336×280-IA]The companies below now qualify as Dividend Challengers because of their latest increase, but I’m calling them Pre-Challengers simply because 2014 hasn’t quite arrived and their fifth year of higher dividends will be paid in early 2014…so their “official” promotions are just days away.

Many Dividend Growth investors focus on companies that are just beginning their dividend-growth streaks, reasoning that they have more potential for future increases.

Here are the latest companies to declare a fifth year of higher dividends:

MR=Most Recent; DGR=Dividend Growth Rate; *Offers Company-sponsored Dividend Reinvestment/Stock Purchase Plan. Unlike brokerage “DRIPs,” these allow cash investments of as little as $25. A list of No-fee company-sponsored DRIPs can be found here. (a)ADR-Sweden; (b)ADR-Bermuda; (d)Annual Dividend

High Probability Increases?
The repeatability factor for CCC dividend increases is about 90%, which inspires some confidence. Keep in mind, though, that the companies above are just reaching a fifth year of increases, so they haven’t yet established as strong a dividend-increasing “culture” and might be more inclined to cut or freeze the payout during recessions. Additional caution may be advisable for foreign firms that trade as ADRs (American Depository Receipts), which may pay distributions that are not taxed the same as “normal” dividends.
Here’s a list of 18 more companies that are likely to declare the fifth year of increases by the end of February:

Note that Time Warner Cable is currently the subject of takeover efforts, so it may not continue to raise its payout.

— David Fish

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David Fish, Moneypaper

Dave Fish is Executive Editor for the Moneypaper newsletter and co-manager (since 1999) of the MP 63 Fund (Symbol: DRIPX), a Morningstar 4-Star fund that invests exclusively in companies that offer Direct Investment (or Dividend Reinvestment) Plans, or DRIPs. He is also the author of the U.S. Dividend Champions spreadsheet (and PDF), which is updated at the end of each month...and lists companies that have increased their dividend payout for at least 25 consecutive years. (Separate tabs list "Contenders" that have increased their payouts for 10-24 years and "Challengers" that have increased their payouts for 5-9 years.)