Investors have typically concerned themselves about maximizing total returns over time. Total returns are the sum of capital gains and dividends received. Over the past two years markets have produced negative total returns to investors, which is especially troublesome for those who were planning to retire in the coming few years. Instead of focusing on total returns however, future retirees could focus on generating sustainable dividend income from their portfolios, which is much less volatile that capital gains. In fact, over the past decade dividends represented the only income that investors have generated in the markets. In essence, stockholders are “paid for waiting” until their portfolios rebound. Especially valuable are those dividend stocks that not only pay reliable dividends, but also raise them regularly. I have highlighted four such companies, which announced their intentions to reward stockholders with dividend raises:
RPM International Inc. (RPM), which operates as a food company in North America and internationally, increased its quarterly dividend by 2.5% to 20.50 cents per share. RPM International Inc. is a dividend aristocrat, which has raised distributions for 36 consecutive years in a row. The stock currently yields 4.30%.
ConocoPhillips (COP), which is the fourth largest integrated oil and gas company in US, increased its quarterly dividend by 6% to 50 cents per share. This is the ninth consecutive annual dividend increase for ConocoPhillips. The stock currently yields 3.80%.
ONEOK Partners, L.P. (OKS) engages in the ownership and management of natural gas gathering, processing, storage, and interstate and intrastate pipeline assets, as well as natural gas liquids (NGLs) gathering and distribution pipelines. This Master Limited Partnership increased its quarterly distributions by 0.9% to $1.09 per unit. ONEOK Partners has consistently raised distributions only since 2006. The MLP’s units currently yield 8.10%.
"The distribution increase reflects the benefit of our recently completed growth projects, which have increased our fee-based earnings, as well as an improved capital market environment," said John W. Gibson, chairman and chief executive officer of the general partner of ONEOK Partners. "As volumes behind these projects continue to ramp up, we anticipate additional opportunities to increase our distributions in the future."
Reynolds American Inc. (RAI), which operates as a food company in North America and internationally, increased its quarterly dividend by 5.9% to 90 cents per share. Despite the fact that Reynolds American Inc. is not a consistent dividend raiser, it has increased distributions by 132% over the past decade. The stock currently yields 7.70%.
ConocoPhillips (COP) looks like an interesting candidate to add to my watchlist. I would keep current on any events in the company and would look to initiate a position there on dips, provided that such opportunities arise.
Full Disclosure: Long RPM
- 29 stocks with sustainable dividends
- Dividend Aristocrats List for 2009
- Master Limited Partnerships (MLPs)
- Eight Dividend Increases in the news
The stock market is finally having the correction everyone has been waiting for since 2012. In the past month, the S&P 500 is down by 7...
The price of oil has declined a lot since the summer of 2014. The West Texas Intermediate (WTI) in Cushing, Oklahoma has declined from a hig...
I am often asked the following question in some variation: If I were starting a dividend portfolio today, and had a lump sum to put to work ...
It is not a secret that stock prices have been rising for 6 - 7 years in a row now. This makes it easy to hold on to stocks, and believe tha...
As someone who has been investing in, and writing about dividend paying companies for over seven years , I have accumulated a lot of observa...
As many of you know, I only invest my money in companies which pay dividends. I have made a lot of money that way , and I use dividends as a...
Note: I originally planned to post this article tomorrow, but in light of recent developments about Baxalta being in the process of being ta...
As an investor my goal is to attain financial independence using my dividend growth strategy. As a dividend investor, my goal is to generat...
I have been focusing on dividend growth investing for several years now. As such, I try to think about why it works, and also think about s...
Motif Investing is an established brokerage which lets investors create their own portfolios, and purchase them for a set commission. Each...