These 17 Dividend Growth Stocks Go Ex-Dividend Next Week

Dividend CalendarAhh, the exciting world of dividends. If you can’t tell by my nickname, I’m a big fan!

Who doesn’t like cash money hitting their account(s)?

And even better if this capital comes by way of high quality companies that take you as a part-owner of the business seriously, and value that business relationship with a piece of the profit pie.

Below, you’ll find a table of stocks that go ex-dividend next week. And this is an important and valuable notice to investors.

In order to lay claim to the next dividend payout of any of the companies listed below you’ll have to own the stock at least one business day before the ex-dividend date.

Owning the stock on the ex-dividend date or after the ex-dividend date will not allow an investor to participate in the profit sharing goodness that is dividends, meaning they will not receive the next scheduled dividend payout.

This is an important distinction that may impact your decision to buy a stock.

And the stocks listed below aren’t just stocks that happen to have an upcoming dividend payout scheduled.

No, these are actually unique stocks that have a history of growing their dividends.

In order for a stock to show up in this weekly column it has to have grown its dividend payout at least once per year for the last five years.

As such, these stocks are found in David Fish’s wonderful Dividend Champions, Contenders and Challengers list – a treasure trove of information if you’re a dividend growth investor like myself, or even just an investor that enjoys business partnerships with high quality companies that tend to reward shareholders with not only regular dividend payouts, but dividends that rise annually.

So who cares about dividend raises, anyways? You should.

Regular dividend raises for shareholders indicates a company is healthy, as dividends are paid in cash from cash. You can’t make up dividends, and there are no accounting tricks here. If a company has a lengthy streak of rising dividend payouts this means they’re doing something significantly right.

Looking through David Fish’s list shows a barrage of companies that have economic “moats” to protect the “castle” that is the business.

By that, I mean they typically have competitive advantages; these advantages include pricing power due to strong brand names, economies of scale, geographic reach and diversification, product breadth, high switching costs and contracts with other businesses or government entities, among other qualities.

These advantages ensure that these companies can continue increasing top line and bottom line growth, which translates into more money for us shareholders.

A win-win, right? You betcha!

So check out the list of stocks that go ex-dividend next week and see if you can find any gems. Please remember, this list is for informational purposes only and is not a recommendation to buy any specific stocks.

Years of
Symbol Stock Yield Ex. Div. Date Dividend Growth
ACE ACE Limited 2.02% 1/13/2014 21 years of dividend growth
AFG American Financial Group 1.56% 1/13/2014 8 years of dividend growth
NWFL Norwood Financial Corp. 4.20% 1/13/2014 15 years of dividend growth
RGCO RGC Resources, Inc. 3.79% 1/13/2014 11 years of dividend growth
SJR Shaw Communictions 4.03% 1/13/2014 11 years of dividend growth
SHLM A. Schulman, Inc. 2.36% 1/15/2014 6 years of dividend growth
OZRK Bank of the Ozarks, Inc. 1.49% 1/15/2014 15 years of dividend growth
CMN Cantel Medical Corp. 0.22% 1/15/2014 5 years of dividend growth
GD General Dynamics 2.37% 1/15/2014 22 years of dividend growth
CBRL Cracker Barrel 2.74% 1/15/2014 11 years of dividend growth
EOG EOG Resources, Inc. 0.46% 1/15/2014 14 years of dividend growth
YUM Yum! Brands Inc. 1.96% 1/15/2014 10 years of dividend growth
MGRC McGrath Rentcorp 2.50% 1/15/2014 21 years of dividend growth
KWR Quaker Chemical Corp. 1.31% 1/15/2014 6 years of dividend growth
WST West Pharmaceutical Svs. 0.82% 1/17/2014 21 years of dividend growth
HRL Hormel Foods 1.52% 1/17/2014 48 years of dividend growth
LOW Lowe’s Companies Inc. 1.49% 1/17/2014 51 years of dividend growth

Of the companies listed above, I personally own shares in General Dynamics (GD).

I talked a little about government contracts and high switching costs as competitive advantages, and obviously you see that in action here with General Dynamics. The company is the fifth-largest defense contractor (based on 2012 revenues), and they operate in four distinct business groups: Aerospace, Combat Systems, Marine Systems and Information Systems and Technology.

General Dynamics manufactures and sells major military components like the M1 Abrams tank, Stryker wheeled combat vehicle and nuclear-powered submarines. While this may be what they’re primarily known for, the Information Systems and Technology unit actually contributes the largest amount of consolidated revenue to the company, at 32% for 2012.

While government budgetary concerns are always looming, global unrest unfortunately isn’t going to disappear tomorrow. General Dynamic’s $51 billion backlog can attest to that. And switching platforms is difficult once you spend the time and money to train personnel on how to use systems and components that are already in place. Furthermore, the company has significant operations in non-military aviation due to its Gulfstream division.

The company maintains a highly attractive balance sheet with a debt/equity ratio of 0.3. The P/E ratio isn’t meaningful right now due to significant non-cash charges that caused the company to report a loss of $0.94 per fully diluted share in 2012 for full-year results.

These charges were mainly due to goodwill impairment in certain divisions, but over the long haul this company stands to do very well. Using other valuation metrics (P/B, P/S, P/CF), GD is valued similarly to other publicly traded defense contractors – which is to say not particularly attractive, but not overtly expensive either.

But let’s get back to that juicy dividend! Shares go ex-dividend on 1/15/14, and investors stand to collect $0.56 per share.

GD shares yield 2.35% at today’s prices, and the company has 22 years of consecutive dividend growth under its belt – a testament to shareholder friendliness.

Furthermore, the 10-year dividend growth rate stands at 13.3%, which is rather robust. The dividend is well-covered here with a free cash flow payout ratio of just 39%.

While I don’t find General Dynamics (GD) a buy at today’s prices, I’m a big fan of the business and I find it one of the higher quality companies you can purchase a piece of in the table above.

Thanks for reading.

Jason Fieber, Dividend Mantra

Full Disclosure: Long GD

Ex-Dividend Data Source: Zacks