Published Mon, 10 Oct 2016 06:34:49 -0400 on Seeking Alpha
In compiling the Dividend Champions list (here) I get to see which companies are nearing the anniversaries of their previous dividend increases. Most of these firms raise their payout about the same time every year, but some companies go longer before boosting their dividends, and this can raise concerns about their streaks of increases. Other streaks end because of unsustainable yields (or payout ratios) or because the companies are acquired by other firms. Note that all references to "CCC" below refer to the collection of Dividend Champions (25 or more years of higher dividends), Contenders (10-24 years), and Challengers (5-9 years).
Dividend Streaks in Danger: Overview
In previous years, I published quarterly articles mainly focused on "overdue" dividend increases, defined as being a year or more since the previous increase. That generally means declaring the same per-share amount for a fifth straight quarter. Once the overdue situation reached the point of a company paying the same total dividends in back-to-back years, it was considered a "freeze," requiring deletion from the CCC listing. This year has been a little different, however, starting with my article in January that focused on the turmoil in the oil patch and very real possibility that it would lead to numerous cuts in distributions. More on that later. For various reasons, there were no Second- or Third-quarter articles, and I am returning to potential Freezes as the focus of this... Read more