During the past week, GuruFocus recognized four companies as dividend growers. In order to be qualified for this list, the company had to:
· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following four companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Verizon Communications (VZ)
On Dec. 6, Verizon Communications declared a dividend of $0.53 per share, representing a 4.20% dividend yield for the company. This dividend is payable on Feb 2 to shareholders of the record at the close of business on Jan. 10, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 2.20%
· 5-year: 3.20%
· 3-year: 2.80%
Verizon Communications is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies with a presence in over 150 countries around the world.
Verizon’s historical revenue and net income:
The analysis on Verizon reports that the company’s price is near a 10-year high, its P/B ratio is sitting near a 1-year low and the company has issued $44.1 billion of debt over the past three years. The company has also reported operating loss over the past year and a declining operating margin over the past five years.
The top guru shareholders of VZ:
1. James Barrow with 22,209,015 shares, representing 0.78% of the company’s shares outstanding.
2. Jim Simons: 5,209,317 shares, representing 0.18% of the company’s shares outstanding.
3. Brian Rogers: 5,007,200 shares, representing 0.17% of the company’s shares outstanding.
The company’s most recent quarterly release reports:
· EPS of $0.78, up from $0.56 per share last year.
· Non-GAAP EPS of $0.77, up 20.3% from last year.
· Cash flow from operations totaled $28.4 billion in the first nine months, up 14.7% from last year.
· Revenues of $30.3 billion, up 4.4% from last year.
The company also released that this past quarter represents the fourth consecutive quarter of year-over-year revenue growth of more than 4%.
The Peter Lynch Chart suggests that the company is currently overvalued:
Verizon Communications has a market cap of $141.6 billion. Its shares are currently trading at around $49.48 with a P/E ratio of 64.90, a P/S ratio of 1.20 and a P/B ratio of 4.10. The company had an annual average earnings growth of 4.00% over the past ten years.
Reynolds American (RAI)
On Dec. 5, Reynolds American declared a dividend of $0.63 per share, representing a 4.80% dividend yield for the company. This dividend is payable on Jan. 2 to shareholders of the record at the close of business on Dec. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 11.10%
· 5-year: 8.90%
· 3-year: 10.50%
Reynolds American, through its subsidiaries, manufactures cigarettes and other tobacco products in the United States. The Company's reportable operating segments are RJR Tobacco, American Snuff and Santa Fe.
Reynolds’ historical revenue and earnings growth:
The analysis on Reynolds reports that the company’s operating margin is expanding, its dividend yield is near a 5-year low and its price, P/B ratio and P/S ratio are all sitting near 10-year highs.
The top guru shareholders:
1. James Barrow: 2,418,402 shares, representing 0.44% of the company’s shares outstanding.
2. David Winters: 2,125,184 shares, representing 0.39% of the company’s shares outstanding.
3. Jim Simons: 1,994,400 shares, representing 0.37% of the company’s shares outstanding.
The company announced that its most recent dividend is the 38th consecutive quarterly cash dividend. It also reports that RAI’s policy is to return about 80% of the company’s current-year net income to the shareholders in the form of dividends.
The Peter Lynch Chart suggests that the company is currently overvalued:
Reynolds American currently has a market cap of $27.56. Its shares are trading at around $50.99 with a P/E ratio of 17.90, a P/S ratio of 3.40 and a P/B ratio of 5.50. The company had an annual average earnings growth of 1.10% over the past five years.
DTE Energy Holding Company (DTE)
On Dec. 5, DTE Energy Holding Company declared a dividend of $0.655 per share, representing a 3.80% dividend yield for the company. This dividend is payable on Jan. 15 to shareholders of the record at the close of business on Dec. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 1.60%
· 5-year: 3.60%
· 3-year: 4.40%
DTE Energy, through its subsidiaries, is engaged in the business of providing electricity and natural gas sales, distribution and storage services throughout southeastern Michigan. Its main operating segments are Electric Utility, Gas Utility, Non-Utility Operations, and Corporate and other.
DTE’s historical revenue and net income:
The analysis on DTE Energy reports that the company’s revenue has been in decline over the past five years, its price is trading near its 10-year high and over the past three years the company has issued $24 million of debt.
Jim Simons, Steven Cohen, Paul Tudor Jones and John Hussman all hold a stake in DTE. The only notable holdings come from Simons who holds on to 855,000 shares of the company’s stock, representing 0.49% of its shares outstanding, and Cohen who maintains 43,274 shares of the stock.
The company’s most recent quarterly release reports:
- Reported earnings of $198 million, or $1.13 per share, down from $227 million, or $1.31 per share.
