Case of Dividend Growth in Emerging Economies

growthThe list of dividend aristocrats, dividend achievers, or dividend champion is favorite hunting ground most of the dividend focused investors. This list includes companies from S&P500 index or S&P1500 index that have been continuously raising dividends last 25 years or 10 years or more. In general, these are companies that are listed on US markets. The list of companies (and dividend opportunities) will keep churning. It is really difficult to predict which ones will continue to survive for another 10 years or more. As they age, it will be harder for them to sustain their dividend growth momentum. The likelihood of their ability to grow dividend will continue to diminish.
We need to understand dividend growth in the context of growth in US economy. Dividend growth is only possible on the back of growth in corporate earnings. Keeping with the growth of US economy, many of these companies also continued to grow and hence dividends kept increasing. However, investors cannot ignore the current US economy vis-à-vis emerging market economies.

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Where is the Growth Coming From?

Majority of the S&P500 companies have declared their third quarter earnings. There is a general observation that earnings are rebounding (i.e. going into positives instead of negative). Most of the companies are showing signs of stability. I have included two charts below taken from Business Week magazine.

Chart 1 shows the overall operating earnings of the S&P index companies. It shows the operating earnings were negative in last quarter of 2008. Since then, the operating earnings are slowing coming back and increasing quarter over quarter. continue reading rest of the article….

Kimberly-Clark: High Risk Dividend Growth Stock

kc_logo_newKimberly-Clark is a global health and hygiene company with operations in 37 countries. It’s products are sold in more than 150 countries. It has a well-known family care and personal care brands such as Kleenex, Scott, Andrex, Huggies, Pull-Ups, Kotex, Poise, and Depend.

KMB is a dividend aristocrat and member of Mergent’s Broad Dividend Achievers index. I last reviewed KMB in February 2009 (without its 2008 results). At that point in time, it was high risk to dividend stocks. I have made an observation that its dividends would be under pressure. This 2009 dividend growth rate was only 3.4%, which is lower than its historical average of 9.4%. I am reviewing this again for risk to dividends.

Trend Analysis
This section measures the trends for past 10 years of corporation’s revenue and profitability. The parameters should show consistent growth trends. The chart below shows these trends.

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Dividend Tree Potpourri – November 8, 2009

During the week I participated in blog carnivals and continue to read articles from fellow bloggers. I am listing some of the articles that I enjoyed reading.

Economy, Finance, Investing.…..

These are some diverse set of articles from fellow bloggers and business magazines. I hope you enjoy reading all or some of these interesting posts.

Waste Management Inc – Stock Analysis for Dividend Growth Portfolio

logo_wm_headerWaste Management Inc. (WM) provides integrated waste management services in North America. The company is engaged in collection, transfer, recycling, disposal, and waste-to-energy services. WM is neither a dividend aristocrat nor a dividend achiever. In fact, WM has started showing some dividend growth trends in last five years. While I am presenting and showing data from last 10 years, I am only using last five years of dividend data. My objective here is to understand if WM has any potential to be a dividend achiever.

Trend Analysis
Since WM has recently started growing dividends, I am looking at trends for past 5 years of corporation’s revenue and profitability. The parameters should show consistently growth trends. The trend charts is shown in image below and for background reference I have plotted data for past 10 years.

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