In the world of investing, there are thousands of companies that pay dividends. While companies do not have any control on their stock prices, they do have full control over the rate and frequency of dividend distributions that they pay to shareholders. Some of the strongest companies in the world, also happen to generate a lot in excess cashflow. As a result they have managed to increase distributions consistently like clockwork for many years.
One such company is McDonald’s Corporation (MCD), which together with its subsidiaries, operates as a worldwide foodservice retailer. Over the past week the company raised its dividend by 11% to 61 cents/share. This was the 34th consecutive year of dividend increases for the company, which is a member of the elite dividend aristocrats index. Yield: 3.25% (analysis)
The company’s CEO said: "Our ongoing financial performance reflects the strength of the McDonald's system and resilience of our Plan to Win. We remain committed to maintaining financial discipline and enhancing shareholder value. Our first priority is to reinvest in our business by allocating capital where we expect to drive sales and cash flow, generating strong returns. After these investment opportunities, we expect to return all of our free cash flow to shareholders over the long term through dividends and share repurchases. Today's dividend increase demonstrates our confidence in the long-term strength of our Brand."
Another company, which has consistently raised dividends for several years includes Lockheed Martin Corporation (LMT) engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the United States and internationally. The company recently raised its quarterly dividend by 19% to 75 cents/share. The company has raised dividends for 8 consecutive years. Yield: 4.10%
Other companies which are in the process of building a long streak of dividend increases and also announced hikes in their dividend payouts include:
The First of Long Island Corporation (FLIC) operates as the holding company for The First National Bank of Long Island that offers various financial services to individual, professional, corporate, institutional, and government customers primarily in Nassau and Suffolk Counties, Long Island; and Manhattan. The company boosted its quarterly payout by 10% to 22 cents/share. This was the fourth annual consecutive increase since 2007. Yield: 3.50%
Covidien plc (COV) develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. The company raised its quarterly dividend by 11% to 20 cents/share. This was the second consecutive annual dividend increase for the company. Yield: 2.00%
Sanderson Farms, Inc. (SAFM), an integrated poultry processing company, engages in the production, processing, marketing, and distribution of fresh, frozen, processed, and prepared chicken products in the United States. The company raised its quarterly dividend by 13.30% to 17 cents/share. This was the second consecutive annual dividend increase since 2009. Yield: 1.60%
ConAgra Foods, Inc. (CAG) operates as a food company in North America and internationally. It operates in two segments, Consumer Foods and Commercial Foods. The company raised its quarterly dividend by 15% to 23 cents/share. This was the second consecutive annual dividend increase for the company. Yield: 4.20%
Microsoft Corporation (MSFT) develops, manufactures, licenses, and supports a range of software products and services for various computing devices worldwide. The software company raised their quarterly dividend by 23 percent to 16 cents/share. This was the first dividend increase since 2008. Yield: 2.60% (analysis)
Arlington Asset Investment Corp.(AIZ) invests in mortgage-related assets. Arlington Asset Investment Corp.(AIZ) declared a 71.4% increase in its quarterly dividend to 60 cents/share. Since 2005 the company has decreased its dividend regularly, which doesn’t make it a suitable investment to dividend growth investors. Yield: 11.70%
Invesco Agency Securities Inc. (IVR) operates as a mortgage real estate investment trust. The company raised its quarterly dividend by 35% to $1/share. The company has paid a fluctuating dividend since going public in 2009. Yield: 17.50%
Of the stocks mentioned in this article, I find both McDonald’s (MCD) and Lockheed Martin Corporation (LMT) to be attractively valued at the moment. However I would need at least two more years of dividend increases, before I add Lockheed Martin (LMT) to my dividend portfolio. I would consider adding to my position in McDonald’s (MCD) over the next few months when I have available funds and if my asset allocation allows it.
As for Microsoft’s (MSFT) dividend increase, I am not too excited about it. Several other large cap tech stocks have recently announced their intent to either initiate a dividend or pay higher dividends. Whether tech companies, which were the craze during the late 1990’s stock bubble, could afford to raise dividends for several years in a row, is yet to be seen.
Full Disclosure: Long MCD
- Has the time for Tech Dividends arrived?
- Microsoft (MSFT) Dividend Stock Analysis
- McDonald’s Corporation (MCD), a must own dividend stock
- Why Dividend Growth Stocks Rock?
Investors who are looking for quality stocks that regularly raise dividends have several lists available as a starting point in their ...
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections...
I have highlighted below several frequently asked questions about dividend investing. This is not an all inclusive list, but more of a runn...
There are many misconceptions about dividend investing. I have tried itemizing several of them, outlining them, and providing a brief comm...
Every dollar that you have in your possession can be traced back to you exchanging your labor for money. The labor you provided was essentia...
Motif Investing is an established brokerage which lets investors create their own portfolios, and purchase them for a set commission. Each...
There are four key attributes that need to be considered, in order to be successful at dividend investing. These ingredients include focusin...
My investing goals are very simple – to cover my expenses from dividend income generated from my portfolio. In order to translate goals in...
There are two schools of thought when it comes to dividend reinvestment. One of the options is to automatically reinvest dividends , wherea...
I have been writing about dividend growth investing since January 2008. I often get asked questions by readers. Many of those questions in...