Monday, August 16, 2010

Six Notable Dividend Increases for the week

Few companies have managed to raise dividends for several consecutive years in a row. For example there are fewer than 300 companies listed on US exchanges which have raised distributions for more than one decade. Of particular interest to many dividend investors are companies which are able to raise earnings, which fuels future dividend growth. As a result, investors in those companies have much better chances of generating an income stream which meets or exceeds the rate of inflation.

The most notable companies that raised dividends last week include:

Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus (Aflac), provides supplemental health and life insurance. The company raised its quarterly dividend by 7.10% to 30 cents/share. The company also announced today its intent to resume share repurchase activities. This dividend aristocrat has raised dividends for 28 consecutive years. Yield: 2.50% (analysis)

Aflac is an example that a company does not need to raise dividends every year, in order for it's annual dividend payment to increase. The quarterly dividend was last raised in the first quarter of 2009, and remained unchanged for the next seven quarters. The annual dividend still increased, mostly helped by the most recent dividend increase.



Questar Corporation (STR), a natural gas-focused energy company, through its subsidiaries, engages in the gas and oil exploration and production, midstream field services, energy marketing, interstate gas transportation, and retail gas distribution businesses. The company increased quarterly dividends by 7.70% to 14 cents/share. This was the 31st consecutive annual dividend increase for this dividend aristocrat. Yield: 3.30%

Parker-Hannifin Corporation (PH) manufactures fluid power systems, electromechanical controls, and related components. The company raised quarterly dividend by 3.80% to 27 cents/share. This was the second dividend increase this year. This dividend champion has raised dividend for 54 years in a row. Yield: 1.70%

Connecticut Water Service, Inc. (CTWS), through its subsidiaries, operates as a regulated water company in Connecticut. It operates in three segments: Water Activities, Real Estate Transactions, and Services and Rentals. The company raised its quarterly dividend by 2.20% to 23.25 cents/share. This dividend champion has increased dividend payments for each of the last 41 years. Yield: 4.30%

The Scotts Miracle-Gro Company (SMG), together with its subsidiaries, manufactures, markets, and sells lawn and garden care products primarily in North America and the European Union. The company raised its quarterly dividend by 100% from $0.125 to $0.25/share. Yield: 2.10%
Textainer Group Holdings Limited (TGH), through its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of intermodal containers worldwide. The company raised its quarterly dividend by 4.20% to 25 cents/share. This was the first dividend increase since 2008. Yield: 3.60%

Torchmark Corporation (TMK), through its subsidiaries, provides individual life and supplemental health insurance products, and annuities to middle income households. The company raised its quarterly dividend by 6.70% to 16 cents/share. The company has raised dividends since 2005. The company, which was one of the original dividend aristocrats, was removed from the index in 1996. Yield: 1.30%

Full Disclosure: Long AFL

This article was included in the The Wealth Builder Carnival #3

Relevant Articles:

- Aflac (AFL) Dividend Stock Analysis
- Financial Stocks for Dividend Investors
- Twelve Dividend Stocks in the news
- Why Dividend Growth Stocks Rock?

3 comments:

  1. DPI, here's a question for you, when one builds a dividend portfolio with a long term horizon, should one consider putting stop/loss orders if the stock market goes real bad like in 2009?

    On one hand, getting out of the market for a few month makes sense, especially if a stock can be bought again with a steep discount a few weeks later.

    On the other hamd, staying the course has some benefits as well especially if dividends are re-invested, more shares are bought when the stock trades for much less.

    ReplyDelete
  2. I never really thought of Scotts, as an investment, but I can easily rationalize why it's a great dividend payer. Yield is not too high by any means, 2.10%; safe.

    ReplyDelete
  3. Steve,

    I don't put stop losses. Even great stocks like MCD or WMT could go down in price when the rest of the market is being sold off. If fundamentals are sound, then having a stop loss might trigger a sell signal at the wrong time possible, generating extra commissions and paper work at tax year end for you. If you sell using a stop loss, how do you decide when to buy back? If the fundamentals are sound, I would add back when prices are low and getting lower.
    If you know how to sell and then buy lower, then stop losses might work for you.

    FC,

    SMG is notable because it raised dividends by 100%. It does need a history of consistent dividend increases however

    ReplyDelete

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