During the past week, GuruFocus recognized five companies as dividend growers. In order to be qualified for this list, the company had to:
- Have a dividend 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 five 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:
Mattel (MAT)
On July 17, Mattel declared a dividend of $0.380 per share, representing 4.20% dividend yield for the company. This dividend is payable on Sept. 19 to shareholders of the record at the close of business on Aug. 27, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 12.10%
- 5-year: 18.60%
- 3-year: 20.20%
Mattel designs, manufactures and markets a number of toy products through sales to its customers and directly to consumers. The company's portfolio of brands and products are grouped in the following categories: Mattel Girls & Boys Brands, American Girl Brands, Barbie and Fisher-Price Brands US.
Mattel’s historical revenue and net income:
The analysis on Mattel reports that the company’s revenue per share has slowed down over the past year, it has issued $387.318 million of debt over the past three years and the company has a poor stock buyback track record. The analysis also notes that the company’s operating margin is expanding and that its dividend yield is near a 2-year high.
The Peter Lynch Chart suggests that the company is currently overvalued:
Mattel has a market cap of $12.23 billion. Its shares are currently trading at around $36.05 with a P/E ratio of 14.70, a P/S ratio of 1.90 and a P/B ratio of 3.98. The dividend yield for Mattel stocks is at 4.20%, and the company had an annual average earnings growth of 6.80% over the past ten years.
Reynolds American (RAI)
On July 17, Reynolds American declared a dividend of $0.670 per share, representing 4.50% dividend yield for the company. This dividend is payable on Oct. 1 to shareholders of the record at the close of business on Sept. 10, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 12.10%
- 5-year: 18.60%
- 3-year: 20.20%
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 American reports that the company’s operating margin is expanding, its price is near a 10-year high and its dividend yield is near a 5-year low.
The Peter Lynch Chart suggests that the company is currently overvalued:
Reynolds American currently has a market cap of $31.03 billion. Its shares are trading at around $57.89 with a P/E ratio of 20.10, a P/S ratio of 3.80 and a P/B ratio of 6.27. The company had an annual average earnings growth of 6.60% over the past ten years.
Consolidated Edison (ED)
On July 17, Consolidated Edison declared a dividend of $0.630 per share, representing 4.40% dividend yield for the company. This dividend is payable on Sept. 15 to shareholders of the record at the close of business on Aug. 13, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 0.90%
- 5-year: 1.00%
- 3-year: 1.10%
Consolidated Edison is a holding company which owns all of the outstanding common stock of Consolidated Edison Company of New York, Inc. It provides a range of energy-related products and services to its customers through its subsidiaries.
Consolidated Edison’s historical revenue and net income:
The analysis on Consolidated Edison reports that the company reports that the company’s revenue per share has been in decline for the past five years, its price is near a 1-year high and the company has issued $1.3 billion of debt over the past three years. The analysis also notes that the company’s Piotroski F-Score is high, its operating margin is expanding and the company’s P/E and P/B ratios are trading near historic lows.
The Peter Lynch Chart suggests that the company is currently undervalued:
Consolidated Edison has a market cap of $16.75 billion. Its shares are currently trading at around $57.19 with a P/E ratio of 13.60, a P/S ratio of 1.30 and a P/B ratio of 1.35. The company had an annual average earnings growth of 3.90% over the past ten years.
Wisconsin Energy (WEC)
On July 17, Wisconsin Energy declared a dividend of $0.390 per share, representing 4.40% dividend yield for the company. This dividend is payable on Sept. 1 to shareholders of the record at the close of business on Aug. 14, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 15.60%
- 5-year: 21.30%
- 3-year: 21.80%
Wisconsin Energy conducts its operations mainly in two operating segments: a utility energy segment and a non-utility energy segment.
Wisconsin Energy’s historical revenue and net income:
The analysis on Wisconsin Energy reports that the company has issued $218.2 million of debt over the past three years, its price is close to a 10-year high and its Piotroski F-Score is high.
The Peter Lynch Chart suggests that the company is currently overvalued:
Wisconsin Energy Corporation has a market cap of $10.23 billion. Its shares are currently trading at around $45.38 with a P/E ratio of 17.00, a P/S ratio of 2.10 and a P/B ratio of 2.53. The company had an annual average earnings growth of 3.30% over the past ten years.
McDonald’s (MCD)
On July 17, McDonald’s declared a dividend of $0.810 per share, representing 3.30% dividend yield for the company. This dividend is payable on Sept. 16 to shareholders of the record at the close of business on Sept. 2, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 21.30%
- 5-year: 11.40%
- 3-year: 11.30%
McDonald’s Corporation franchises and operates McDonald's restaurants in the food service industry. The company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers.
McDonald’s Corp’s historical revenue and net income:
The analysis on McDonald’s reports that the company’s operating margin is expanding, its dividend yield is near 3-year high, and its P/E and P/B ratios are trading near historic lows. The analysis also notes that the company’s price is near a 10-year high, its revenue per share has slowed down over the past year, and the company has issued $2 billion in debt over the past three years.
The Peter Lynch Chart suggests that the company is currently overvalued:
McDonald’s has a market cap of $96.42 billion. Its shares are currently trading at around $97.55 with a P/E ratio of 17.70, a P/S ratio of 3.50 and a P/B ratio of 6.00. The company had an annual average earnings growth of 13.40% over the past ten years.
GuruFocus rated McDonald’s the business predictability rank of 4.5-star.
