Upcoming Ex-Dividend Dates: May 25-June 7, 2021 (2024)

This article was co-produced with James Marino Sr. of Portfolio Insight.

This article series provides a summary of upcoming ex-dividend dates of stocks in Dividend Radar, a weekly automatically generated spreadsheet listing dividend growth stocks with dividend streaks of five years or more.

Source: Created by the author

The ex-dividend date of stocks is usually set one business day before the record date, the cut-off date for determining which shareholders will receive the next dividend payment. If you buy a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller will receive the next dividend. If you buy the stock before the ex-dividend date, you will receive the dividend.

The following table presents a summary of ex-dividend dates for the next two weeks. The table is divided into sections by Ex-Div Date and sorted by Ticker for each date. Yrs are years of consecutive dividend increases, Yield is the new dividend yield for the market close Price on the date listed, and 5-yr DGR is the compound annual growth rate of the dividend over a 5-year period. Note that Payout is the dollar amount payable per share or unit on the Pay Date.

Previous Post: Upcoming Ex-Dividend Dates: May 18-31, 2021

High-Quality Candidates

DVK Quality Snapshots provide an elegant and effective way to assess the quality of dividend growth stocks. The system employs five quality indicators and assigns 0-5 points to each quality indicator, for a maximum quality score of 25 points.

We assigned quality scores to all Dividend Radar stocks with upcoming ex-dates and screened those with quality scores above 23, producing a shortlist of the highest-quality candidates.

Below, we present the quality scores, an assessment of fair value (whether Above, At, or Below fair value), and two measures of each stock's recent performance (1-year and 3-year trailing total returns [TTR]). Key metrics from the previous table are repeated here for convenience:

Source: Created by the authors from data in Dividend Radar and using DVK Quality Snapshots.

Dividend Radar views fair value as a range. All but one of the stocks this week are trading at premium valuations above fair value. LMT is the only exception, trading at a discount valuation.

For TTR, Dividend Radar provides 1-year and 3-year totals, adding the returns due to stock price appreciation (or depreciation) and dividend payments over each time frame. In the summary table, we highlight 3-year TTRs of 10% or higher in orange, and each 1-year TRRs that exceeds the 3-year TTR, in green (indicating stronger recent performance). All the shortlisted stocks this week have stronger recent performance!

We also color code the Yield and 5-yr DGR columns, preferring dividend yields above 2.5% and 5-year dividend growth rates of 10% or higher. Two of the shortlisted stocks offer yields above 2.5% (LMT, PEP), while three have double-digit percentage 5-year DGRs (HD, NKE, and UNP).

An Interesting Candidate

Ideally, we'd like to see green cells in each of the Fair Value, 1-yr TTR, Yield, and 5-yr DGR columns. That rarely happens, though, so we look for a candidate that offers the best metrics overall, at least based on our current investment objectives.

We previously focused on Union Pacific and PepsiCo, so let's consider Dividend Contender Lockheed Martin (LMT) today.

Founded in 1909 and headquartered in Bethesda, Maryland, LMT is a global security and aerospace company engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems. LMT operates through four segments, Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space Systems.

LMT is rated Excellent (quality scores 23-24):

The stock yields 2.69% at $387.22 per share and has a 5-year DGR of 9.7%.

Over the past 10 years, LMT outperformed the S&P 500 by a 2-to-1 margin, returning 579% versus the S&P 500's 284%:

Expanding the timeframe to the past 20 years, LMT's outperformance is even more impressive! Whereas the S&P 500 had total returns of 370%, LMT had total returns of 1,557%, a 4-to-1 margin!

Here is a chart showing LMT's dividend growth history through the end of 2020:

Source: Portfolio-Insight.com

LMT's dividend growth is a model of consistency, something dividend growth investors love to see! The stock's earnings growth chart is just as impressive:

The company's payout ratio of 49% is low for most companies, according to Simply Safe Dividends:

Source: Simply Safe Dividends

Let's now look at LMT's valuation. A quick way to estimate fair value is to divide the annualized dividend ($10.40) by the stock's 5-year average yield (2.60%). That results in a fair value [FV] estimate of $400 based on LMT's dividend yield history.

For reference, CFRA's FV is $342, Morningstar's FV is $436, Simply Wall St's FV is $460, and Finbox.com's FV is $497. My own fair value estimate of LMT is $412. The average of the six fair value estimates is $424. Given the stock's current share price of $387.22, it would imply that LMT is trading at a discount of about 9%.

Here are the most recent Seeking Alpha articles covering LMT, all Bullish:

• Lockheed Martin Or General Dynamics: Which Is A Better Buy? by Samuel Smith
• Lockheed Martin: Defense Budget Stable, Good Total Return, Steady Growing Dividend Income, by William Stamm
• Lockheed Martin Wins Development Contract Against Threats From Iran And North Korea, by Dhierin Bechai

Conclusion: LMT is a high-quality dividend growth stock trading at a 9% discount. Long-term investors should consider buying below $425 per share. For conservative investors, a buy below $383 would be more appropriate.

FerdiS