Stock Analysis: Archer Daniels Midland

This article originally appeared on The DIV-Net on 6 May 2015.

Founded in 1898 and headquartered in Chicago, Illinois, Dividend Champion Archer Daniels Midland Company (NYSE:ADM) is engaged in the processing of oilseeds, corn, wheat, cocoa, and other agricultural commodities. The company manufactures protein meal, vegetable oil, corn sweeteners, flour, and other value-added food and feed ingredients, as well as biodiesel and ethanol.

ADM is the Consumer Staples sector winner and 7^th ranked stock in the April 2015 edition of my 10 Dividend Growth Stocks article series. The company has an impressive 40-year streak of consecutive dividend increases and pays quarterly dividends of 28¢ per share in the months of March, June, September and December.

Monthly Review, April 2015

At the end of every month, I review my portfolio of dividend growth stocks and update my blog's Performance page.

In April 2015, I received dividend income totaling $412, an increase of 147% over last April's total dividend income of $167.

DivGro's market value increased to $149,697 and the portfolio is delivering an average yield on cost (YoC) of 4.32%. Projected monthly dividend income increased to $496 from $467 last month.

15 Dividend Increases, April 27-May 1, 2015

Includes: AHGP • APU • ARLP • AWK • BPL • ETP • GMLP • GWW • IBM • IVZ • PSA • STI • UGI • WFC • XOM

Dividend growth investors like to invest in companies that regularly increase their dividends and show confidence in their ability to grow earnings over time.

I monitor dividend increases for stocks on my watch list because I track the yield on cost (YoC) of holdings in DivGro, my portfolio of dividend growth stocks. Another reason to monitor dividend increases is to identify candidates for further analysis and for possible inclusion in DivGro.

In the past two weeks, 15 of the companies on my watch list announced dividend increases.

Recent Buy: Omega Healthcare Investors Inc

Apr 22, 2015: Bought 65 shares of OHI at $38.46 per share.

Omega Healthcare Investors Inc (NYSE:OHI) is a self-administered REIT (real estate investment trust) that invests in income-producing healthcare facilities located throughout the United States. The company provides lease or mortgage financing to healthcare operating companies, funding investments through loans under revolving credit facilities, from private or public offerings of debt or equity securities, or through secured indebtedness.

OHI is a Dividend Contender with a 13-year streak of consecutive dividend increases. It pays quarterly dividends of 54¢ per share in the months of February, May, August, and November.

18 Dividend Increases, April 13-24, 2015

Includes: CSX • ENLC • GLP • HEP • HFWA • JNJ • KMI • LAZ • LHO • MWE • NGLS • PFG • PG • SO • SPG • SSW • TRGP • TRV

I monitor dividend increases for stocks on my watch list to identify candidates for further analysis and for possible inclusion in DivGro, my portfolio of dividend growth stocks. Companies that regularly increase their dividends show confidence in future earnings growth potential.

Another reason I monitor dividend increases is that I track the yield on cost (YoC) of stocks in my portfolio. When dividends increase, I make YoC adjustments and update DivGro's projected annual dividend income, a measure of the incom e potential of the portfolio over the next 12 months.

In the past two weeks, 18 of the companies on my watch list announced dividend increases. Increases vary from 20% to as low as 1%.

Recent Buy: Qualcomm Inc

Apr 17, 2015: Bought 37 shares of QCOM at $68.01 per share.

Qualcomm Inc (NASDAQ:QCOM) designs, manufactures and markets digital communication products and services based on the company's CDMA digital technology. The company's products consist of integrated circuits and system software used in voice and data communications, networking, application processing, multimedia, and global positioning system products. QCOM was founded in 1985 and is headquartered in San Diego, California.

QCOM is the Information Technology sector winner and 2^nd ranked stock in the April 2015 edition of my 10 Dividend Growth Stocks article series. The company has a 13-year streak of consecutive dividend increases and pays quarterly dividends of 48¢ per share in the months of March, June, September and December.

Recent Buy: Cummins Inc

Apr 17, 2015: Bought 19 shares of CMI at $134.62 per share.

Founded in 1919 and headquartered in Columbus, Indiana, CMI (NYSE:CMI) is one of the leading designers and manufacturers of diesel engines. The company also produces natural gas engines and engine components and subsystems. CMI sells its products to original equipment manufacturers, distributors, and other customers worldwide. 

