Dividend growth investing involves the selection of companies based on a set of criteria such as valuation, strong brands, strong competitive advantages and long histories of annual dividend increases. It is not about chasing high yielders today, but more about finding the right stock that would grow distributions over time, and thus provide investors with inflation protection in their income. Only companies with strong business models are able to increase dividends every year for long stretches of time. Dividend investors should take the time to study these success stories as they unfold in front of their eyes and even consider adding some to their dividend portfolios.
Over the past week, the following consistent dividend payers announced plans to hike distribution payouts to shareholders. These companies have a dividend culture which encourages sharing profits with shareholders. The companies raising distributions include:
Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company raised its quarterly distributions by 6.90% to 62 cents/share. This marked the 49th consecutive annual dividend increase for this dividend champion. Yield: 2.60% (analysis)
General Dynamics Corporation (GD), an aerospace and defense company, provides business aviation; combat vehicles, weapons systems, and munitions; military and commercial shipbuilding; and communications and information technology products and services worldwide. The company raised its quarterly distributions by 8.50% to 51 cents/share. This marked the 21st consecutive annual dividend increase for this dividend achiever. Yield: 2.90% (analysis)
Piedmont Natural Gas Company, Inc. (PNY), an energy services company, engages in the distribution of natural gas to residential, commercial, industrial, and power generation customers in portions of North Carolina, South Carolina, and Tennessee. The company raised its quarterly distributions by 3.40% to 30 cents/share. This marked the 34th consecutive annual dividend increase for this dividend champion. Yield: 3.70% (analysis)
QUALCOMM Incorporated (QCOM) designs, develops, manufactures, and markets digital telecommunications products and services. The company raised its quarterly distributions by 16.30% to 25 cents/share. This marked the 10th consecutive annual dividend increase for the company. Yield: 1.70%
Equity LifeStyle Properties, Inc. (ELS) is a publicly owned real estate investment trust (REIT) that engages in the ownership and operation of lifestyle oriented properties. The company raised its quarterly distributions by 16.70% to 43.75 cents/share. This marked the 9th consecutive annual dividend increase for the company. Yield: 2.50%
Canadian Natural Resources Limited (CNQ) engages in the exploration, development, production, marketing, and sale of crude oil, natural gas liquids, and natural gas. The company raised its quarterly distributions by 16.70% to 10.50 cents/share. This marked the 12th consecutive annual dividend increase for this international dividend achiever. Yield: 1.20%
Full Disclosure: Long CL
Monday, March 12, 2012
Six Dividend Growth Stocks Offering Positive Feedback to Shareholders
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1 comment:
Their is a single overwhelming fact about successful value investing and that is you must buy decent companies with very low price to sales ratios to have a high probability of making a lot of money buying value stocks their is no other way believe me. And what is a very low price to sales ratio. First let me explain very clearly to everyone what a low price to sales ratio is. The price to sales ratio is the market cap of a stock compared to the sales that the company of the stock does on a annual basis. In other words the company I talk about below has a market cap' which is all the shares of the company issued and outstanding of just eight billion dollars. But the comapny does fiftyfive billion dollars in annual sales. In other words the market is valuing bunge at just eight billion dollars but the company does fiftyfive billion dollars in annual sales get the idea. Ok one other thing never forget this warren buffett could never have made the enormous returns buying value stocks unless he was buying value stocks with very low price to sales ratios period' and I am almost certain if you asked him he would totally agree. Bear in mind I would not say something that I cannot back up believe me. I will give an example of a company of really decent quality that I consider really undervalued. The company is Bunge Limited symbol {BG} engages in the agriculture and food businesses worldwide. The stock currently trades around 59 dollars a share. I think the stock could easily get to 450 dollars a share over the next five years. Yes you heard it right four hundred and fifty dollars a share. Assuming their are not stock splits. And what do I base this on If the companies profit margain expands from around 1.75% to 4% over the next five years and if the sales of the company expand from 54 billion to 85 billion thats growth of about 7 or 8 percent a year and if the companies stock than trades at a price earnings ratio of about 20. That would put the price of the stock at 450 dollars a share. It could even be more than 450 dollars a share if you reinvest your dividends the company pays a dividend also if the company does a share buyback this could increase the value of the stock even more. Keep in mind that their are stocks that are popular that trade at much higher price earnings ratios than 20 times earnings one example is whole foods market it currently trades at 35 times earnings. Also keep in mind that bunge is a company of really decent quality not at all a high risk stock. It has the potential to leave a company like Mcdonald's in the dust. I understand your skepticsm if you are reading this but go to any stock broker or financial planner CPA that knows how to value stocks and they will confirm everything that Im saying here.
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