Showing posts with label dividend news. Show all posts
Showing posts with label dividend news. Show all posts

Friday, September 17, 2010

Has the time for Tech Dividends arrived?

The problem with tech stocks is that few have a "wide-moat". Many are subject to rapid technology obsolescence, which causes them to re-invest most of their earnings back into the business just so they could maintain their share in the market. Most large cap tech stocks have hoarded billions of dollars in cash on the balance sheets, which sits idly or is used to overpay for companies with strategic patents in bidding wars for tech dominance.

Given all of the above, it is not at all surprising that few technology stocks have traditionally paid dividends. After the burst of the dot-com bubble however, many tech companies have started to pay dividends to their investors, many of which are probably still sitting on large unrealized losses. Examples of that include Microsoft (MSFT), Qualcomm (QCOM) and Oracle (ORCL). Cisco Systems (CSCO) is the latest large-cap name in the technology sector to announce their intent to pay a dividend by July 2011. Typically, companies that initiate a dividend tend to perform well over the months after the first payment. For Cisco investors, this small dividend would provide some return on their investment, which has been mostly flat since 2002. Whether Cisco will be able to grow the dividend is yet to be seen however.

Other tech bellwethers such as Intel (INTC) however have been paying a dividend since 1992, and have been regularly increasing it with the exception of 2002 and 2003. The company has still managed to generate outstanding growth in revenues and earnings over the period it paid dividends. Intel Corporation designs, manufactures, and sells integrated circuits for computing and communications industries worldwide. The company yields 3.40%, trades at a P/E of 11.20 and has an adequately covered dividend.

Another tech stock paying dividends is big-blue. IBM (IBM) has paid a dividend ever since 1911. International Business Machines Corporation (IBM) develops and manufactures information technology (IT) products and services worldwide. The company yields 2%, trades at a P/E of 10.60 and has an adequately covered dividend. (analysis)

Microsoft (MSFT) initiated a dividend policy in 2003, and also paid a onetime special $3 dividend in 2004. The company started raising dividends almost immediately, although it hasn’t raised distributions since 2003. If the 4Q 2010 dividend payment is not increased, the company’s would lose on its 6 year streak of consecutive annual dividend increases, which would have placed it on track to achieve a dividend achiever status in three years. The stock yields 2.10% and has a P/E of 12 (analysis)

Most large cap tech stocks still seem to prefer stock buybacks to dividends. Intel (INTC) has shrunk the amount of shares outstanding from 6.73 billion in 2000 to 5.52 billion in 2009. IBM has shrunk the amount of shares outstanding from 1.75 billion in 2000 to 1.31 billion in 2009. Microsoft (MSFT) has reduced the amount of shares outstanding from 10.76 billion in 2001 to 8.76 billion in 2010. The issue with buybacks is that they generally tend to be initiated and maintained when companies are flush with cash and as a result of higher earnings stock prices are high. During recessions companies end up eliminating their stock buyback programs, in an effort to conserve cash. In retrospect the companies end up spending shareholders money at overvalued stock prices, and stopping their buyback programs when prices are low. Another reason for buybacks is that they tend to mask the dilution of shareholders by options exercised by management at favorable prices. In addition to that, if managers are evaluated on earnings per share, they would have a better incentive to retire as much stock as possible. This would help them to increase earnings per share, even if total earnings are flat.

For shareholders to receive a consistent return on investment and to unlock the value of the cash rich balance sheets of tech companies, they should demand dividends. Dividends would provide them with an annual return, which is less volatile and more stable that relying on price increases alone. In addition to that, this is would provide another incentive for shareholders to keep holding onto their shares, which have probably gone nowhere over the past decade.

Full Disclosure: None

- Myths about Warren Buffett
- Dividends are Powering Up the Tech Sector
- Dividends versus Share Buybacks/Stock repurchases
- Microsoft (MSFT) Dividend Stock Analysis

Friday, October 2, 2009

The return of the financial dividends

The financial crisis lead to dividend cuts amongst several prominent dividend payers such as Bank of America (BAC), US Bancorp (USB) and BB&T Corp. (BBT). Over the past few weeks however, several financial companies announced that they might reconsider their current dividend policies and start raising distributions in the near future.

US Bancorp’s (USB) CEO is reviewing the company’s dividend payout, after it paid off $6.6 billion in TARP money back to the US Treasury."You will see us take action in the near-term that will be favorable," to the dividend, the company’s CEO said. The company cut dividends in March by 88% and is currently paying a quarterly dividend of 5 cents/share.

BB&T’s (BBT) President and CEO Kelly King informed shareholders the bank will "revist dividend level as soon as appropriate". The company cut its dividend by 68% in May 2009 in order to be able to repay the US Treasury. In addition to that the Winston-Salem, North Calorila based banking institution sold $1.5 billion in stock.

JP Morgan’s (JPM) CFO was a little less optimistic about the future dividend prospects of his company, citing that the company’s goal is to restore dividend only if economy doesn't "double dip". Despite the fact that he is still cautious on restoring the dividend, the CFO said the bank could raise its dividend to $0.75-$1.00/share. The company cut its dividend by 87% to 5 cents/share in February 2009.

Analysts are also expecting Pfizer (PFE) to increase dividends as well in the near future. Deutsche Bank analysts expect Pfizer Inc to increase its dividend in December. Deutsche Bank sees an increase of 15 percent to 25 percent. Pfizer cut its dividend by 50% in January in an effort to conserve cash in order to pay for its acquisition of Wyeth (WYE).

While I am generally very skeptical about companies which cut distributions, I view companies that begin raising distributions within a year of the cut very positively. It is too early to get excited about the companies listed above however. As long as they fail to actually increase distributions by sending bigger checks to shareholders, then the prospect of them raising dividends is a pure speculation.

Full disclosure: None

- BB&T Corporation (BBT) Stock Dividend Analysis
- Should you sell after a dividend cut?
- Is Pfizer (PFE) a value trap for investors?
- US Bancorp (USB) cuts its dividend by 88%

Monday, July 27, 2009

MLPs Dominate Distribution Increases

Checking the pulse of dividend increases is an exercise whose goal is to uncover potential dividend growth plays that I might have otherwise missed out on. Another reason for that is to refute the idea that dividend investing is dead. It is also interesting to look for trends in the data, while browsing through the list of dividend increasers. While the REITs have been slaughtered along with other financials, Master Limited Partnerships and consumer staples have done pretty well. But just because I wrote about a certain stock, does not mean that I am going to add it to my portfolio. I need to research it and make sure that it could afford growing its generous distributions.