CMI is ranked 4^th in the April 2015 edition of my 10 Dividend Growth Stocks article series. It also is the Industrials sector winner. The company has a 9-year streak of consecutive dividend increases. It pays quarterly dividends of 78¢ per share in the months of March, June, September and December.

10 Dividend Growth Stocks For April 2015

Includes: ADM • CAH • CMI • CMP • CNP • CNQ • GPS • HOG • IBM • LAZ • MGA • MSFT • QCOM • VZ 

Every month, I use David Fish's CCC list and the accompanying spreadsheet to rank a selection of dividend growth stocks with the goal of identifying a small number of stocks for further analysis. The CCC list, which is updated monthly, contains all U.S.-listed stocks that have raised their dividends for at least 5 consecutive years. The latest list (dated 3/31/15) contains 690 stocks.

I apply a series of filters to trim the CCC list to a more manageable number. Because I have an ongoing goal to balance my DivGro portfolio across all 10 GICS (Global Industry Classification Standard) sectors, I'm careful to retain a minimum number of stocks per sector.

After ranking 66 stocks last month, I'm back to ranking 'only' 50 stocks. For each sector, I find 5 stocks with the lowest PEG ratio and 5 stocks with the lowest TTM P/E. To select the final 5 sector candidates, I use another heuristic, such as dividend yield.

Dividend Increases, March 23-April 10, 2015

Includes: ARG • FUL • GEL • HPQ • PAA • PNC • QCOM • SCS • WASH 

I monitor dividend increases for stocks in my watch list to identify candidates for further analysis and for possible inclusion in DivGro, my portfolio of dividend growth stocks. Companies that regularly announce dividend increases show confidence about future earnings growth potential.

As a dividend growth investor, I'm interested in companies that not only pay dividends, but those that pay growing dividends. The dividend growth rate is important. If the annualized dividend growth rate fails to match (or exceed) the rate of inflation, your investment would effectively shrink.

I find it interesting to consider the percentage increase of each dividend increase. In the past 3 weeks, 9 of the companies on my watch list announced dividend increases. Please see this Seeking Alpha article for details.

Quarterly Review, Q1-2015

Given a list of fairly challenging goals for 2015, I started the year at quite a pace! In this post I'll give an overview of activities in Q1-2015, the 9^th quarterly review I've done for DivGro.

Recently, I reported on reaching several milestones, including crossing 200,000 page views on DivGro and 150,000 page views on Seeking Alpha. Since joining Seeking Alpha in September 2014, I've published 11 original articles. And, on April Fools Day, my first article for The DIV-Net was published. (No joke!)

Updated Blogroll Page

Last year, I did an extensive overhaul of my blogroll page. In addition to adding links to many new blogs, I created a section in which I highlighted active blogs that were at least one year old at the time, providing a short description to tell readers what each highlighted blog is about.

The blogs on my blogroll page focus on dividend growth investing (DGI) and other forms of passive income generation, and many are about pursuing financial independence. I find it fascinating to scan the many blogs out there from time-to-time to see what others think about these topics. Sometimes, someone else's unique way of thinking spawns new ideas in my mind...

Because I find blogs with public portfolios particularly useful, I include a separate link to public portfolios on my blogroll page, marked with a ¶.

Monthly Review, March 2015

Every month, I review the past month's activities relating to DivGro, my portfolio of dividend growth stocks. At the same time, I update my blog's Performance page, which provides a central place for reviewing DivGro's status and performance relative to the markets and to prior months.

In March 2015, dividend income totaled $648, which is a new all-time record for monthly dividend income! In comparison, dividend income last March was $359. That represents an 81% year-over-year increase!

At the end of March, DivGro's market value was $144,151 and the portfolio is delivering an average yield on cost (YoC) of 4.35%. Projected monthly dividend income increased to $467 from $447 last month.

Recent Buy: Gap Inc.

This article originally appeared on The DIV-Net on 1 April 2015.

Mar 16, 2015: Bought 60 shares of GPS at $41.42 per share.

Gap Inc. (NYSE:GPS) is a global apparel retail company that offers apparel, accessories, and personal care products under the Gap, Banana Republic, and Old Navy brands, among others. The company operates in the specialty, outlet, online, and franchise channels. It has 375 franchise stores in 41 countries. GPS was founded in 1969, and is headquartered in San Francisco, California.