- Operating earnings were at $198 million, or $1.13 per share, down from $226 million, or $1.30 per share.
- Upped their guidance range to $3.95 to $4.15 per share, up from $3.90 to $4.20 per share.
- Planned reduction of emissions by more than 90%.
The Peter Lynch Chart suggests that the company is currently overvalued:
DTE Energy has a market cap of $11.9 billion. Its shares are currently trading at around $67.29 with a P/E ratio of 19.00, a P/S ratio of 1.30 and a P/B ratio of 1.50. The company had an annual average earnings growth of 4.90% over the past ten years.
Northeast Utilities (NU)
On Dec. 3, Northeast Utilities declared a dividend of $0.368 per share, representing a 3.50% dividend yield for the company. This dividend is payable on Dec. 31 to shareholders of the record at the close of business on Dec. 13, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 9.10%
· 5-year: 11.50%
· 3-year: 11.70%
Northeast Utilities is the parent company of the Northeast Utilities system. The NU system furnishes franchised retail electric service to customers in 419 cities and towns in Connecticut, New Hampshire and western Massachusetts through three of NU's wholly-owned subsidiaries.
Northeast Utilities historical revenue and earnings growth:
The analysis on the company reports that its revenue has been in decline over the past five years, its price is nearing a 10-year high and its operating margin is expanding.
The top guru shareholders of NU:
1. Columbia Wanger: 2,000,000 shares, representing 0.64% of the company’s shares outstanding.
2. Mario Gabelli: 791,759 shares, representing 0.25% of the company’s shares outstanding.
3. Pioneer Investments: 663,420 shares, representing 0.21% of the company’s shares outstanding.
The Peter Lynch Chart suggests that the company is currently overvalued:
The company’s third quarter results reported:
- Reported earnings of $209.5 million, or $0.66 per share, up from $207.6 million, and $0.66 per share last year.
- Finalized costs on the acquisition between NU and NSTAR.
- Results included $12.9 million after-tax charges related to the merger.
- 2013 earnings guidance of $2.45 to $2.60 per share.
Northeast Utilities has a market cap of $13.02 billion. Its shares are currently trading at around $41.33 with a P/E ratio of 16.80, a P/S ratio of 1.80 and a P/B ratio of 1.40. NU had an annual average earnings growth of 0.10% over the past ten years.
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· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following four companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Verizon Communications (VZ)
On Dec. 6, Verizon Communications declared a dividend of $0.53 per share, representing a 4.20% dividend yield for the company. This dividend is payable on Feb 2 to shareholders of the record at the close of business on Jan. 10, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 2.20%
· 5-year: 3.20%
· 3-year: 2.80%
Verizon Communications is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies with a presence in over 150 countries around the world.
Verizon’s historical revenue and net income:
The analysis on Verizon reports that the company’s price is near a 10-year high, its P/B ratio is sitting near a 1-year low and the company has issued $44.1 billion of debt over the past three years. The company has also reported operating loss over the past year and a declining operating margin over the past five years.
The top guru shareholders of VZ:
1. James Barrow with 22,209,015 shares, representing 0.78% of the company’s shares outstanding.
2. Jim Simons: 5,209,317 shares, representing 0.18% of the company’s shares outstanding.
3. Brian Rogers: 5,007,200 shares, representing 0.17% of the company’s shares outstanding.
The company’s most recent quarterly release reports:
· EPS of $0.78, up from $0.56 per share last year.
· Non-GAAP EPS of $0.77, up 20.3% from last year.
· Cash flow from operations totaled $28.4 billion in the first nine months, up 14.7% from last year.
· Revenues of $30.3 billion, up 4.4% from last year.
The company also released that this past quarter represents the fourth consecutive quarter of year-over-year revenue growth of more than 4%.
The Peter Lynch Chart suggests that the company is currently overvalued:
Verizon Communications has a market cap of $141.6 billion. Its shares are currently trading at around $49.48 with a P/E ratio of 64.90, a P/S ratio of 1.20 and a P/B ratio of 4.10. The company had an annual average earnings growth of 4.00% over the past ten years.
Reynolds American (RAI)
On Dec. 5, Reynolds American declared a dividend of $0.63 per share, representing a 4.80% dividend yield for the company. This dividend is payable on Jan. 2 to shareholders of the record at the close of business on Dec. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 11.10%
· 5-year: 8.90%
· 3-year: 10.50%
Reynolds American, through its subsidiaries, manufactures cigarettes and other tobacco products in the United States. The Company's reportable operating segments are RJR Tobacco, American Snuff and Santa Fe.