Stanley Works (SWK), which a diversified worldwide supplier of security solutions for commercial applications as well as tools and engineered solutions for professional, industrial, construction and do-it-yourself use, increased its quarterly dividend by 3.1% to 33 cents a share.
The comment by Chairman and Chief Executive Officer John F. Lundgren was particularly bullish: "We remain very focused on the total return we deliver to shareholders and know that our dividend is a key component. We are proud to not only have maintained our dividend during this challenging period, but to raise it for the 42nd consecutive year in the face of this tumultuous economic environment."
This dividend aristocrat currently yields 3.40%.

Besides Stanley Works, several MLPs also raised distributions over the past week. Master Limited Partnerships have kept distribution increases despite the credit crunch, which is why many dividend investors are flocking this sector. MLPs offer both appealing current yields but stable and growing distributions. Not all MLPs are created equal however; the most stable ones are engaged in transportation of oil or natural gas.

El Paso Pipeline Partners, L.P. (EPB), which engages in the ownership and operation of natural gas transportation pipelines and storage assets, announced that its Board has approved a 1% increase over the last quarterly distribution of 32.50 cents per unit. The new distribution rate is 33 cents/unit. This is the 6th consecutive distribution increase for El Paso Pipeline Partners, L.P. since it went public in 2007. The units currently yield 7.00%.

TC PipeLines, LP (TCLP), which transports natural gas from the western Canada Sedimentary Basin (WCSB) to various downstream markets in the United States, increased its quarterly distributions by 3.5% to 73 cents per unit. This is the tenth consecutive year where TC PipeLines, LP has increased its distributions. The units currently yield 7.50%.

Holly Energy Partners, L.P. (HEP), a master limited partnership which operates a system of refined product and crude oil pipelines, storage tanks, and distribution terminals primarily in west Texas, New Mexico, Utah, and Arizona, raised its quarterly distributions to 78.50 cents per unit, a 1.30% increase over last quarters distribution of 77.50 cents. This is the 19th consecutive quarterly distribution for Holly Energy Partners, L.P. The units currently yield 9.00%.

Suburban Propane Partners, L.P. (SPH), announced that its Board of Supervisors declared the 22nd increase in the Partnership's quarterly distribution from $0.815 to $0.825 per Common Unit. This master limited partnership engages in the distribution of propane, fuel oil, kerosene, diesel fuel, gasoline, and refined fuels, as well as marketing of natural gas and electricity in deregulated markets. Suburban Propane Partners, L.P.. is a dividend achiever, which has increased its quarterly distributions in each of the past eleven years. The units currently yield 7.60%.

Sunoco Logistics Partners L.P. (SXL), declared a cash distribution for the second quarter of 2009 of $1.04 per common partnership unit, which is a 2.5 percent increase over the prior quarter. The partnership engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States.. Sunoco Logistics Partners L.P has regularly increased its quarterly distributions since 2002. The partnership currently yields 7.60%.

Western Gas Partners, LP (WES), declared a cash distribution of $0.31 per unit for the second quarter of 2009, representing an increase of $0.01 per unit over the prior quarter. Western Gas Partners, LP is a growth-oriented Delaware limited partnership formed by Anadarko Petroleum Corporation (APC) to own, operate, acquire and develop midstream energy assets. The partnership currently yields 7.20%.

Several companies, which are not MLPs, also raised distributions:

Park Electrochemical Corp. (PKE) increased its quarterly dividend by 25% to 10 cents per share. The company develops, manufactures, markets, and sells digital and radio frequency/microwave printed circuit materials for the telecommunications and Internet infrastructure, and computing markets; in addition to composite materials and parts for the aerospace markets. Park Electrochemical Corp. does not follow a pattern of regular dividend increases. In addition to that the stock currently yields 1.70%.

Lindsay Corporation (LNN) increased its quarterly dividend by 7% to 8 cents per share. Lindsay Corporation manufactures and sells automated agricultural irrigation systems that enhance or stabilize crop production while conserving water, energy, and labor. It operates in two segments, Irrigation and Infrastructure. The company started to regularly raise distributions in 2003. The stock currently yields 0.80%.

CARBO Ceramics Inc. (CRR), which engages in the manufacture and supply of ceramic proppant primarily used in the hydraulic fracturing of natural gas and oil wells, raised its quarterly dividend by 6% to 18 cents per share. This dividend increase represents the ninth consecutive year the company increased its dividend to shareholders. The stock currently yields 1.90%.

Full Disclosure: None

Relevant Articles:

- Master Limited Partnerships (MLPs)
- Which Bank will be next? Follow the dividend cuts
- Why do I like Dividend Aristocrats?
- Dividend Aristocrats keep raising their dividends

Monday, July 6, 2009

Dividend News: A Few Increases, More Expected in July

Dividends are getting a bad reputation from everywhere. First it was the dividend guts at big banks like Citigroup, Bank of America, and Lehman Brothers, which once were reliable dividend growth stocks that triggered a wave of cuts and suspensions across the board. The Standard & Poors recently announced that a record low companies increased dividends in 2Q. According to their report, the number of dividend cuts has increased to the highest since 1957. While it is easy to feel pessimistic after those not so positive headlines, one has to remember that there still are many companies, which keep raising their distributions. Companies, that raise distributions when others are slashing or eliminating theirs, citing “unfavorable conditions”, are the true champions where investors should look into concentrating their efforts. Several companies raised their distributions over the past week:

General Mills (GIS), which manufactures and markets branded and packaged consumer foods worldwide, approved a 9% increase to its quarterly dividend to 47 cents per share. General Mills is a former dividend aristocrat, which has fought back to regain its status in the elite dividend index since 2004. The stock currently yields 3.20%.

Senior Housing Properties Trust (SNH), which owns independent and assisted living communities, nursing homes, rehabilitation hospitals, wellness centers and medical office buildings throughout the United States, increased its quarterly distributions by 1 cent to 36 cents per share. Senior Housing Properties has increased its annual dividend in each of the past eight years. The stock currently yields 8.80%.

MFA Financial, Inc. (MFA) announced that its board has approved a 13.6% increase in its quarterly dividend from $0.22 to $0.25 per share. The company primarily invests in mortgage-backed securities (MBS) that include hybrid and adjustable-rate MBS (ARM-MBS). The dividend is pretty volatile, ranging from a low of 5 cents a share in 2005 and 2006 to a high of 32 cents in 2002. The current yield is 14.70%.

Despite the slow week for dividend increases, I am looking forward to a relatively busy July, since historically some well-known dividend aristocrats like Walgreen (WAG) and Stanley Works (SWK) tend to raise their dividends during the current month.

