UK Dividend Champions May 2015 Update

UK Dividend Champions List logo for May 2015 The May 2015 update to the UK Dividends Champions List is now available at DividendChampions.UK.

Most of the changes this month are updating yields and prices so there aren’t too many changes. However 4 companies joined the ranks of Contenders (10+ years) and 2 companies departed the Challengers (5+ years).

Here’s an overview of the changes this month – there was a net loss as only one company joined the list and two were removed.

Category May April
Champions (25+ years)  11  11
Challengers (10-24 years)  62  58
Contenders (5-9 years)  127  132
Near-Contenders (4 years)  67  67
Total  267  268

The Financial Year ranking isn’t as complete as the Calendar Year ranking, but it’s slowly increasing as I research companies.

Category May April
Dividend Growth 25+ years 9 8
Dividend Growth 10-24 Years 51 46
Dividend Growth 5-9 Years 25 17
Dividend Growth 1 to 4 Years 27 22
Total 112 93

New Entries & Promotions

Next plc – Promoted to Contender (22)

Next plc is a clothing, footwear and home products retailer operating around 740 stores worldwide, although the majority (539) are in the UK and Ireland.

Aberdeen New Dawn Investment Trust plc – Promoted to Contender (10)

ABD plc is an actively managed fund that aims to provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries excluding Japan.

Beazley plc – Promoted to Contender (12)

Beazley plc is a specialist insurance company which offers Life, Accident/Health, Marine and Political/Contingency insurance.

Brunner Investment Trust plc – New Contender (15)

Brunner Investment Trust plc is an actively managed mutual fund with the objective to increase its total return above the benchmark index of 50% FTSE All-Share and 50% FTSE All-World Index over the long term, by investing in UK and international securities.


Companies removed from the list

The following companies were removed from the list this month. Companies are removed if they fail to increase their calendar year dividend or are delisted. The Summary tab in the List contains some more details on the particular reason for the deletion.


Corrections

  • BATS, BNKR, CNA, DOM, HL., IPF and MGGT had their growth lengths corrected based on new dividend information. The adjustments did not large enough for a promotion or demotion however.


Fundamental Data

Entries in the list that have a “Founded” column have been manually researched and checked. The Dividend per Share and yield for these entries should be accurate as of 1st May.

Dividend yield is calculated as the last 12 months of most recent dividend declarations divided by the current share price. Special dividends are also not included in yield or DPS calculations, so actual yields may be higher.

All dividend history data that I have is posted on DividendChampions.UK.

Please kind in mind that the fundamental data will get increasingly out of date as the month progresses. You should always perform your own research and due diligence on any potential stock purchase.

Summary

Well that’s it for May – I’ll be continuing to do further research to improve the list accuracy and scope for next month’s update.

Please let me know if you see any errors in the List, thank you!

Quote of the day

A goal is a dream with a deadline.

0 thoughts on “UK Dividend Champions May 2015 Update”

    1. Hi Aron,

      I’m assuming you’d want future / projected PEG values, or did you mean historical TTM PEG growth over the last year?

      I don’t have a good source of data for projected EPS values for UK stocks right now. Maybe I could rely on company guidance EPS although I’m not sure the smaller AIM companies report that. I’ll certainly look out for one and see what I can add in the future.

      Eventually I’d like to add more historical EPS and other finance data into my database as I’d like to show changes in payout ratio / cover etc. That would then cover the TTM PEG values.

      Best wishes,
      -DL

  1. Top work as always! Thanks for compiling this.

    You suggest above that exchange rates for Mondi shortened its record. Could you explain what you mean by that? Do you mean that their dividend grew but–due to adverse FOREX rates–it registers as a drop?

    1. Hi D2,

      Mondi declare their dividend payments in Euros. In 2011 they declared 16.5 + 8.25 = 24.75 and in 2012 they declared 17.7 + 8.9 = 26.6. So it was an increase.

      But as a UK investor, you get paid in sterling and you’d actually have received 21.92 GBp in 2011 and a slightly lower 21.54 GBp in 2012.

      I originally started out the champion list with the viewpoint of tracking increasing dividends being received in your (UK) bank account, so I think it’s fair to eliminate such companies / funds. If you’re relying on that income increase then the exchange rate on their dividends make them a higher risk than companies which pay dividends directly in sterling.

      I’m going to work on the FY calculations this month, including adding a 1-year grace period as has been discussed earlier. I’ll see if it makes sense to ignore currency in those determinations too. Any thoughts you have on this are always welcome too!

      Best wishes,
      -DL

      1. I see where you are coming from there. I’d probably say that judging the dividend by their declared currency is more appropriate.

