Monday, January 16, 2012

Eight Dividend Increases for Long-Term Investors

Warren Buffett describes the stock market’s short term fluctuations as a voting machine, by tallying up which firms are popular and which are not. However, in the long-term the market is a weighting machine, where the fundamental strength of the companies is being evaluated. What truly matters in the long run is how well will the company execute its long term strategy in order to keep generating the rising earnings to pay higher distributions over time. As a long term investor I keep a close eye on the long-term performance of the companies I own stock in. I do however ignore daily noise about market fluctuations, news about the economy or even the recent news about Europe. I keep focusing on the long term picture and sticking to my retirement strategy of buying dividend stocks with rising distributions.


The long-term holders of the following eight companies got one step closer to financial independence, after their investments announced plans to increase distributions:

Genesis Energy, L.P. (GEL), together with its subsidiaries, operates in the midstream segment of the oil and gas industry in the Gulf Coast area of the United States. The master limited partnership raised its quarterly distributions by 2.90% to 44 cents/unit. Genesis Energy has increased distributions for 8 years in a row. Yield: 6.10%

Plains All American Pipeline, L.P. (PAA) engages in the transportation, storage, terminalling, and marketing of crude oil, refined products, and liquefied petroleum gas and other natural gas-related petroleum products (LPG) in the United States and Canada. It operates in three segments: Transportation, Facilities, and Supply and Logistics. The master limited partnership raised its quarterly distributions by 3% to $1.025/unit. Plains All American Pipeline has increased distributions for 11 years in a row. Yield: 5.60%

Pentair, Inc. (PNR) operates as a diversified industrial manufacturing company worldwide. The company raised its quarterly dividend by 10% to 22 cents/share. This dividend champion has increased distributions for 37 years in a row. The ten year dividend growth rate is 8.60% per year. Yield: 2.40%

Shaw Communications Inc. (SJR), a diversified communications company, provides broadband cable television, Internet, digital phone, telecommunications, and satellite direct-to-home services primarily in Canada and the United States. The company raised its monthly dividend by 5.40% to 8.08 CAD cents/share. Shaw Communications has increased distributions for 10 years in a row. Yield: 4.90%

Alliant Energy Corporation (LNT) operates in electric and gas utility businesses in the United States. The company raised its quarterly dividend by 5.90% to 45 cents/share. Alliant Energy has increased distributions for ten years in a row. Unfortunately for long-term holders, the current dividend is still below the record 50 cents/share paid in 2002. Yield: 4.20%

Omega Healthcare Investors, Inc. (OHI) operates as a real estate investment trust (REIT) in the United States. The company invests in healthcare facilities, principally long-term healthcare facilities in the United States. The company raised its quarterly dividend by 2.50% to 41 cents/share. This increase represents a 10.80% increase over the Q1 2011 distribution. Omega Healthcare Investors has increased distributions for ten years in a row. Unfortunately for long-term holders, the current dividend is still below the record 70 cents/share paid in 1999. Yield: 8.20%

Watsco, Inc. (WSO), together with its subsidiaries, distributes air conditioning, heating and refrigeration equipment, and related parts and supplies in the United States. The company raised its quarterly dividend by 8.80% to 62 cents/share. Watsco has increased distributions for 12 years in a row. Yield: 3.70%

Robbins & Myers, Inc. (RBN), together with its subsidiaries, engages in the design, manufacture, and marketing of engineered, application-critical equipment and systems for the energy, industrial, chemical, and pharmaceutical markets worldwide. The company raised its quarterly dividend by 11.10% to 5 cents/share. Robbins & Myers has increased distributions for 6 years in a row. Yield: 0.40%

Full Disclosure: None

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3 comments:

  1. I started reading your blog about 2 months ago and I think it's great, thank you! I would be interested in your thoughts on owning MLP's in retirement accounts (Roth IRA for example).

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  2. "daily noise about market fluctuations" makes it sound like you're ignoring information that could speak to long-term trends. I mean that's how they start out, right?

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  3. Technically speaking, the credit for the short term voting machine/long term weighing machine goes to Buffett's mentor, Ben Graham.

    I need Money- yes that is how some things start out, but the vast majority of it is worthless information that doesn't change a company. therefore, the correct approach (according to this way of thinking) is to primarily ignore it, unless it's actually material regarding the company. for example, if a company all of the sudden loses it's monopoly on a specific industry or product line, that will generate initial noise, but may be worth looking into selling a position if you think it fundamentally affects (or effects?) the long term prospects. bear in mind, then, that this is not just "buy and hold"; it's "buy and monitor"

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