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
As we all know, the stock market is at an all time high. That is despite the fact that earnings for the US corporations have been flat for ...
As part of my portfolio monitoring process , I evaluate the list of dividend increases every week. It is helpful to monitor how my investmen...
The ultimate goals of everyone reading this site is to retire wealthy and to stay retired. Financial independence provides flexibility, fre...
Right now, many investors are sitting on huge unrealized gains in the companies they have bought years ago. I am in those shoes too. However...
Many of you are aware that I have been a big fan of tax-deferred investing over the past three – four years. After my awakening moment in l...
After observing market behavior for 20 years, I have come to the conclusion that many investors do not have a clue about how to make money i...
It seems like international investing is all the rage these days. It seems like everywhere I look, someone is recommending investors to add ...
I do not like it, when my dividend paying companies are acquisition targets. Last week, shares of Hershey (HSY) increased to an all-time ...
General Mills, Inc. (GIS) manufactures and markets branded consumer foods in the United States and internationally. It also supplies branded...
There are several guidelines about becoming a successful dividend investor. They are centered around several key points I am going to be dis...