Dividend Investing is more than just selecting stocks that pay dividends. Successful dividend investing is about selecting stocks with strong fundamentals, which not only generate enough cash to reinvest in the growth of the business, but also generate excess cash to pay a rising payment over time. On his 2009 letter to shareholders, Warren Buffett mentioned that ” the best businesses by far for owners continue to be those that have high returns on capital and that require little incremental investment to grow”. Most dividend growth stocks have exactly the same characteristics.
The stocks which raised distributions last week include:
Wal-Mart Stores, Inc. (WMT) operates retail stores in various formats worldwide. The company raised its annual dividend by 11% to $1.21/share. Walmart is a dividend aristocrat which has increased its dividend every year since its first declared dividend of $0.05 per share in March 1974. This dividend aristocrat currently yields 2.20%. (analysis)
WGL Holdings, Inc. (WGL) engages in the delivery and sale of natural gas, and provides energy-related products and services in the District of Columbia, Maryland, Virginia, and Delaware. The company increased its quarterly dividend by 2.70% to 37.75 cents/share. This is the 34th consecutive annual dividend increase for this dividend champion. The stock currently yields 4.50%.
General Dynamics Corporation (GD) provides business aviation; combat vehicles, weapons systems, and munitions; shipbuilding design and construction; and information systems, technologies, and services worldwide. The company increased its quarterly dividend by 10.50% to 42 cents/share. This is the 17th consecutive annual dividend increase for this dividend achiever. The stock currently yields 2.30%.
Myers Industries, Inc. (MYE) manufactures and distributes polymer products for industrial, agricultural, automotive, commercial, and consumer markets, primarily in North America, Central America, and South America. The company increased its quarterly dividend by 8% to 6.5 cents/share. This dividend achiever has raised distributions for almost two decades. The stock yields 2.60%.
Canadian Natural Resources Limited (CNQ) engages in the exploration, development, and production of crude oil and natural gas. The company increased its quarterly dividend by 42.90% to 0.15 Canadian dollars/share. This international dividend achiever has boosted distributions since the year 2000. The stock currently yields only 0.80%.
QUALCOMM Incorporated (QCOM) engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. The company boosted its payout by 12% to 19 cents/share and announced a new 3 billion dollar stock buyback
program. The company has raised distributions since 2003. The stock currently yields 2%.
American Greetings Corporation (AM), together with its subsidiaries, engages in the design, manufacture, and sale of greeting cards and other social expression products worldwide. The company boosted distributions by 17% to 14 cents/share. This is the first quarterly increase since 2008, despite the fact that the company’s annual dividend has been on the rise since 2006. The stock yields 3.20%.
I continue to be bullish on Wal-Mart (WMT), despite its low current yield. I believe that it is an excellent business which has a strong competitive advantage. I would be a buyer on any dips to $50.
Full disclosure: Long WMT
- Dividends versus Share Buybacks/Stock repurchases
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