Thursday, July 14, 2011

12 Industrial Strength Dividend Stocks With Annual Dividend Growth

The Industrials Sector consists of companies that manufacture products or provide business services. The products are often inputs or raw materials into another manufacturing process, such as steel producer.

Many of these companies are often referred to as members of the “smokestack industry” and are classified as cyclical stocks. A cyclical stock is one that rises and falls in step with the economy.

Timing is important when buying an industrial stock. If you buy when business is booming you will likely pay too much, which means a very low yield. Most stocks in this sector are currently overpriced. The average yield on the Industrial Sector stocks that I follow is only 2.0%, with just 7 stocks yielding over 3%.

The Industrials Sector is one of the largest sectors in my dividend growth database. Of the 209 stocks that I track, it currently is represented by 44 stocks (21%). As noted above, this is not a sector I am in a position to buy often, but when the time is right, I plan on taking full advantage of the opportunity.

This week week, I screened my dividend growth stocks database for Industrials with a yield at or above 2.4% and have increased their dividends for at least 7 consecutive years. The results are presented below:

PPG Industries, Inc. (PPG)
Yield: 2.4% | Years of Dividend Growth: 38
PPG is a leading manufacturer of coatings and resins, flat and fiber glass, and industrial and specialty chemicals.

Emerson Electric Co. (EMR)
Yield: 2.4% | Years of Dividend Growth: 55
Emerson Electric Co. designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial, and consumer markets around the world.

General Dynamics (GD)
Yield: 2.5% | Years of Dividend Growth: 20
General Dynamics is the world's fifth largest military contractor and also one of the world's biggest makers of corporate jets.

Automatic Data Processing Inc. (ADP)
Yield: 2.6% | Years of Dividend Growth: 35
Automatic Data Processing Inc. is one of the world's largest independent computing services companies, providing a broad range of data processing services.

MDU Resources Group Inc. (MDU)
Yield: 2.8% | Years of Dividend Growth: 21
MDU Resources Group Inc. is involved in electric and natural gas distribution, natural gas storage, gathering and transmission, construction materials and mining, and oil and natural gas production.

Genuine Parts Company (GPC)
Yield: 3.1% | Years of Dividend Growth: 55
Genuine Parts Co is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.

McGrath RentCorp (MGRC)
Yield: 3.2% | Years of Dividend Growth: 19
McGrath RentCorp rents and sells modular buildings and electronic test and measurement equipment, and liquid and solid containment tanks and boxes.

Diebold, Inc. (DBD)
Yield: 3.4% | Years of Dividend Growth: 58
Diebold, Inc. provides ATMs and other self-service transaction systems and security products to the financial, commercial, government and retail markets.

Raytheon Company (RTN)
Yield: 3.5% | Years of Dividend Growth: 7
Raytheon Company the world's sixth largest military contractor, specializes in making high-tech missiles, advanced radar systems and sensors, defense electronics, and missile-defense systems.

RPM International Inc. (RPM)
Yield: 3.5% | Years of Dividend Growth: 38
RPM International Inc. makes specialty coatings and products for the structural waterproofing and corrosion control markets, as well as products for the consumer, do-it-yourself, and hobby markets.

Waste Management, Inc. (WM)
Yield: 3.6% | Years of Dividend Growth: 8
Waste Management Inc. is the largest U.S. trash hauling/disposal concern.

Lockheed Martin Corp. (LMT)
Yield: 3.7% | Years of Dividend Growth: 9
Lockheed Martin Corp. is the world's largest military weapons manufacturer and is also a significant supplier to NASA and other non-defense government agencies receiving about 93% of its revenues from global defense sales.

As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.

My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 200+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.

Full Disclosure: Long LMT, GPC, ADP, GD, EMR. See a list of all my income holdings here.

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