During the past few weeks, GuruFocus recognized three 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 three 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:
Philip Morris International (PM)
On March 11, Philip Morris declared a dividend of $1.00 per share, representing 5.13% dividend yield for the company. This dividend is payable on April 10 to shareholders of the record at the close of business on March 26, 2015.
The company’s historical dividend growth is as follows:
- 10-year: 0.00%
- 5-year: 12.20%
- 3-year: 11.20%
According to the GuruFocus Dividend page for Philip Morris, the company has increased its dividend consistently since 2008.
Philip Morris is engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside the United States of America. Its portfolio comprises both international and local brands. Its portfolio of international and local brands is led by Marlboro.
Philip Morris’ historical revenue and net income:
The largest holders consist of Capital Research Global Investors with 5.72% of the company’s shares outstanding and Vanguard Group who holds on to 5.56% of Philip Morris’ stock.
The analysis on Philip Morris reports that the company’s operating margin is expanding, its dividend yield is near a 5-year high and its revenue per share growth has slowed down over the past year.
The Peter Lynch Chart suggests that the company is currently overvalued:
Philip Morris has a market cap of $118.79 billion. Its shares are currently trading at around $76.79 with a P/E ratio of 16.20 and a P/S ratio of 4.04. The company had an annual average earnings growth of 10.90% over the past ten years.
Sasol Ltd (SSL)
On March 11, Sasol Ltd. declared a dividend of $0.572 per share, representing 5.17% dividend yield for the company. This dividend is payable on April 23 to shareholders of the record at the close of business on April 10, 2015.
The company’s historical dividend growth is as follows:
- 10-year: 14.80%
- 5-year: 12.30%
- 3-year: 18.80%
The company has had a continuous dividend increase since 2013.
Sasol is an international integrated energy and chemicals company. It develops and commercializes technologies, and builds and operates facilities, to produce product streams, including liquid fuels, etc.
Sasol’s historical revenue and net income:
The analysis on Sasol reports that the company has shown predictable revenue and earnings growth, its dividend yield is sitting near a 10-year high and its P/S, P/B and P/E ratio are all sitting near historic lows.
Three gurus including Jim Simons (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) and Bernard Horn (Trades, Portfolio) hold a position in Sasol.
The Peter Lynch Chart suggests that the company is currently undervalued:
Sasol Ltd has a market cap of $22.66 billion. Its shares are currently trading at around $34.68 with a P/E ratio of 8.70 and a P/S ratio of 1.28. The company had an annual average earnings growth of 14.50% over the past ten years.
GuruFocus rated Sasol the business predictability rank of 3.5-star.
Realty Income Corp (O)
On Jan. 20, Health Care REIT declared a dividend of $0.190 per share, representing 4.32% dividend yield for the company. This dividend is payable on April 15 to shareholders of the record at the close of business on April 1, 2015.
The company’s historical dividend growth is as follows:
- 10-year: 5.20%
- 5-year: 5.80%
- 3-year: 8.10%
Realty Income operates as an equity real estate investment trust, or REIT. The company offers in-house acquisition, leasing, legal, credit research, real estate research, portfolio management and capital markets expertise.
Realty Income’s historical revenue and net income:
The analysis on Realty Income reports that the company’s asset growth is faster than its revenue growth, but the company has shown predictable revenue and earnings growth. The analysis also notes that the company’s price is near a 10-year high and its dividend yield is near a 1-year low.
Realty Income Corp has a market cap of $11.49 billion. Its shares are currently trading at around $51.06 with a P/E ratio of 49.20 and a P/S ratio of 11.96. The company had an annual average earnings growth of 6.30% over the past ten years.
GuruFocus rated Realty the business predictability rank of 5-star.
Check out more of GuruFocus’ top Dividend Growers here.
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