Walgreen (WAG) has raised its dividend every July over the past five years. This dividend growth stock has been raising dividends for 34 consecutive years and has a 5-year dividend growth rate of 21.30%.

Stanley Works (SWK) has raised its dividend every July over the past five years. This dividend growth stock has been raising dividends for 41 consecutive years and has a 5-year dividend growth rate of 4.20%.

Disclosure: None

Relevant Articles:

- High Yielding Companies boosting distributions
- Realty Income (O) and Medtronic (MDT) Boosting Distributions
- Target (TGT) and Clorox (CLX) confident in raising dividends
- Dividends and Stock Buybacks in the news

Monday, June 29, 2009

High Yielding Companies boosting distributions

While some investors viewed Petsmart’s 233% dividend raise as extremely important, I found the increases from several high yield stocks to be very intriguing as well. First of all, as a dividend growth investor my goal is to generate a double digit yield on cost after years of consistent dividend increases by the companies I have included in my portfolio. But what if I could purchase dividend stocks that already spot double-digit dividend distributions? Regular readers of my blog know that I do not like chasing high yielding stocks blindly. My experience with American Capital (ACAS), which suspended its dividend is a lesson that will never be forgotten. Despite the fact that the company recently announced a dividend of $1.07/share in order to maintain its status of a business development company, 90% of which would be paid in additional shares and the rest in cash, the company faces troubles with its creditors.
Two of the companies that raised distributions, American Capital Agency Corp. and Hatteras Financial Corp. have fluctuating dividend payments. The other one, Prospect Capital has raised distributions for 19 consecutive quarters. Most of these distributions consist of earnings and returns of capital. Companies could only afford paying such distributions by selling additional stock and raising more money by selling additional debt in order to grow and sustain operations.
The double digit current yields, also show investors pricing in a high probability of a dividend cut.

Well let’s look at last weeks dividend increases first:

Hatteras Financial Corp. (HTS), which invests in adjustable-rate and hybrid adjustable-rate single-family residential mortgage pass-through securities guaranteed or issued by the United States Government agency, or by the United States Government-sponsored entity, boosted its quarterly distributions to $1.10 per share. This represents a 4.8% increase for this real estate investment trust compared to its previous distribution. Hatteras Financial Corp. has a fluctuating dividend payment, which has ranged between $0.75 and $1.05 per share. The stock currently yields 15.90%.

Duke Energy (DUK), which operates as an energy company in the Americas, raised its quarterly dividend to 24 cents per share, which represented an increase of $0.01 over the previous level. It appears that Duke Energy has regularly increased its quarterly dividend since 2005, accounting for spinning off its natural gas transmission and storage business into Spectra Energy in 2007. The stock currently yields 6.60%.

American Capital Agency Corp. (AGNC), which invests in agency securities for which the principal and interest payments are guaranteed by a U.S. Government agency, increased its quarterly dividend to $1.50 per share, up from the previous distribution of $0.85/share. The stock currently yields 25.40%.

Prospect Capital Corporation (PSEC), which is a closed-end investment company that lends to and invests in private and microcap public businesses, increased its quarterly dividend to 40.625 cents per share. This dividend marks Prospect Capital's 19th consecutive quarterly increase. The company’s investment objective is to generate both current income and long-term capital appreciation through debt and equity investments. The stock currently yields 16.90%.

PetSmart, Inc. (PETM), which provides products, services, and solutions for pets in North America., increased its quarterly dividend by a staggering 233% to 10 cents per share. The company’s Board of Directors also authorized a $350 million stock purchase plan that expires in January 2012. PetSmart, Inc. initiated a dividend payment policy in 2003 at 2 cents/share. The company has increased its dividend only once , in 2004 to 3 cents/share and kept it unchanged since, until the most recent increase. The stock currently yields 1.90%.

Darden Restaurants Inc. (DRI), which engages in the ownership and operation of full-service restaurants in the United States and Canada, increased its quarterly dividend by 25% to 25 cents per share. Darden Restaurants Inc has consistently increased its quarterly since 2005. The stock currently yields 3.10%.

As usual there’s not free lunch on Wall Street. Thus, before getting too excited about the high yielding dividend raisers from last week, research them carefully and make sure you understand how their business model works. In a market where cash is king, relying on the capital markets to fund growth could turn very expensive if done at the wrong moment.

Full Disclosure: None

Relevant Articles

- High yield stocks for current income
- Dividend Cuts - the worst nightmare for dividend investors
- Don’t chase High Yielding Stocks Blindly
- General Motors (GM) bankruptcy trade
- ACAS Dividend News

Monday, June 22, 2009

Realty Income (O) and Medtronic (MDT) Boosting Distributions

Several companies expressed their confidence in their future business prospects, by raising their dividends. One of them was Realty Income (O), which engages in the acquisition and ownership of commercial retail real estate properties in the United States. The monthly cash dividend was increased to $0.142375 per share from $0.1420625 per share. This represents the 6th increase for the past year. Tom A. Lewis, Chief Executive Officer of Realty Income, commented, "We are pleased that, despite challenging economic conditions, our operations allow us to once again increase the amount of the dividend we pay to our shareholders. With the payment of the July dividend we will have made 468 consecutive monthly dividend payments."
Realty Income calls itself The Monthly Dividend Company(R), since it has declared 468 consecutive common stock monthly dividends throughout its 40-year operating history and increased the dividend 54 times since Realty Income's listing on the New York Stock Exchange in 1994. The monthly dividend is supported by the cash flow from over 2,300 retail properties owned under long-term lease agreements with leading regional and national retail chains. Check my analysis of Realty Income (O). This dividend achiever currently yields 7.70%.

Medtronic, Inc. (MDT), which develops, manufactures, and markets medical devices worldwide, approved a 9% increase in its quarterly dividend to 20.50 cents per share. In addition to that the company also approved an increase in its Share Repurchase Plan, authorizing Medtronic to purchase an additional 60 million shares of its common stock, which represents 5.4% of the company’s outstanding stock issued. Medtronic, Inc. is a dividend champion, which has increased its quarterly dividend for thirty one consecutive years. The stock currently yields 2.20%.

John Wiley & Sons, Inc. (JW.A) and (JW.B), which publishes print and electronic products that provide content and solutions, raised its quarterly dividend for A and B shares to 14 cents per share. This action represented an almost 8% increase in comparison to the previous dividend payment. This was the 16th annual dividend increase for this dividend achiever. The stock currently yields 1.50%.

