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30 Dividend Champions of 2021 (Part II)

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·4 min read
In this article:
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This is the second part of our three-part series titled 30 Dividend Champions of 2021. You can also go directly to Top 5 Dividend Champions of 2021 (Part II).

20. Lincoln Electric Holdings (NASDAQ: LECO)

Dividend Yield: 1.75%

Ohio-based Lincoln Electric recently joined the list of dividend champions. The company makes welding equipment, arc welding equipment, welding consumables, plasma and oxy-fuel cutting equipment. Recently, investment firm Baird gave bullish comments for the stock amid rising demand and increasing momentum, especially in the first half of 2021. The firm raised LECO price target to $140.

As of the end of the third quarter, 30 hedge funds tracked by Insider Monkey held stakes in LECO.

dividend champions 2021
dividend champions 2021

sirtravelalot/Shutterstock.com

19. Chubb Ltd (NYSE: CB)

Dividend Yield: 1.88%

Switzerland-based insurance company Chubb Ltd (NYSE: CB) is one of the top 30 dividend champions of 2021. The company has increased its dividend consecutively over the last 27 years. Earlier in February, the company boosted its share repurchase program by $1 billion to a total authorization of $2.5 billion. The company also surpassed the Wall Street estimates for the fourth quarter of 2020.

A total of 45 hedge funds tracked by Insider Monkey were long CB stock at the end of the September quarter, up from 40 funds a quarter earlier.

In their Investor Letter, Fiduciary Management highlighted a few stocks and Chubb Ltd (NYSE:CB) is one of them. Here is what Fiduciary Management stated:

"Description

Chubb is one of the largest publicly traded property and casualty (P&C) insurance companies globally. In aggregate, the company has operations in 54 countries and territories. Chubb provides commercial, personal property, casualty, personal accident, and supplemental health insurance to a diverse group of clients. Approximately 63% of premiums are from the U.S., 13% from Europe/Eurasia and Africa, 11% from Asia, 7% from Latin America, and 6% from Bermuda and Canada. By product, the mix is Commercial P&C 55%, Personal Lines 21%, Accident & Health/Life 17%, Agriculture 5%, and Reinsurance 2%. The Chubb brand is probably best known as the leading provider of insurance to high net worth individuals.

Good Business

• Chubb is a durable, differentiated multi-line insurer with an attractive small and middle market commercial book of business, as well as a respected high net worth personal lines customer base.

• For medium to larger-sized commercial enterprises, casualty insurance is a necessity coverage. This nondiscretionary attribute, along with Chubb’s emphasis on high service levels, results in strong customer retention and predictable revenues. The company’s renewal retention ratio generally ranges between 85 to 90% (it was 95% in 2019 for major accounts).

• Chubb’s disciplined risk selection and cycle management has led to conservative initial loss picks, underwriting stability, and a consistent return on equity (ROE).

• Over the past ten years the company’s underwriting combined ratio is 7.6% better than the industry.

• Operating expenses are over 4% lower than large cap peers.

• The company presently generates a 14% return on tangible equity. Incremental returns on invested capital are attractive.

• Chubb currently maintains industry-low balance sheet leverage metrics across the three most important indicators of net premiums to shareholder’s equity (0.6 times), invested assets to shareholder’s equity (2.0 times), and debt-to-total capital (22%). The company’s investment portfolio is purposefully “plain vanilla.”

• The investment portfolio duration is four years with an average credit quality of A/Aa.

18. Polaris Industries (NYSE:PII)

Dividend Yield: 2.02%

The motorcycle and snowmobile manufacturer became a dividend champion in 2020. The company beat the Wall Street estimates for the fourth quarter amid a 24% growth in retail sales. Adjusted gross margin in the period improved 95 bps year over year to 25.6%.

As of the end of the third quarter, 29 hedge funds tracked by Insider Monkey were bullish on Polaris.

17. Essential Utilities Inc (NYSE: WTRG)

Dividend Yield: 2.09%

Pennsylvania-based Essential Utilities provides drinking and wastewater management services in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana and Virginia. The company recently reaffirmed non-GAAP EPS guidance for 2020. The company expects the metric to be at the top end of the guidance range of $1.53-$1.58. For full-year 2021, the company expects EPS to total in the range of $1.64 to $1.69.

16. Artesian Resources Corporation Class A (NASDAQ: ARTNA)

Dividend Yield: 2.58%

Delaware-based water services company Artesian has raised its dividend for 28 consecutive years. This dividend champion has a yield of 2.58%. In November, the company posted its Q3 GAAP EPS of $0.54. Revenue in the period jumped by 9.7% and reached $24.74 million. At the end of September, Jim Simons’ Renaissance Technologies reported a $14.96 million stake in the company.

Click to continue reading and see the Top 5 Dividend Champions of 2021 (Part II).

Or go to 30 Dividend Champions of 2021 (Part I).

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Disclosure: None. 30 Dividend Champions of 2021 (Part II) is originally published at Insider Monkey.