        After all, think of the reverse situation. Say a company progressively decreased its dividend in Euros, say, from 20 cents to 19 cents to 18 cents etc. but in Pounds–due to the changing FOREX rate–it provided 14p, 15p, and 16p in each of the above years. Have they earned 3 years of dividend growth really? I would not say so. But by your above criteria they would have.

        A good example is Unilever. They declare in Euros and have grown the dividend for many, many years. However, in sterling it has been somewhat up and down. However, it is often of small degrees. What is more, in some years it may mean the sterling dividend has shrunk, but other times it has grown faster.

        Overall, they are a superb dividend champion even if FOREX sometimes complicates it!

        Also, going with the currency declaration of the company itself makes it easier to compile on your part! This should definitely be a consideration as well!

        I don’t know what others think?

        1. HI D2,

          I agree with your example that forex rates could mask a downward dividend trend – I think it’s rare though and a look at the FY list would quickly unmask them. Companies which make their declarations in UKP but internally report in that currency will likewise report great results in such an environment even if their underlying performance was decreasing.

          The problem with keeping the declared currency is that companies may change their currency over time, for example UDG switched from Irish pounds to Euros in 2004 and SN. switched from UKP to USD in 2006. Normalizing everything to UKP makes things simpler and allows direct comparisons throughout their history and also between companies. It also reduces confusion in the report since everything else (price, yield etc.) are shown in UKP.

          The CY calculation isn’t fallible by any means; companies can hold/decrease their dividends in a second year, but still show a CY increase over the previous year depending on how much and when they made the increase.

          Your point about ULVR really just underlines my general approach; if you’re investing for continued increased income then ULVR might not be a good choice even though it’s a great company. The example I usually give here is Berkshire Hathaway – awesome company and great for total return; not so good if you want an increasing dividend payment.

          Anyway, that’s where I see the FY compromise (keeping FY length in declared currency) adding value since that’s how companies themselves report dividend growth history, and it should align well with other Dividend Aristocrat type lists.

          I’m hoping that my website is much more transparent about the dividend history and the declared vs. the adjusted values. It’s hard to convey everything in one spreadsheet.

          All points of view welcome 🙂

          Best wishes,
          -DL

          1. Good point well made. I do think both ways have their respective merits.

            However, it does rather punish dividend payers for something they cannot control. Also, many people will be investing in UK companies and receive their cash in non-sterling payments (such as US or Euro investors). This would complicate it further.

            Similarly, your UDG example is good (I was looking at them recently as a possible UK-listed way of playing the weak Euro!). However, I would have merely adjusted the first Euro payment to check whether it was higher/lower than the Irish pound payment in real terms and then continued tracing them in Euros.

            How about using constant currency rates for conversion to sterling?

            I understand your point with regards Unilever. But I’d argue that the most important aspect of a progressive dividend policy is what it shows the company is looking to do. If they are declaring increasing dividends each year I am happy. It shows confidence in growth and ability to service shareholder returns.

            My actual return–when currency exchanges are involved–will necessarily be more inconsistent in such a case. However, over time it will usually largely even out: sometimes giving me more, sometimes less.

            I want to see company commitment (and their ability to actually act on that commitment) rather than the whims of the FOREX market. I look for level-headed management and returns (shown through the declared dividend) rather than getting too bogged down in the intemperate world of FOREX!

            Anyway, great work with the list. It is certainly wonderfully transparent with how it is arranged which is great. It means you can make your own choice on how to handle the data!

            Keep up the great work as usual!

        2. Hi D²,

          It looks like I reached the reply limit to your last comment lol – so I’m hijacking another comment and I’ll have to keep this short as I’m running to work in a minute. Figuratively speaking anyway; I drive.

          The points you’ve made about progressive dividend policy are well taken and valid – but those very statements push you towards using FY as the metric. Companies don’t say “I’m going to increase my interim dividend payment this year so my CY growth increases”; they make any progressive policy based on their FY results and schedule.

          Hence there are companies already in the list which have an FY growth much longer than CY (and vice-versa). It’s a moot point if the ForEx contributed to that difference or not since it happens even when companies use only UKP. Less than 10% of companies I’ve researched report in non-UK currencies so it’s not a huge number of companies.

          Thanks for your support and feedback as always! Certainly lots to think about.

          Best wishes,
          -DL

  2. Thanks for sharing the list of UK dividend champions. They are all definitely worth looking into for our Roth IRA. Enjoy the rest of your weekend buddy! AFFJ

  3. Thank you so much for taking on the task of creating and updating this list of dividend champions/contenders/ challengers for the UK stocks.

    The world just got a little smaller 😉

    Best Regards,

    Dividend Growth Investor

    1. Hi DGI,

      You’re welcome – I’m learning a lot doing it! The FI community is so encouraging and supportive that it’s good to be able to give something back.

      Best wishes,
      -DL

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