Del Monte Foods Company (DLM), which engages in the production, distribution, and marketing of branded food and pet products for the retail market in the United States, announced that its board of directors has approved a 25% increase in its quarterly dividend to 5 cents per share. This is the first dividend increase for Del Monte Foods Company since it initiated its dividend policy in 2006. The stock currently yields 1.80%.

Annaly Capital Management, Inc. (NLY), which engages in the ownership, management, and financing of a portfolio of investment securities, increased its quarterly dividend by 20% to 60 cents a share. The dividends that Annaly Capital Management, Inc. pays are volatile and have ranged between 10 cents/share in 2005 to 68 cents/share in 2002. The stock currently yields 13.80% based off the past three payments and the new quarterly distribution.

Screening the news for potential additions to my dividend growth portfolio didn’t unveil any new hidden gems except for Realty Income (O), which was on my Best High Yield Dividend Stocks for 2009 list.

Full Disclosure: Long O

Relevant Articles:

- Realty Income (O) Dividend Analisys
- Dividend Conspiracies
- Why do I like Dividend Achievers
- Best High Yield Dividend Stocks for 2009

Monday, June 1, 2009

Dividend Investors Running With the bulls

The stock market index S&P 500 has risen by 37.8% from its lows in early march. The S&P 500 is also almost 1.80% higher since the beginning of 2009. Investors are now being bombarded with conflicting advice from both from the bullish and the bearish camp. The bears claim that the rally overextended and due for a sharp correction once S&P 500 falls below 878. The bulls believe that bears are in for a surprise once S&P 500 breaks out through the resistance above 930 and the next leg of the new bull market begins.

Dividend Investors on the other hand represent a camp of their own. They keep receiving their dividend checks, holding on to the dividend growers and disposing of their dividend cutters and eliminators. Dividend Investors are quietly re-investing their distributions into more shares and are watching their income grow in the process. It doesn’t matter to them if the S&P 500 is at 1500 or at 700 as long as the dividends are being paid, and most importantly dividends are not being cut, which shouldn’t be a problem for most diversified dividend growth portfolios.

Several companies rewarded their patient investors with dividend raises.

SUPERVALU INC. (SVU), which operates combination stores, food stores, and limited assortment food stores, increased its quarterly dividend by 1.45% to 17.5 cents per share. In addition to that the company announced a program authorizing it to purchase up to $70 million of the company's common stock. SUPERVALU INC. is a dividend aristocrat, which has increased its quarterly dividend in each of the past thirty-six years. The stock currently yields 4.30%.

Lowe's Companies, Inc. (LOW), which operates as a home improvement retailer in the United States and Canada, approved a 5.9% boost in its quarterly dividends to 9 cents/share. Lowe's Companies, Inc. is a dividend aristocrat, which has increased its quarterly dividend in each of the past forty-seven years. The stock currently yields 1.80%.

The H. J. Heinz Company (HNZ), which engages in the manufacture and marketing of food products for consumers, and foodservice and institutional customers, raised its quarterly dividend from 41.5 to 42 cents per share. The H. J. Heinz Company had been a member of the S&P dividend aristocrats index between 1990 and 2002, before it cut its distributions in 2003. The company has resumed increasing its dividends to shareholders since 2004.
The stock currently yields 4.60%.

PPD, Inc. (PPDI), a contract research organization, that provides drug discovery and development services, post-approval expertise, and compound partnering programs, increased its annual dividend payments by 20% to 60 cents per share. PPD, Inc. has consistently increased its quarterly dividends since 2006. The stock currently yields 3.00%.

Monro Muffler Brake, Inc. (MNRO), which provides automotive undercar repair and tire services, increased its quarterly dividend by 16.70% to 7 cents per share. Monro Muffler Brake, Inc. started raising dividends regularly since it initiated its dividend policy in 2005. The stock currently yields 0.90%.

Fred's, Inc. (FRED), which sells general merchandise through retail discount stores and pharmacies, increased its quarterly dividend by 50% to 3 cents per share. Fred's, Inc. doesn’t have a history of regular dividend increases. The stock currently yields 0.90%.

Flowers Foods' (FLO), which engages in the production and marketing of bakery products in the United States, raised its quarterly dividend by 17% to 17.50 cents per share. Flowers Foods has increased its quarterly dividend in each of the past 7 years. The stock currently yields 2.90%.


Full Disclosure: None
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Monday, May 25, 2009

Nine Dividend Stocks confident in raising dividends

Several notable companies raised their dividends last week. Dividend raises are not only getting more frequent, but they also seem to be spreading globally as well. A dividend raise in this tough environment indicates confidence in the business and the ability to generate free chas flow. A strong cash flow also enables companies to fund future growth internally, rather than relying exclusively on the capital markets for growth. The companies which decided to share their continued growth with shareholders by rewarding them with a dividend raise include:

Vodafone (VOD), a mobile telecommunications company with operations in Europe, the Middle East, Africa, the Asia Pacific, and the United States., raised its final dividend by 3.5% to 0.052 GBP per share. ADR holders are expected to receive a dividend payment of $0.80 for the second half of 2009 based off current forex rates. Vodafone is an international dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for over ten consecutive years. The stock currently yields 4.30%.

ACE Limited (ACE), which provides insurance and reinsurance services to commercial and individual customers worldwide, increased its regular cash dividend by 7% to 31 cents per share. ACE Limited is an international dividend achiever, which has increased its quarterly dividend in each of the last fifteen years, which it has more than doubled since 2001. The stock currently yields 2.80%.

Raven Industries, Inc. (RAVN), which manufactures various products for industrial, agricultural, construction, and military/aerospace markets in North America, increased its quarterly dividend by 8% to 14 cents per share. Raven Industries, Inc. is a dividend achiever, which has increased its quarterly dividend in each of the past thirteen years, which it has more than doubled since 2004. The stock currently yields 1.90%.

AAON, INC. (AAON), which engages in the manufacture and sale of air-conditioning and heating equipment, increased its semi-annual cash dividend by 13% to 18 cents per share. AAON, INC. has rewarded its shareholders with an uninterrupted streak of increased dividends since 2006. The stock currently yields 1.70%.

Northrop Grumman Corporation (NOC), which provides products, services, and solutions in information and services, aerospace, electronics, and shipbuilding in the United States, increased its regular cash dividend from 40 cents to 43 cents per share. Northrop Grumman Corporation has rewarded its shareholders with an uninterrupted streak of increased dividends for 5 consecutive years. The stock currently yields 3.60%.

Xcel Energy Inc. (XEL), which engages in the generation, purchase, transmission, distribution, and sale of electricity to residential, commercial, industrial, and public authorities in the United States, boosted its dividend by 3.2% to 24.50 cents per share. Xcel Energy Inc has rewarded shareholders with an uninterrupted streak of increased dividends since 2004. The stock currently yields 5.80%.