GPS is the Consumer Discretionary sector winner and top ranked stock in the March 2015 edition of my 10 Dividend Growth Stocks article series. The company has an 11-year streak of consecutive dividend increases. It pays quarterly dividends of 23¢ per share in the months of January, April, July and October.

Recent Buy: Realty Income Corp

Mar 16, 2015: Bought 50 shares of O at $50.67 per share.

Known as The Monthly Dividend Company®, Realty Income Corporation (NYSE:O) is an equity real estate investment trust dedicated to providing shareholders with dependable monthly income. The company earns income from more than 4,300 properties owned under long-term lease agreements with regional and national retail chains and other commercial tenants. Realty Income was founded in 1969 and is headquartered in San Diego, California.

Realty Income is a Dividend Contender with a streak of 22 years of consecutive dividend increases. In fact, as of 03/16/2015, the company has a track record of 70 consecutive quarterly increases with a compound average annual dividend growth rate of about 5%. Shareholders of record on 04/01/15 will receive a dividend of 18.95¢ per share. Annualized, the monthly dividends equate to $2.274 per share. At my buy price of $50.67, Realty Income yields 4.49%.

To see my reasons for buying Realty Income, please read this Seeking Alpha article.

More Milestones

About a year ago, I wrote a milestones post in which I reported reaching 40,000 page views and 100 posts in DivGro. I also reported crossing $200 in projected monthly dividend income and having published my first 1,000 page view post. Today, I'd like to give updates on these milestones and show what a difference one year makes...

I wrote my first DivGro post on 10 January 2013. The post you're reading is number 201! It has been quite a journey for me, committing to writing a blog about something I knew very little about – and then sticking to it for 27 months. I've learned a tremendous amount in this time, not only in the preparation needed to write posts, but also in reading the blogs of fellow dividend growth investors.

Dividend Increases, March 8-20, 2015

Includes: APD • GIS • IBOC • O • RTN • WPC • XLNX

I report on dividend increases for stocks in my watch list to identify candidates for further analysis and for possible inclusion in DivGro, my portfolio of dividend growth stocks. Companies pay increasing dividends if they are confident about future earnings growth potential.

As a dividend growth investor, I'm interested in companies that not only pay dividends, but those that pay growing dividends. The dividend growth rate is important. If the annualized dividend growth rate fails to match (or exceed) the rate of inflation, your investment would effectively shrink. I find it interesting to consider the percentage increase of each dividend increase. It tells me a lot about a company's commitment and ability to reward shareholders.

In the past two weeks, 7 of the companies on my watch list announced dividend increases. Increases vary from less than 1% to over 10%. Please read this Seeking Alpha article for details.

Recent Buy: T. Rowe Price Group Inc

Mar 16, 2015: Bought 30 shares of TROW at $83.40 per share.

Founded in 1937 and based in Baltimore, Maryland, T. Rowe Price Group Inc (NASDAQ:TROW) is a financial services holding company that provides global investment management services to individual and institutional investors in the sponsored T. Rowe Price mutual funds and other investment portfolios, as well as through variable annuity life insurance plans.

TROW is a Dividend Champion with an impressive 29-year streak of consecutive dividend increases. It pays quarterly dividends of 44¢ per share in the months of January, April, July and October.

10 Dividend Growth Stocks For March 2015

Includes: ADM • ARLP • BBL • GPS • JNJ • MIC • MSFT • NJR • NOV • PFG • QCOM • RS • TU

David Fish's CCC list is a wonderful resource for dividend growth investors. The list is updated monthly and contains all U.S.-listed stocks that have raised their dividends for at least 5 consecutive years. The latest list (dated 2/27/15) contains 663 stocks, with 105 Dividend Champions (25 or more years), 249 Dividend Contenders (10-24 years), and 309 Dividend Challengers (5-9 years).

Ranking all the stocks in the CCC list would be a daunting task. To simplify things, I apply a series of filters to reduce the CCC list to a more manageable number. Because I have an ongoing goal of balancing my DivGro portfolio across all 10 GICS (Global Industry Classification Standard) sectors, I'm careful to retain a minimum number of stocks per sector.

This month, I ranked 66 stocks using my proprietary ranking system based on fundamental analysis and the dividend discount model. To see this month's top 10 stocks by rank and the 10 sector winners, please read this Seeking Alpha article. 

