Dividend Champions: Smackdown IV

In previous installments of the Smackdown series, I screened the Dividend Champions list of companies that have paid higher dividends for at least 25 straight years (which can be found here) starting with companies whose latest increase was by 10% or more (in June), those with the highest yields (in July), and those with the lowest prices (in August). This month, I decided to focus first on the Acceleration/Deceleration (A/D) ratio and the 5- and 10-year Dividend Growth Rates (DGRs). What I hoped to isolate were companies that consistently raise their dividends at above-average rates and provide good dividend yields. Of course, it's also important to screen for other positive qualities, but this approach should give us a good start in identifying high-quality candidates. So I screened as follows:Step1: Sort the companies by A/D ratio, from high to low. For greatest consistency, I decided to narrow the focus to companies whose A/D ratio was between 0.90 and 1.30. My reasoning was that a number slightly below 1 was natural for companies with long streaks that couldn't be expected to maintain a high percentage increase forever; and that an A/D ratio that was too high might be distorted by one or two exceptional increases and also might be somewhat unsustainable. (I realize that these parameters are somewhat arbitrary, but I'm still in the process of figuring out how to use the A/D ratio in the best way possible.) This gave me a group of 49 companies and I eliminated one that hadn't increased its dividend in the past year.... Read more