Airgas, Inc. (ARG), which is one of the largest U.S. distributor of industrial, medical, and specialty gases, and hardgoods, such as welding equipment and supplies, increased its regular cash dividend by 12.50% from 16 cents to 18 cents per share. Airgas, Inc. has rewarded its shareholders with an uninterrupted streak of increased dividends since 2004. The stock currently yields 1.70%.

Unum Group (UNM), which provides group and individual disability insurance products in the United States and the United Kingdom, raised its quarterly dividend by 10% to 8.25 cents per share. Unum Group lost its dividend achiever status in 2000 and has been unable to consistently increase dividends since then. The stock currently yields 1.80%.

AmerisourceBergen Corporation (NC), a pharmaceutical services company, which offers drug distribution and related services to healthcare providers and pharmaceutical manufacturers, announced its plans to raise quarterly dividends by 20% to $0.06/share after a 2:1 stock split. AmerisourceBergen Corporation has increased dividends for 4 consecutive years. The stock currently yields 1.10%.

I also expect several dividend aristocrats such as Clorox (CLX) and Lowe’s (LOW) to raise their distributions by the end of May, marking it one of the busiest month for dividend increases.

Lowe’s (LOW) has raised its dividend every May since 2004. This dividend growth stock has been raising dividends for 46 consecutive years and has a 5-year dividend growth rate of 46.70%.

Clorox (CLX) has raised its dividend every May over the past 2 years. Before that the board of directors of Clorox tended to announce dividend increases in November for the preceding three years. This dividend growth stock has been raising dividends for 31 consecutive years and has a 5-year dividend growth rate of 11.20%. (analysis)
Full Disclosure: Long CLX

Relevant Articles:

- Dividend Investing vs Trading
- More Dividend Stocks to Avoid
- Eight Dividend Increases in the News
- Clorox (CLX) Dividend Analysis

Monday, May 18, 2009

Eight Dividend Increases in the News

The past several months have been characterized by tremendous volatility and a lot of negative news regarding the state of the economy as a whole. Given the uncertainties in the global economy, investors are wondering whether they should cash out their portfolios and simply wait for the storm to end.

I think that this would not be a good move, especially for the dividend investor who already has a diversified portfolio of income producing stocks. Such an investor will be more focused on the dividend raises that his or her stocks deliver.

Investors focusing on every tick of the market might miss some rare investment opportunities when there is a disconnect between fundamentals and price. Don’t forget that even during a crisis people will continue to eat, shave, take showers, purchase beverages, smoke and eat out. Thus it always pays to not lose track of the big picture, even during the most challenging times for your portfolio.

Several stocks had some major dividend increases over the past week. Others didn’t deliver such exciting news but reaffirmed their payments to shareholders.

NACCO Industries, Inc. (NC), which engages in lift trucks, housewares, and mining businesses, increased its regular cash dividend from 51.5 cents to 51.75 cents per share. NACCO Industries, Inc. is a dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 25 consecutive years. The stock currently yields 6.40%.

National Grid (NGG), which engages in the ownership and operation of regulated electricity and gas infrastructure networks, raised its final dividend to 0.23 GBP per share. ADR holders are expected to receive a dividend payment of $1.74 for the second half of 2009. National Grid is an international dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 12 consecutive years. The stock currently yields 6.10%.

Assurant, Inc. (AIZ), which provides specialized insurance products and related services in North America and internationally, raised its quarterly dividend by 7% to $0.15 per share. Assurant, Inc has rewarded its shareholders with an uninterrupted streak of increased dividends since 2004.

Molson Coors Brewing Company (TAP), which brews, markets, sells, and distributes beer and other beverages, raised its quarterly dividend by 20% to $0.24 per share. This is the second consecutive dividend increase for Molson Coors Brewing Company since 2008. The stock currently yields 2.30%. The CEO of the company showed his confidence in the company’s ability to generate strong cashflows with this statement: "We are in a strong position to increase cash returns to shareholders, while preserving the financial flexibility to explore growth opportunities that meet our strict return criteria."

Portland General Electric Company (POR), which engages in the generation, purchase, transmission, distribution, and retail sale of electricity in the state of Oregon, declared a 4% increase in its quarterly dividend to $0.255 per share. This represents the third consecutive dividend increase for Portland General Electric Company since the company went public in 2006. The stock currently yields 5.90%.

Communications Systems, Inc. (JCS), which manufactures and sells modular connecting and wiring devices, and media and rate conversion products, announced that its Board has approved a 16.6% increase in its quarterly dividend from $0.12 to $0.14 per. Communications Systems, Inc. has rewarded its shareholders with an uninterrupted streak of increased dividends since 2003. The stock currently yields 6.20%.

AmTrust Financial Services, Inc. (AFSI), which operates as a specialty property and casualty insurance company, raised its quarterly dividend by 20% to $0.06 per share. This represents the fourth consecutive dividend increase for AmTrust Financial Services, Inc since the company went public in 2006 The stock currently yields 2.10%.

FactSet Research Systems Inc (FDS), which provides financial and economic information, including fundamental financial data on various companies to the investment community worldwide, boosted its quarterly dividend by 11% to $0.20per share. FactSet Research Systems Inc has rewarded its shareholders with an uninterrupted streak of increased dividends since 1999. The stock currently yields 1.40%.

As a dividend investor, it pays to scan the wires for news of dividend increases even in the current credit crisis. This exercise could uncover strong dividend players for further analysis and inclusion in ones portfolio.

Full Disclosure: None

Relevant Articles:

- Why do I like Dividend Achievers
- International Dividend Achievers for diversification
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- Eleven companies bucking the dividend cuts trend

Monday, May 11, 2009

Eleven companies bucking the dividend cuts trend

BB&T (BBT) and Legg Mason(LM) are the latest financial stock to drastically cut dividends . This didn’t shock anyone, as the financial sector has received a pretty bad reputation for its enormous losses and massive dividend cuts. The careful income investor who is looking for ways to generate some income from their investments should definitely look past dividend yield and instead focus on the sustainability of the payout, the dividend policy of the company and management’s desire to keep raising dividends. Some companies, whose sales are somewhat recession resistant keep generating enough cash flow to justify sharing their wealth with shareowners while also financing their operations efficiently. The bullish momentum after last weeks dividend increases from Exxon Mobil (XOM) and IBM is holding up quite well. Some solid companies such as PepsiCo and Alcon rewarded shareholders with increases in dividend income.

