Twelve companies last week raised distributions. While this is positive news in comparison to the avalanche of dividend cuts that were occurring just a few months ago, it is important that investors dig deeper into the numbers before they find out the next big thing.
The initial screening criteria for investing whether recent dividend increases are worth your time should focus on fundamentals such as earnings per share growth and dividend payout ratio. Next investors should focus on number of years of consecutive dividend increases as well as adequate starting dividend yield.
The companies which rewarded investors with dividend raises include:
Sysco Corp. (SYY), which markets and distributes a range of food and related products primarily to the foodservice industry in the United States, increased its quarterly dividend by 4.2% to 25 cents per share. Sysco Corp. is a dividend champion, which has increased its quarterly dividend in each of the past 39 years. The stock currently yields 3.60%. (analysis)
Intel Corporation (INTC), which designs, manufactures, and sells integrated circuits for computing and communications industries worldwide increased its quarterly dividend by 12.5% to 15.75 cents per share. Intel Corporation has only raised dividends with some consistency since 2003. The stock currently yields 2.90%. Paul Otellini, the company’s president and CEO seemed especially bullish saying that "Intel's industry-leading product portfolio, outstanding execution and focus on the next wave of innovation and growth set the company up solidly for the future. With one of the highest dividend yields in the technology industry, the dividend increase is another sign of our confidence in business prospects going forward."
Lancaster Colony Corporation (LANC), which engages in the manufacture and marketing of consumer products in the United States, increased its quarterly dividend by 5.3% to 30 cents per share. This marked the forty seventh consecutive annual dividend increase for this dividend champion. The stock currently yields 2.30%.
Brown-Forman (BF-B), which engages in the manufacture, bottling, import, export, and marketing of alcoholic beverage brands, increased its quarterly dividend by 8% to 14 cents per share. Brown-Forman is a dividend champion which has increased its quarterly dividend in each of the past twenty six years. The stock currently yields 2.30%.
NSTAR (NST), which engages in the distribution, transmission, and sale of energy in Massachusetts, increased its quarterly dividend by 6.7% to 40 cents per share. NSTAR has increased its quarterly dividend for 11 years in a row. The stock currently yields 4.70%.
Harsco Corporation (HSC), which provides industrial services and engineered products worldwide, increased its quarterly dividend by 2.5% to 20.5 cents per share. This marked the sixteenth consecutive year of annual dividend increases for this dividend achiever. The stock currently yields 2.50%.
PennantPark Investment Corporation (PNNT), which is a publicly listed business development firm specializing in direct and mezzanine investments in middle market companies, increased its quarterly dividend by 4.2% to 25 cents per share. PennantPark Investment Corporation has only been public since 2007 and thus does not have a long history of consistent dividend increases. The stock currently yields 11.80%.
Royal Gold, Inc. (RGLD), which acquires and operates precious metals royalties, increased its quarterly dividend by 13% to 9 cents per share. Royal Gold, Inc has increased its quarterly dividend since 2004. The stock currently yields only 0.60%.
Universal Health Services, Inc. (UHS), which owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers, increased its quarterly dividend to 10 cents per share. This is the first dividend increase for Universal Health Services, Inc. since the company started paying one in 2003. The stock currently yields 0.50%.
NIKE, Inc. (NKE), which designs, develops, and markets footwear, apparel, equipment, and accessory products worldwide, increased its quarterly dividend by 8% to 27 cents per share. NIKE, Inc. has increased its quarterly dividend in each of the past eight years. The stock currently yields 1.60%.
Bob Evans Farms, Inc. (BOBE), which owns and operates Bob Evans Restaurants and Mimi’s Cafes in the United States, increased its quarterly dividend by 12.5% to 18 cents per share. The stock currently yields 2.40%.
The Laclede Group, Inc. (LG), which natural gas service to approximately 630,000 residential, commercial, and industrial customers in metropolitan St. Louis and surrounding counties in eastern Missouri, increased its quarterly dividend from 38.5 to 39.5 cents per share. This is the sixth consecutive dividend increase for The Laclede Group, Inc. The stock currently yields 4.90%.
As dividend investors, the goal is to find the best dividend stocks available. This initial screen’s purpose is to weed out cyclical companies which could start out paying a very small dividend relative to earnings and increase it for a long period of time, while earnings are stagnant over the period.
Full Disclosure: Long SYY
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