The Dynamic Dividend

These Companies Will Raise Their Dividends in October

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, 96% of the featured companies have come through with dividend hikes during the predicted month.

Below are my picks for the month of October. Collectively, these seven companies have been increasing shareholder returns for more than 200 consecutive years.

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Update (10/24): All seven of the companies I listed for October have now raised their payouts. Here are the appropriate links to each company’s dividend action:

10/5: NW Natural Raises Dividend for 56th Straight Year
10/6: RPM Reaches 37 Consecutive Years of Dividend Growth
10/7: West Pharmaceutical Raises Dividend Again
10/19: Brown & Brown Ups Dividend for 18th Straight Year
10/19: Stepan Raises Dividend for 44th Consecutive Year
10/20: Eaton Vance Ups Dividend for 31st Consecutive Year
10/24: V.F. Corp Raises Dividend for 39th Consecutive Year

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Brown & Brown (BRO) increased its dividend by 3% to $0.08 per share last October, marking the 17th consecutive year the insurance intermediary has given its shareholders a raise. The company should have no trouble running its streak to an 18th year, given its tiny forward payout ratio (24%) and significant cash hoard ($2.01 per share). Brown & Brown typically announces its annual dividend hike during the second half of October, around the release of its third quarter results.

Eaton Vance (EV) ran its dividend growth streak to 30 consecutive years by giving its shareholders a 12.5% raise last October. The investment management firm, which typically lifts its payout around the 20th of October, is in a great position to extend its streak thanks to a sub-40% forward payout ratio and a cash hoard large enough to power its current dividend for 25 quarters.

Northwest Natural Gas (NWN) raised its dividend for the 55th consecutive year last October, and there’s no reason to believe the 152-year-old natural gas distribution and storage company won’t extend its staggering streak — which is tied for the third-longest among all publicly-traded companies — again this month. NWN has announced its annual dividend hike during the first few days of October each of the last five years.

RPM International (RPM) has increased its dividend output every year dating back to 1975, though it hasn’t given shareholders a double-digit raise in more than two decades. With its payout approaching 50% of future earnings estimates, don’t expect the specialty coating and sealant company to break character and get aggressive with its payout. But do expect it to run its dividend growth streak to a 37th year during the first half of October, when it traditionally announces its annual dividend hike.

Stepan Company (SCL) has improved its dividend output every year dating back to 1968, and it would be supremely disappointing if the global chemical manufacturer didn’t extend its streak once again this year. Stepan has an absurdly low forward payout ratio (14%) for a company with its rich dividend growth tradition, so watch for it to at least match last October’s dividend hike by bumping its quarterly payout by a couple of pennies within its third quarter results.

V.F. Corporation (VFC) increased its dividend by 5% last October, marking the 38th consecutive year the apparel giant has given its shareholders a raise. The company, which currently carries a forward payout ratio of just 27%, should have no trouble stretching its streak to a 39th year later this month. V.F. Corp traditionally announces its annual dividend hike within its third quarter results, which it’s currently scheduled to release on Monday, October 24.

West Pharmaceutical Services (WST) has increased its dividend every year dating back to 1993, traditionally announcing the move within the first few days of October. Last year the company gave its shareholders a 6.3% raise on October 4.