PepsiCo (PEP), which manufactures, markets, and sells various snacks, carbonated and non-carbonated beverages, and foods worldwide, raised its quarterly dividend by 6% to $0.45 per share. PepsiCo is a dividend aristocrat, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 37 consecutive years. The stock currently yields 3.60%. Check my analysis of PepsiCo.

PepsiCo’s chairman and CEO commented on the dividend increase, which was a major confident boost for shareholders: "We are pleased to announce our thirty-seventh annual dividend increase, reflecting the strength of our cash flow and balance sheet. Even in this difficult economy, we are committed to return cash to our shareholders while continuing to invest in the long-term growth of our business."

Alcon (ACL), which engages in the development, manufacture, and marketing of pharmaceuticals, surgical equipment and devices and consumer eye care products, raised its annual dividend by 50% to $3.49 per share. Alcon is an international dividend achiever which has rewarded its shareholders with an uninterrupted streak of increased dividends for 7 consecutive years. The stock currently yields 3.60%.

Spectra Energy Partners, LP (SEP), a master limited partnership which engages in the transportation of natural gas through interstate pipeline systems as wells as the storage of natural gas in underground facilities in the United States, raised its quarterly distributions from $0.36 to $0.37 per unit. Spectra Energy Partners, LP has rewarded unitholders with increased distributions for 7 consecutive quarters. The partnership currently yields 6.50%.

Tower Group Inc. (TWGP), which provides a range of specialized property and casualty insurance products and services to small to mid-sized businesses and individuals, raised its quarterly dividend by 40% to $0.07 per share. This has been the third time that Tower Group Inc. has increased dividends since 2007. The stock currently yields only 1.00%.

Avista Corp. (AVA), which engages in the generation, transmission, and distribution of energy and energy-related businesses in the United States and Canada, raised its quarterly dividend by 5% to $0.42 per share. Avista Corp has rewarded its shareholders with an uninterrupted streak of increased dividends since 2003. The stock currently yields 5.30%.

RLI Corp. (RLI), which underwrites property and casualty insurance primarily in the United States, raised its quarterly dividend by 3.80% to $0.27 per share. RLI Corp. is a dividend champion, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 34 consecutive years. The stock currently yields only 2.20%.

Expeditors International of Washington, Inc. (EXPD), which engages in the exploration, production, transportation, and sale of crude oil and natural gas, boosted its semi-annual dividend by 19% to $0.19 per share. Expeditors International of Washington, Inc. is a dividend achiever which has rewarded its shareholders with an uninterrupted streak of increased dividends for 16 consecutive years. The stock currently yields only 1.10%.

Bunge Limited (BG), which engages in the agriculture and food business worldwide, raised its annual dividend by 10.50% to $0.21 per share. Bunge Limited has rewarded its shareholders with an uninterrupted streak of increased dividends since 2002. The stock currently yields only 1.50%.

Chesapeake Utilities Corporation (CPK), which engages in the distribution, transmission, and marketing of natural gas, raised its annual dividend from $0.305 to $0.315 per share. Chesapeake Utilities Corporation has rewarded its shareholders with an uninterrupted streak of dividends raises since 2004. The stock currently yields 4.00%.

National HealthCare Corporation (NHC), which operates and manages long-term health care centers and associated assisted living centers, retirement centers, home health care programs in the United States, raised its annual dividend by 8.30% to $0.26 per share. National HealthCare Corporation has rewarded its shareholders with an uninterrupted streak of dividends raises since 2004. The stock currently yields 4.00%.

Medical Products maker Steris Corp. (STE) raised its annual dividend by 38% to $0.11 per share. Steris Corp. has rewarded its shareholders with an uninterrupted streak of dividends raises since 2006. The stock currently yields 1.70%.

In this market it is essential for dividend investors to select only best dividend stocks whose business model could deliver a sustainable increase in earnings, which could unleash the dividend growth potential of corporations.

Full Disclosure: Long PEP

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- Dividend Conspiracies

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Monday, May 4, 2009

Busiest week for dividends increases in 2009

Last week marked the busiest week for dividend increases in 2009 as several blue chip companies such as IBM, Costco and Exxon Mobil raised their payouts. It is always bullish to see companies which have always rewarded shareholders with raised payouts continue operating in a shareholder friendly pattern of behavior.

ExxonMobil (XOM), which engages in the exploration, production, transportation, and sale of crude oil and natural gas, raised its quarterly dividend by 5% to $0.42 per share. Exxon Mobil is a dividend aristocrat, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 27 consecutive years. The stock of the largest energy company in the world currently yields only 2.40%. Check out my analysis of XOM.

International Business Machines (IBM), which develops and manufactures information technology products and services worldwide, announced a 10% boost to its quarterly dividend to $0.55 per share. IBM is a dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 14 consecutive years. The stock currently yields only 2.00%. Check out my analysis of IBM.

W.W. Grainger, Inc. (GWW), which distributes facilities maintenance and other related products in North America., announced a 10% boost to its quarterly dividend to $0.55 per share. W.W. Grainger, Inc. is a dividend aristocrat, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 38 consecutive years. The stock currently yields only 2.00%. Check out my analysis of GWW.

Costco (COST), which operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities, announced an increase to its quarterly dividend from $0.16 to $0.18 per share. Costco has rewarded its shareholders with an uninterrupted streak of increased dividends since 2004. The stock currently yields only 1.30%.

Occidental Petroleum Corporation (OXY), which operates as an oil and gas exploration and production company, announced an increase to its quarterly dividend from $0.32 to $0.33 per share. Occidental Petroleum Corporation has rewarded its shareholders with an uninterrupted streak of increased dividends since 2003. The stock currently yields only 2.20%.

Safeway Inc. (SWY), which operates as a food and drug retailer in North America, announced a 21% boost to its quarterly dividend to $0.10 per share. Safeway Inc. has rewarded its shareholders with an uninterrupted streak of increased dividends since 2005. The stock currently yields only 1.60%.

