Monday, April 20, 2009

Procter & Gamble (PG) – a reliable dividend aristocrat

There has been an interesting trend in mainstream financial media to portray most dividends as unsustainable. This is further fueled by statistics from Standard & Poors, which shows that dividends are being cut at the fastest pace since 1955, and rumors about the shrinking universe of dividend growth stocks. Enterprising investors who look past those fearing statistics and view it as a contrarian buy signal would find a lot of consistent dividend raisers who keep on delivering good results to shareholders. After all, companies which have increased dividends for more than a quarter of a century have a sound cash flow management policy in place which has the shareholders best interest in mind, as opposed to empire building at all costs, excessive management bonuses and wasting stockholder value on unprofitable projects.

One such company, which, despite the current financial meltdown, continues business as usual, is Procter & Gamble. Other companies which show their confidence in their ability to grow earnings and generate enough cash in the future include Enterprise Products Partners L.P. (EPD), H.B. Fuller Company (FUL), People's United Financial (PBCT) and
Anworth Mortgage Asset Corporation (ANH).

Procter & Gamble (PG), which engages provides branded consumer goods products worldwide, announced a 10% raise in its quarterly dividend to $0.44 per share. Procter & Gamble is a dividend aristocrat, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 53 consecutive years. The stock currently yields 3.50%. Check out my analysis of Procter & Gamble (PG). I would consider adding on to my P&G stake as long as the stock is below $59.

Enterprise Products Partners L.P. (EPD), a master limited partnership, which provides services to producers and consumers of natural gas, natural gas liquids (NGL), crude oil, and petrochemicals, raised its quarterly distributions to $0.5375 per unit. This represents the 28th distribution increase since Enterprise’s initial public offering in 1998 and its 19th consecutive quarterly increase. This midstream MLP currently yields 9.50%.

H.B. Fuller Company (FUL), which manufactures and markets adhesives and specialty chemical products worldwide, boosted its quarterly dividend by 3% to $0.068 per share. H.B. Fuller Company is a dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 40 years. The stock currently yields 1.50%.

People's United Financial (PBCT), which provides commercial banking, retail and small business banking, and wealth management services to individual, corporate, and municipal customers, raised its quarterly dividend from $0.15 to $0.1525 per share. People's United Financial has rewarded its shareholders with an uninterrupted streak of increased dividends for 15 consecutive years. The stock currently yields 3.50%.

Anworth Mortgage Asset Corporation (ANH), a real-estate investment trust that invests primarily in United States agency mortgage-backed securities issued or guaranteed by United States government Anworth Mortgage Asset Corporation sponsored entities, such as Fannie Mae or Freddie Mac, boosted its quarterly dividend to $0.30 per share. The stock currently yields 18.20%.

I continue seeing dividend aristocrats raising dividends in 2009. Master Limited Partnerships are another bright sector for dividend increases. It is also interesting to see financial companies such as People's United Financial and Anworth Mortgage Asset Corporation raising payouts.

Full Disclosure: Long PG

Relevant Article:

- Procter & Gamble (PG) Dividend Stock Analysis
- Why do I like Dividend Aristocrats?
- Master Limited Partnerships (MLPs)
- Why do I like Dividend Achievers

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