Dividend Increases, February 23-March 6, 2015

Includes: ALB • AVIV • BNS • CNQ • ETN • GD • HMN • IPCC • NATL • OHI • PNY • ROIC • RY • SWX • UFS • WR

Companies that regularly increase their dividends show confidence in future earnings growth potential. I monitor dividend increases for stocks on my watch list to identify candidates for further analysis and for possible inclusion in DivGro, my portfolio of dividend growth stocks.

Another reason I monitor dividend increases is that I track the yield on cost (YoC) of stocks in my portfolio. When dividends increase, I make YoC adjustments and update DivGro's projected annual dividend income, a measure of the income potential of the portfolio over the next 12 months.

In the past two weeks, 15 companies on my watch list announced divided increases, which vary from 20% to as low as 2%. Please read this Seeking Alpha article for details.

Monthly Review, February 2015

Every month, I review the past month's activities relating to DivGro, my portfolio of dividend growth stocks. At the same time, I update my blog's Performance page, which provides a central place for reviewing DivGro's status and performance relative to the markets and to prior months.

At the end of February, DivGro's market value was $145,167. Projected monthly dividend income increased to $447 from $434 last month. The portfolio is delivering an average yield on cost (YoC) of 4.58%. I collected $358 in dividend income, which represents an increase of 254% over last February's dividend income of $101.

Recent Buy: AT&T

Feb 2, 2015: Bought 75 shares of T at $33.21 per share.

Incorporated on October 5, 1983 and based in Dallas, Texas, AT&T Inc (NYSE:T) is a holding company providing telecommunications services in the United States and internationally. Services include wireless communications, local exchanges, long-distance services, data/broadband and internet services and many other services.

AT&T is a Dividend Champion with a track record of 31 consecutive years of dividend increases. The company pays quarterly dividends of 47¢ per share in the months of February, May, August and November.

Recent Buy: Caterpillar

Feb 2, 2015: Bought 30 shares of CAT at $79.64 per share.

Caterpillar, Inc. (NYSE:CAT) was founded in 1925 and is headquartered in Peoria, IL. CAT manufactures construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. It provides technology for construction, transportation, mining, forestry, energy, logistics, electronics, financing and electric power generation.

CAT is a Dividend Contender with a track record of 21 consecutive years of dividend increases. It pays quarterly dividends of 70¢ per share in the months of February, May, August and November.

Dividend Increases, February 9-20, 2015

Includes: ADI • ALV • BPL • CCE • CMP • D • GPC • HAS • KMB • KO • LLL • NEE • NHI • NWE • OMI • SBSI • SCG • SRE  • STR • TROW
 • UPS • XEL • WMB • WMT

I monitor dividend increases for stocks on my watch list because it is a convenient way to identify dividend growth candidates. Companies that regularly increase their dividends show confidence in future earnings growth potential.

Another reason I monitor dividend increases is that I track the yield on cost (YoC) of stocks in my DivGro portfolio. When dividends increase, I make YoC adjustments and update DivGro's projected annual dividend income, a measure of the income potential of the portfolio over the next 12 months.

In the past two weeks, 24 of the companies on my watch list announced dividend increases. Increases vary from 20% to as low as 1%. Please read this Seeking Alpha article for details.

Recent Buy: Helmerich & Payne

Feb 2, 2015: Bought 41 shares of HP at $62.31 per share.

Headquartered in Tulsa, Oklahoma, HP is an energy-oriented company engaged in contract drilling of oil and gas wells. The company was incorporated under the laws of the State of Delaware on February 3, 1940. The company's existing fleet includes 338 U.S. land rigs, 36 international land rigs and 9 offshore platform rigs.

HP is a Dividend Champion with a track record of 42 consecutive years of dividend increases. It pays quarterly dividends of 69¢ per share in the months of March, June, September and December.

Monthly Review, January 2015

Every month, I review the past month's activities relating to DivGro, my portfolio of dividend growth stocks. At the same time, I update my blog's Performance page, which provides a central place for reviewing DivGro's status and performance relative to the markets and to prior months.

At the end of January, DivGro's market value was $120,827. Projected monthly dividend income increased to $434 from $407 last month. The portfolio is delivering an average yield on cost (YoC) of 4.57%. I collected $332 in dividend income, representing an increase of 174% over last January's dividend income of $121.