Energy Transfer Equity, L.P. (ETE), a master limited partnership which through its general partnership interest in Energy Transfer Partners, L.P., engages in the natural gas midstream, transportation, and storage in the United States, announced an increase to its quarterly distributions from $0.51 to $0.525 per unit. Energy Transfer Equity, L.P. has rewarded its unitholders with an uninterrupted streak of increased dividends since 2006. The partnership currently yields 8.10%

Valmont Industries, Inc. (VMI), which produces fabricated metal products; metal and concrete pole, and tower structures; and mechanized irrigation systems in the United States and internationally, announced a 15% increase in its quarterly distributions to $0.15 per share. Valmont Industries, Inc. has rewarded its shareholders with an uninterrupted streak of increased dividends since 2002. The stock currently yields only 0.90%

BOK Financial Corp. (BOKF), which provides various financial products and services to commercial and industrial customers, and other financial institutions and consumers in the United States, announced an increase in its quarterly dividends from $0.225 to $0.24 per share. BOK Financial Corp. has rewarded its shareholders with an uninterrupted streak of increased dividends since 2005. The stock currently yields only 2.40%

AmeriGas Partners, L.P. (APU), a master limited partnership operates as a retail propane distributor in the United States, boosted its quarterly distributions by 5% to $0.67 per unit. AmeriGas Propane, Inc., has rewarded its unitholders with an uninterrupted streak of increased dividends since 2005. The partnership currently yields 8.30%

UGI Corporation (UGI), engages in the distribution and marketing of energy products and related services in the United States and internationally, boosted its quarterly dividend payment by 4% to $0.20 per share. UGI Corporation is a dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 22 years. The stock currently yields 3.40%

Boardwalk Pipeline Partners, LP (BWP), a master limited partnership which engages in the interstate transportation and storage of natural gas in the United States, boosted its quarterly distributions from $0.38 to $0.385 per unit. Boardwalk Pipeline Partners, LP has rewarded its unitholders with an uninterrupted streak of increased dividends since 2006. The partnership currently yields 9.30%

Alliance Resource Partners, L.P. (ARLP), a master limited partnership which engages in the production and marketing of coal for utilities and industrial users in the United States., announced an increase to its quarterly distributions from $0.715 to $0.73 per unit. Alliance Resource Partners, L.P. has rewarded its unitholders with an uninterrupted streak of increased dividends since 2000. The partnership currently yields 8.60%

It is certainly bullish to see companies such as Exxon Mobil continuing to reward stockholders with raised payouts. The company has paid out dividends every quarter since 1911. I would end this weeks dividend growth review with a quote from the founder of Exxon John D. Rockefeller:” Do you know the only thing that gives me pleasure? It's to see my dividends coming in.”

Full Disclosure: Long GWW

This post was featured on Carnival of Personal Finance #204

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Monday, April 27, 2009

Johnson & Johnson - a solid dividend aristocrat to own

Yet another notable dividend aristocrat raised its dividends last week following Procter and Gamble’s 10% dividend increase last week. This brings the total year to date dividend increases in the S&P dividend aristocrats index to 18, versus only 5 dividend cuts so far in 2009.

Johnson & Johnson (JNJ), which engages in the research and development, manufacture, and sale of various products in the health care field worldwide, announced a 6.50% boost in its quarterly dividend to $0.49 per share. Johnson & Johnson is a dividend aristocrat, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 47 consecutive years. The stock currently yields 3.60%. Check out my analysis of Johnson & Johnson (JNJ). I would consider adding on to my J&J stake as long as the stock is below $65.

Kellogg Company (K), which engages in the manufacture and marketing of ready-to-eat cereal and convenience foods., announced a 10% boost in its quarterly dividend to $0.375 per share, effective in the third quarter.. Kellogg Company is a former dividend aristocrat, which has fought back to regain its status of a dividend growth stock since 2005. The stock currently yields 3.50%.

The board of The J. M. Smucker Company (SJM), which engages in the manufacture and marketing of branded food products, has approved an increase in its quarterly dividend from $0.32 to $0.35 per share. The J. M. Smucker Company has rewarded its shareholders with an uninterrupted streak of increased dividends since 2002. The stock currently yields 3.60%.

Southern Company (SO), which operates as an energy company serving across the southeastern United States, announced a 4.20% raise in its quarterly dividend to $0.4375 per share. Southern Company has rewarded its shareholders with an uninterrupted streak of increased dividends for 7 consecutive years. The stock currently yields 5.90%.

Suburban Propane Partners, L.P. (SPH), a master limited partnership which engages in the distribution of propane, fuel oil, kerosene, diesel fuel, gasoline, and refined fuels, as well as marketing of natural gas and electricity in deregulated markets, announced boost in its quarterly distributions to $0.815 per unit. Suburban Propane Partners, L.P. has rewarded its unitholders with an uninterrupted streak of increased dividends since 1999. The units currently yield 8.80%.

Holly Energy Partners, L.P. (HEP), another master limited partnership which operates a system of refined product and crude oil pipelines, storage tanks, and distribution terminals primarily in west Texas, New Mexico, Utah, and Arizona, increased its quarterly distributions by 1.30% to $0.775 per share. Holly Energy Partners, L.P. has rewarded its unitholders with an uninterrupted streak of increased dividends for 5 consecutive years. The stock currently yields 12.10%.

Hudson City Bancorp (HCBK), which operates as the bank holding company for Hudson City Savings Bank that provides a range of retail banking services in the states of New Jersey, New York, and Connecticut, announced a 7.10% boost in its quarterly dividend to $0.15 per share. Hudson City Bancorp has rewarded its shareholders with an uninterrupted streak of increased dividends for 9 consecutive years. The stock currently yields 4.90%.

Cullen/Frost Bankers, Inc. (CFR), which provides various banking and financial products and services primarily in Texas, announced a 2.40% boost in its quarterly dividend to $0.43 per share. Cullen/Frost Bankers, Inc. is a dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 15 consecutive years. The stock currently yields 3.60%.

Full Disclosure: Long JNJ

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Monday, April 20, 2009

Procter & Gamble (PG) – a reliable dividend aristocrat

There has been an interesting trend in mainstream financial media to portray most dividends as unsustainable. This is further fueled by statistics from Standard & Poors, which shows that dividends are being cut at the fastest pace since 1955, and rumors about the shrinking universe of dividend growth stocks. Enterprising investors who look past those fearing statistics and view it as a contrarian buy signal would find a lot of consistent dividend raisers who keep on delivering good results to shareholders. After all, companies which have increased dividends for more than a quarter of a century have a sound cash flow management policy in place which has the shareholders best interest in mind, as opposed to empire building at all costs, excessive management bonuses and wasting stockholder value on unprofitable projects.

One such company, which, despite the current financial meltdown, continues business as usual, is Procter & Gamble. Other companies which show their confidence in their ability to grow earnings and generate enough cash in the future include Enterprise Products Partners L.P. (EPD), H.B. Fuller Company (FUL), People's United Financial (PBCT) and
Anworth Mortgage Asset Corporation (ANH).

Procter & Gamble (PG), which engages provides branded consumer goods products worldwide, announced a 10% raise in its quarterly dividend to $0.44 per share. Procter & Gamble is a dividend aristocrat, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 53 consecutive years. The stock currently yields 3.50%. Check out my analysis of Procter & Gamble (PG). I would consider adding on to my P&G stake as long as the stock is below $59.

