• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Rolling Out the 2018 Mid Cap Dividend Growers Portfolio

Somewhat surprisingly, 24 names made the cut this year, versus 20 last year.
By JONATHAN HELLER
May 16, 2018 | 11:52 AM EDT
Stocks quotes in this article: SNA, RS, MAN, FAF, PB, TXRH, MBFI, IBOC, WAFD, RHI, CAKE, INGR, UNM, MSM, EVR, AIZ, CATY, FMBI, HOPE, CVG, FRME, INDB, ILG, WSBC

Today I roll out the 2018 Mid Cap Dividend Growers Portfolio, following fairly decent performance by last year's vintage. The idea was to assemble a group of names in an area of the market that I don't pay a lot of attention to (mid-caps) using an investment concept (dividend growth) that I've been enamored with and have written about for years.

Keep in mind that this concept is not about generating a high yield per se, but rather growing dividend payouts to shareholders, and having the capability of continuing to do so in the future. Shareholders can decide what to do with those dividends, either reinvest them in additional shares, or receive in cash, which is one reason many investors like dividends; as the old saying goes "a bird in the hand is worth two in the bush." Companies that can increase their dividends display a level of confidence, and it comes with some built-in checks and balances. To knowingly raise dividends to the point that they may not be sustainable is foolish; stocks are often battered in cases where dividends are reduced or eliminated.

The criteria for inclusion include in the portfolio are as follows:

  • $2 billion to $10 billion in market capitalization
  • Dividend increases in at least each of the past five years
  • Five Year dividend growth rate minimum 5%
  • Long-term debt-to-equity ratios below 50%
  • Dividend-payout ratios below 50% for the trailing 12 months and last two fiscal years
  • Minimum yield: 1.5%

Somewhat surprisingly, 24 names made the cut this year, versus 20 last year. Not surprisingly, there are several holdovers from last year, including the following:

  • Snap-on Inc (SNA)
  • Robert Half Intl (RHI)
  • Reliance Steel & Aluminum (RS)
  • ManpowerGroup (MAN)
  • First American Financial Corp (FAF)
  • Prosperity Bancshares (PB)
  • Texas Roadhouse (TXRH)
  • MB Financial Inc (MBFI)
  • International Bancshares Corp (IBOC)
  • Washington Federal (WAFD)

While banks and financials again dominate this year with a total of 14 names, including 10 regional banks, it is nice to see a second restaurant name, Cheesecake Factory (CAKE) . In addition, I did not recognize starch and sweetener name Ingredion (INGR) at first, but it is the former Corn Products International.

The other newcomers include:

  • Unum Group (UNM)
  • MSC Industrial Direct (MSM)
  • Evercore Inc (EVR)
  • Assurant (AIZ)
  • ILG Inc (ILG)
  • Cathay General Bancorp (CATY)
  • First Midwest Bancorp (FMBI)
  • Hope Bancorp (HOPE)
  • Convergys Corp (CVG)
  • First Merchants Corp (FRME)
  • WesBanco (WSBC)
  • Independent Bank Corp (INDB)

This portfolio has an average market cap of $4.5 billion, yield of 2.15%, with an average dividend payout ratio of about 34.5%.

I will continue to give periodic updates on performance, and we'll see if the concept has legs in year two.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Jonathan Heller had no position in the securities mentioned.

TAGS: Investing | U.S. Equity | Markets | Stocks

More from Investing

A Rally Driven by Fear (of Missing Out)

James "Rev Shark" DePorre
May 27, 2022 4:28 PM EDT

What's next after this seesaw week? One thing is for sure: More volatility.

Let's Take Nikola for a Spin. And Then Return It

Mark Sebastian
May 27, 2022 2:56 PM EDT

I wouldn't want to own NKLA, but I could see riding it for a few days.

In Awe of Marvell's Rally? Check the Charts, Not Your Emotions

Bruce Kamich
May 27, 2022 2:03 PM EDT

Here's why you should stay nimble as you approach MRVL after its post-earnings upswing.

Here's How to Wrangle JPMorgan, the '800-Pound Gorilla' of Banking

Brad Ginesin
May 27, 2022 1:27 PM EDT

The financial services giant just held its first investor day in three years -- let's open the vault and see what's inside.

As Zscaler Rallies, Charts Say the Stock Could Hit This Level Soon

Bruce Kamich
May 27, 2022 1:23 PM EDT

Here's how aggressive traders can play the cybersecurity name.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:58 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "The Tremendous Power of the Sell Button"
  • 02:46 PM EDT STEPHEN GUILFOYLE

    We're Shedding Some of This Holding on Strength

    Check out the Stocks Under $10 portfolio here!
  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login