A company typically initiates a dividend when it plans on paying it for the long term. It is signaling to the market that its operations are steady and self-sufficient enough to start returning profits to loyal shareholders. The danger to a company that lowers or suspends its dividend is frequently a violent market reaction on the down side.
As more companies are seeing the first signs of the economic turnaround, the number of dividend increases is rising. It is particularly intriguing when companies, which had cut distributions during the crisis, are starting to raise them again.
Last week eleven companies announced their intentions to pay a higher dividend:
Texas Instruments (TXN) Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company announced that it will add $7.5 billion to its repurchase program and will also raise its quarterly dividend by 8% to 13 cents/share. The company has raised dividends for 7 consecutive years. This is in addition to the company’s $1.3 billion repurchase authorizations remaining at the end of its most recently competed quarter in June. Yield: 2%
"These actions are evidence of our company's ongoing commitment to return value directly to our shareholders," said Rich Templeton, Texas Instruments Chairman, President and Ehief Executive Officer.
YUM! Brands, Inc. (YUM), together with its subsidiaries, operates as a quick service restaurant company worldwide. The company raised dividends by 19% to 25 cents/share. The company has raised distributions for 7 consecutive years. Yield: 2.20%
Corporate Office Properties Trust (OFC) is a real estate investment trust (REIT) that engages in the acquisition, development, ownership, management, and leasing of suburban office properties. The company raised its quarterly dividend by 5.1% from 39.25 to 41.25 cents/share. This REIT is a dividend achiever and has raised distributions for 13 years in row. Yield: 4.40%
The Kroger Co. (KR) operates supermarkets in various formats in the US. The company increased its quarterly dividend by 10.50% to 10.50 cents/share. This was the fourth consecutive annual dividend increase since 2006, when the company initiated a dividend payment policy. Yield: 1.90%
International Bancshares Corporation (IBOC) is a banking holding company that provides commercial and retail banking services in south, central, and southeast Texas; and Oklahoma. The company raised its semi-annual dividend by 11.80% to 19 cents/share. This was the first increase since the company cut dividends by almost 50% in 2009. Yield: 4.40%
BioMed Realty Trust, Inc. (BMR) operates as a real estate investment trust (REIT) that focuses on providing real estate to the life science industry in the United States. The company raised its quarterly distribution by 13.30% to 17 cents/share. This was the fourth consecutive dividend increase since the company cut distributions in 2009. Yield: 3.70%
UDR, Inc. (UDR) is a real estate investment trust (REIT) that owns, acquires, renovates, develops, and manages middle-market apartment communities. The company raised its quarterly distribution by 2.80% to 18.50 cents/unit. This was the first distribution increase since the company cut distributions in 2009. Yield: 3.40% (analysis)
PACCAR Inc. (PCAR) and its subsidiaries design, manufacture, and distribute light-, medium-, and heavy-duty trucks and related aftermarket parts worldwide. The company raised distributions by 33% to 12 cents/share. This was the first dividend increase since the company cut dividends by 50% in 2009. Yield: 1.10%
LaSalle Hotel Properties (LHO), a real estate investment trust (REIT), engages in the purchase, ownership, redevelopment, and leasing of primarily upscale and luxury full-service hotels in convention, resort, and urban business markets in the United States. The company raised distributions by 1000% to 11 cents/share. This was the first distribution increase since the company cut distributions in 2008.Yield: 1.90%
Colony Financial, Inc. (CLNY) operates as a commercial mortgage REIT that focuses on acquiring and originating commercial real estate mortgage loans and real estate-related debt. The company raised its quarterly distribution by 19% to 25 cents/share. This was the third consecutive distribution increase this year for the REIT, which became public in 2009. Yield: 5.40%
Marsh & McLennan Companies, Inc. (MMC), a professional services company, provides advice and solutions in the areas of risk, strategy, and human capital. The company raised its quarterly dividend by 5% to 21 cents/share. This was the first dividend increase since 2008. Yield: 3.50%
I am placing the following companies on my watching for further research: Yum Brands (YUM) and Texas Instruments (TXN). I have a small position in Yum Brands (YUM), which seems to be doing very well in China, and I am looking to further add to my position on dips below $40. Last week I mentioned that tech stocks like Texas Instruments (TXN) might be changing their strategy to start paying higher dividends to shareholders. I would be researching TXN further in the future in order to evaluate whether it has a place in a dividend portfolio.
Full Disclosure: Long YUM
- Has the time for Tech Dividends arrived?
- Six things I learned from the financial crisis
- Why do I like Dividend Achievers
- 7 Dividend Stocks Raising Dividends and Returns
One way to monitor dividend growth investments is by checking the weekly list of dividend increases. I also find helpful to monitor the an...
While I am a buy and hold passive investor, I also try to regularly monitor the companies I own . I usually review the investments I have ma...
This is a guest post from Tawcan, who writes about dividend investing and financial independence on his blog at tawcan.com When it comes t...
Successful investing is simple. You live within your means, save money regularly and invest it. You buy a collection of quality businesses a...
As I explained in my article on my dividend retirement plan , I invest in blue chip dividend stocks which can afford increase dividends for...
The daily life of dividend growth investor Successful investors buy stock in companies which are within their circle of competence. This c...
This is a guest post written by Todd Wenning, CFA, who is an equity research analyst. Todd is the author of Keeping Your Dividend Edge: Str...
PepsiCo, Inc. (NYSE:PEP) manufactures, markets, and sells various foods, snacks, and carbonated and non-carbonated beverages worldwide. The ...
Diageo plc (DEO) produces, distills, brews, bottles, packages, and distributes spirits, beer, wine, and ready to drink beverages. This inter...
This is a guest post by Financially Integrated who writes about dividend investing, wealth creation and escaping the rat race. I have bee...