Reynolds’ historical revenue and earnings growth:
The analysis on Reynolds reports that the company’s operating margin is expanding, its dividend yield is near a 5-year low and its price, P/B ratio and P/S ratio are all sitting near 10-year highs.
The top guru shareholders:
1. James Barrow: 2,418,402 shares, representing 0.44% of the company’s shares outstanding.
2. David Winters: 2,125,184 shares, representing 0.39% of the company’s shares outstanding.
3. Jim Simons: 1,994,400 shares, representing 0.37% of the company’s shares outstanding.
The company announced that its most recent dividend is the 38th consecutive quarterly cash dividend. It also reports that RAI’s policy is to return about 80% of the company’s current-year net income to the shareholders in the form of dividends.
The Peter Lynch Chart suggests that the company is currently overvalued:
Reynolds American currently has a market cap of $27.56. Its shares are trading at around $50.99 with a P/E ratio of 17.90, a P/S ratio of 3.40 and a P/B ratio of 5.50. The company had an annual average earnings growth of 1.10% over the past five years.
DTE Energy Holding Company (DTE)
On Dec. 5, DTE Energy Holding Company declared a dividend of $0.655 per share, representing a 3.80% dividend yield for the company. This dividend is payable on Jan. 15 to shareholders of the record at the close of business on Dec. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 1.60%
· 5-year: 3.60%
· 3-year: 4.40%
DTE Energy, through its subsidiaries, is engaged in the business of providing electricity and natural gas sales, distribution and storage services throughout southeastern Michigan. Its main operating segments are Electric Utility, Gas Utility, Non-Utility Operations, and Corporate and other.
DTE’s historical revenue and net income:
The analysis on DTE Energy reports that the company’s revenue has been in decline over the past five years, its price is trading near its 10-year high and over the past three years the company has issued $24 million of debt.
Jim Simons, Steven Cohen, Paul Tudor Jones and John Hussman all hold a stake in DTE. The only notable holdings come from Simons who holds on to 855,000 shares of the company’s stock, representing 0.49% of its shares outstanding, and Cohen who maintains 43,274 shares of the stock.
The company’s most recent quarterly release reports:
- Reported earnings of $198 million, or $1.13 per share, down from $227 million, or $1.31 per share.
- Operating earnings were at $198 million, or $1.13 per share, down from $226 million, or $1.30 per share.
- Upped their guidance range to $3.95 to $4.15 per share, up from $3.90 to $4.20 per share.
- Planned reduction of emissions by more than 90%.
The Peter Lynch Chart suggests that the company is currently overvalued:
DTE Energy has a market cap of $11.9 billion. Its shares are currently trading at around $67.29 with a P/E ratio of 19.00, a P/S ratio of 1.30 and a P/B ratio of 1.50. The company had an annual average earnings growth of 4.90% over the past ten years.
Northeast Utilities (NU)
On Dec. 3, Northeast Utilities declared a dividend of $0.368 per share, representing a 3.50% dividend yield for the company. This dividend is payable on Dec. 31 to shareholders of the record at the close of business on Dec. 13, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 9.10%
· 5-year: 11.50%
· 3-year: 11.70%
Northeast Utilities is the parent company of the Northeast Utilities system. The NU system furnishes franchised retail electric service to customers in 419 cities and towns in Connecticut, New Hampshire and western Massachusetts through three of NU's wholly-owned subsidiaries.
Northeast Utilities historical revenue and earnings growth:
The analysis on the company reports that its revenue has been in decline over the past five years, its price is nearing a 10-year high and its operating margin is expanding.
The top guru shareholders of NU:
1. Columbia Wanger: 2,000,000 shares, representing 0.64% of the company’s shares outstanding.
2. Mario Gabelli: 791,759 shares, representing 0.25% of the company’s shares outstanding.
3. Pioneer Investments: 663,420 shares, representing 0.21% of the company’s shares outstanding.
The Peter Lynch Chart suggests that the company is currently overvalued:
The company’s third quarter results reported:
- Reported earnings of $209.5 million, or $0.66 per share, up from $207.6 million, and $0.66 per share last year.
- Finalized costs on the acquisition between NU and NSTAR.
- Results included $12.9 million after-tax charges related to the merger.
- 2013 earnings guidance of $2.45 to $2.60 per share.
Northeast Utilities has a market cap of $13.02 billion. Its shares are currently trading at around $41.33 with a P/E ratio of 16.80, a P/S ratio of 1.80 and a P/B ratio of 1.40. NU had an annual average earnings growth of 0.10% over the past ten years.
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
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