At Reaves, we believe one signal of a company’s strength and the durability of its future earnings is the pace of dividend growth. Each quarter, we post the annual rate of change in the quarterly dividend payment for each stock held in our Long Term Value Strategy1.
Of the 25 stocks owned as of 12/31/23, 20 increased their dividend from a year ago (including T-Mobile US which paid the first dividend in the company’s history) and four maintained the same payment. The weighted average dividend increase of 13.3% was skewed higher by the 100% increase in Constellation Energy’s dividend. The adjusted increase, excluding Constellation, was 6.8%.
Our view is that the recent dividend growth exhibited by these companies is an indicator of their potential to compound earnings and dividends in the future, which aligns with the objectives of this investment strategy. Please don’t hesitate to contact us with any questions about this data or our Long Term Value investment strategy.