As a dividend investor, I purchase quality companies with solid competitive advantages, which can afford to raise dividends for many consecutive years. My holding period is theoretically forever, as long as the companies I own do not cut or eliminate their distributions. As a result my fortunes are closely linked with the underlying fundamentals of the business. If the business does well, I would keep getting paid. If my investments throw off enough income, there is no need to worry about short-term fluctuations in the stock price. Last Thursday’s action in the market, where stock indices fell by 10% in a matter of a few minutes, only to recover most of it a few minutes later, was a strong cause against relying on price returns for living off your portfolio. Focusing on market movements every few seconds is something that should be left to the sophisticated computer trading algorithms operated by investments banks on Wall Street. Dividend investing is more than relevant today, as it is one of the few strategies for main street investors to help them focus on the big picture and build wealth in the process.
During what was a turbulent week in the markets, several companies expressed enough confidence in their long-term prospects to boost distributions.
RLI Corp. (RLI), through its subsidiaries, underwrites property and casualty insurance primarily in the United States. The company raised its quarterly dividend from $0.28 to $0.29/share. This is the 36th consecutive annual dividend increase for this dividend champion. The stock yields 2.10%.
Cardinal Health, Inc. (CAH) provides health care products and services primarily in the United States. The company raised its dividend by 11% to 21.50 cents/share. This dividend achiever has consistently raised distributions for 21 consecutive years. The stock yields 2.20%.
Franklin Electric Co., Inc., (FELE) together with its subsidiaries, engages in the design, manufacture, and distribution of groundwater and fuel pumping systems. The company’s Board boosted its quarterly dividend from $0.125 to $0.13/share. The company is a member of the dividend achievers index, having raised distributions for 18 consecutive years. The stock yields 1.40%.
Talisman Energy Inc., (TLM) an upstream oil and gas company, engages in the exploration, development, production, transportation, and marketing of crude oil, natural gas, and natural gas liquids primarily in North America, the United Kingdom, Scandinavia, and Southeast Asia. The company raised its semi-annual dividend by 11% to 12.50 cents/share. This is the eighth consecutive annual dividend increase for this international dividend achiever. The stock yields 1.30%.
Molson Coors Brewing Company (TAP) brews, markets, sells, and distributes beer brands. The Board of Directors increased the quarterly dividend on its Class A and Class B common shares by 16.7 percent, or $0.04, to $0.28 per share. This is the third consecutive annual dividend increase for the brewer since 2008. The stock yields 2.50%.
Fifth Street Finance Corp. (FSC) is a fund managed by Fifth Street Capital LLC specializing in mezzanine investments. The company’s Board of Directors declared a cash dividend of $0.32 per share for the third fiscal quarter of 2010, an increase of 6.7% from the previous fiscal quarter and its third consecutive increase in the quarterly dividend. The stock yields 9.70%.
Textainer Group Holdings Limited, (TGH) through its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of intermodal containers worldwide. The company’s board of directors increased distributions by 4.30% to 24 cents/share. The stock yields 4.20%.
TECO Energy, Inc., (TE) through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy in Florida. The board of directors approved a 2.50% increase in distributions to 20.50 cents/share. The stock yields 4.90%.
Yamana Gold Inc. (AUY) engages in the acquisition, exploration, development, and operation of gold properties. The company announced an increase of 50% to its quarterly dividend from $0.01 to $0.015. The stock yields only 0.60%, which is typical for gold producers.
JMP Group Inc., (JMP) through its subsidiaries, operates as an investment banking, asset management, and corporate credit management company in the United States. The company raised its quarterly dividends by 50% to 1.50 cents/share. The stock yields 0.80%.
Cognex Corporation (CGNX), together with its subsidiaries, provides machine vision products that capture and analyze visual information to automate tasks, primarily in manufacturing processes. The company raised dividends by 20% to 6 cents/share. The stock yields 1.10%.
Biovail Corporation (BVF), a specialty pharmaceutical company, engages in the development and commercialization of pharmaceutical products used in the treatment of specialty central nervous system disorders. The Board of Directors increased the Company’s quarterly dividend by 5.5% to $0.095 per share. The stock yields 2.30%.
Cablevision Systems Corporation (CVC), through its subsidiaries, operates as a telecommunications, media, and entertainment company. The company raised its quarterly dividend from $0.10 to $0.125 per share. The stock yields 2.10%.
Union Pacific Corporation (UNP) has approximately 32,094 route miles linking Pacific Coast and Gulf Coast ports with the Midwest and eastern United States gateways, and provides several corridors to Mexican gateways. The company’s board of directors approved an increase in the quarterly dividend on the company’s common shares by 22 percent to $0.33 per share. The stock yields 1.80%.
Occidental Petroleum Corporation (OXY), together with its subsidiaries, operates as an oil and gas exploration and production company primarily in the United States. The company increased its quarterly dividend by 15% to $0.38 cents/share. Occidental has raised dividends for eight consecutive years. The stock yields 1.90%.
Public Storage (PSA) operates as a real estate investment trust (REIT) that engages in the acquisition, development, ownership, and operation of self-storage facilities in the United States and Europe. The company raised its quarterly dividend to $0.80 per share. The stock yields 2.70%.
Full Disclosure: None
- Living off dividends in retirement
- The right time to sell dividend stocks
- Dividend Investors are getting paid for waiting
- Four notable dividend increases
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