The Dynamic Dividend

These Companies Will Raise Their Dividends in November

Each month I name the companies most likely to give their shareholders a raise, based on their historical dividend activity, current financial condition, and near-term prospects. Since I started writing these forecasts, 97% of the featured companies have come through with dividend hikes during the predicted month.

Below are my picks for the month of November. Collectively, these ten companies have been increasing shareholder returns for more than 300 consecutive years.

Becton, Dickinson & Co. (BDX) can secure a 40th consecutive year of dividend growth by raising its payout before the end of the year, and all signs point to the medical technology company extending its streak in late November. Becton has announced its annual dividend hike between November 20 and November 28 every year since 1998, has a forward payout ratio of just 25.6%, and has enough cash ($8.87 per share) to power its current dividend rate for more than five years.

Emerson Electric (EMR) raised its dividend last November for the 54th consecutive year, a streak that’s tied for the fifth-longest among publicly traded companies and shows no signs of slowing down. The diversified technology company will likely be the first name on this list to increase its dividend, as it traditionally announces its annual dividend hike in tandem with its fourth quarter earnings release, which is scheduled for the morning of November 1.

Nike (NKE) can’t match the lengthy streaks the other names on this list have put together, but it is a budding dividend growth superstar. The apparel giant has raised its dividend every year since 2002, and looks poised to run its streak to a full decade by announcing yet another dividend hike this month. Nike, which traditionally declares its final dividend of the calendar year in mid-to-late November, has one of the lowest forward payout ratios (21.6%) and highest cash coverage ratios (enough to power its current payout for the next 25 quarters) on this list, so shareholders should expect a solid raise.

Lancaster Colony (LANC) has improved its dividend output every year dating back to 1963, and traditionally announces its annual payout increase in the middle of November. Last year the diversified manufacturer showed that it has a little dividend growth momentum to go with its long streak by giving shareholders their largest raise (10%) in seven years.

Tennant Company (TNC) has improved its dividend output for 39 consecutive years, and it would be a major disappointment if the company didn’t take its streak to 40 this month. The milestone is all but a lock, as the surface products company sports a forward payout ratio of just 27% and enough cash on its balance sheet ($2.36 per share) to cover its current payout for several years. Tennant typically announces its annual dividend hike within the first ten days of November.

Brown-Forman (BF.B) has raised its dividend every year dating back to 1985, and 2011 looks to be no different. The alcoholic beverage company, which historically announces its annual dividend hike in mid-November, distributes just 32% of its expected 2012 earnings to shareholders and has enough cash to power its current payout for more than three years.

Vectren (VVC) looks poised to extend the ninth-longest dividend growth streak among publicly-traded companies this month. The energy holding company, which has raised its payout every year since 1960, traditionally announces its annual dividend hike on or before the day it reports its third quarter results — which it’s currently scheduled to release on November 4.

Atmos Energy Corporation (ATO) has raised its dividend every year dating back to 1989, traditionally making the move in early November. The natural gas distributor has one of the lowest forward payout ratios (55.5%) and larger cash hoards ($1.30 per share) within its industry, so expect Atmos to extend its dividend growth streak yet again this month.

StanCorp Financial Group (SFG) pays its dividend in annual installments, so it can fly under the radar of investors seeking regular income. But what the insurance holding company’s dividend lacks in frequency, it more than makes up for with consistency: StanCorp has improved its dividend output every year since initiating its payout in 1999, and declared its annual dividend in November every year since 2002.

Automatic Data Processing (ADP) has raised its dividend annually since 1975, and seems likely to extend its streak to a 37th consecutive year this month. The business solutions company has a slimmer margin of safety than some of the other names on this list thanks to a relatively large — but still entirely manageable –48% forward payout. So shareholders aren’t likely to receive a large raise this year, but should expect the company to extend its streak with at least a nominal payout bump. ADP traditionally announces its annual dividend hike shortly after releasing its first quarter results, which it did on October 26.