Enterprise Products Partners L.P. (EPD), a master limited partnership, which provides services to producers and consumers of natural gas, natural gas liquids (NGL), crude oil, and petrochemicals, raised its quarterly distributions to $0.5375 per unit. This represents the 28th distribution increase since Enterprise’s initial public offering in 1998 and its 19th consecutive quarterly increase. This midstream MLP currently yields 9.50%.

H.B. Fuller Company (FUL), which manufactures and markets adhesives and specialty chemical products worldwide, boosted its quarterly dividend by 3% to $0.068 per share. H.B. Fuller Company is a dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for 40 years. The stock currently yields 1.50%.

People's United Financial (PBCT), which provides commercial banking, retail and small business banking, and wealth management services to individual, corporate, and municipal customers, raised its quarterly dividend from $0.15 to $0.1525 per share. People's United Financial has rewarded its shareholders with an uninterrupted streak of increased dividends for 15 consecutive years. The stock currently yields 3.50%.

Anworth Mortgage Asset Corporation (ANH), a real-estate investment trust that invests primarily in United States agency mortgage-backed securities issued or guaranteed by United States government Anworth Mortgage Asset Corporation sponsored entities, such as Fannie Mae or Freddie Mac, boosted its quarterly dividend to $0.30 per share. The stock currently yields 18.20%.

I continue seeing dividend aristocrats raising dividends in 2009. Master Limited Partnerships are another bright sector for dividend increases. It is also interesting to see financial companies such as People's United Financial and Anworth Mortgage Asset Corporation raising payouts.

Full Disclosure: Long PG

Relevant Article:

- Procter & Gamble (PG) Dividend Stock Analysis
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Sunday, April 12, 2009

Dividend Stocks Raising Payments in a rising market

Many investors have been running away scared from dividend growth investing, after reading the recent harsh statistics from Standard & Poors, which claimed that 1Q 2009 was the worst quarter since 1955.

Most investors who got scared from these statistics seem to forget that dividend investing and investing in general is a long term process, not a matter of timing the intraday ticks on the S&P 500. In order to be successful at investing, one has to stick with their strategy and purchase only those dividend stocks, that would create a diversified basket of companies. When combined together, this portfolio should withhold the bear market forces, and throw off a decent amount of dividend income over time.
Despite all the negative publicity that dividends are getting, one could still find companies that actually raise their dividends.

Tanger Factory Outlet Centers (SKT), a real-estate investment trust which engages in acquiring, developing, owning, operating, and managing factory outlet shopping centers, raised its quarterly dividend from $0.38 to $0.3825 per share. Tanger Factory Outlet Centers is a dividend achiever which has rewarded its shareholders with an uninterrupted streak of increased dividends for 16 years. The stock currently yields 4.40%.

Plains All American Pipeline (PAA), a master limited partnership which engages in the transportation, storage, terminalling, and marketing of crude oil, refined products, and liquefied petroleum gas and other natural gas-related petroleum products, raised its quarterly distributions by 4.6% to $0.905 per unit. Plains All American Pipeline has rewarded its shareholders with an uninterrupted streak of increased dividends for 9 years. The units currently yield 9.20%.

Genesis Energy (GEL), a master limited partnership which operates in the midstream segment of the oil and gas industry in the Gulf Coast area of the United States, raised its quarterly distributions by 2.3% to $0.3375 per unit. Genesis Energy has rewarded its shareholders with an uninterrupted streak of increased dividends since 2004. Genesis Energy has cut its distributions in 2000 and 2003. The units currently yield 11.50%. I would not initiate a position in Genesis Energy at these levels.

TJX Companies (TJX), which operates as an off-price retailer of apparel and home fashions, raised its quarterly dividend from $0.11 to $0.12 per share. TJX Companies is a dividend achiever which has rewarded its shareholders with an uninterrupted streak of increased dividends for 13 years. The stock currently yields 1.70%.

It’s interesting to note despite the credit market crunch, there are still some real estate investment trusts which keep rewarding shareholders with dividend raises. The master limited partnerships have also accounted for stable and consistent increases in distributions as of late.

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Monday, April 6, 2009

Dividend Stocks in the News

There were few dividend increases last week. The companies that raised their payments were WSO, EWST and MFA.

Energy West (EWST) raised its monthly dividend payment to $0.045 from $0.04. The distributor and seller of natural gas to end-use residential, commercial, and industrial customers in the United States has been consistently raising its dividends since 4Q 2005 and currently yields 6.80%.

MFA Financial (MFA) raised its quarterly dividends to $0.22/share from $0.21. The company primarily invests in mortgage-backed securities (MBS) that include hybrid and adjustable-rate MBS (ARM-MBS). The dividend is pretty volatile and despite the high current yield of 14.30%, it doesn’t seem worthy of income consideration at this moment.

Watsco (WSO), which distributes air conditioning, heating, and refrigeration equipment, raised its quarterly dividends for a 6th year in a row to $0.48/share. The 5 year average dividend growth is 36.1% annually. WSO would be an interesting addition to a dividend growth portfolio if it reaches a 10-year streak of consistent dividend increases 3 years from now. The stock currently yields 4.90%.

Despite the slow week for dividend increases, I am looking forward to a busy April, since historically some well-known dividend aristocrats tend to raise their dividends during the current month.

Johnson & Johnson (JNJ) has raised its dividend every April over the past five years. This dividend growth stock has been raising dividends for 46 consecutive years and has a 5 year dividend growth rate of 14.10%. (analysis)

Procter & Gamble (PG) has raised its dividends every March or April for the past four years. This dividend aristocrat has been rewarding shareholders with a rising dividend for 55 consecutive years. PG has a 5-year dividend growth rate of 10.94%. (analysis)

Exxon Mobil (XOM) has raised its dividends in April during four of the last five years. The oil giant has rewarded stockholders for 26 years with an increasing stream of dividend income. The five-year dividend growth rate for XOM is 9.49%. (analysis)

W.W. GRAINGER (GWW) is another dividend aristocrat which has increased its dividends in every in April over the past five years, while achieving an annualized dividend growth of 17.08%. GWW has a 37-year record of consecutive dividend increases. (analysis)

Full Disclosure: Long JNJ, PG, and GWW

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Monday, March 30, 2009

American Express maintains its dividend payment

It was another slow week for dividend increases, as few well knows companies raised their dividends. There was some surprising news from American Express (AXP), one of the largest holdings of billionaire Warren Buffet. The provider of charge and credit payment card products surprised Wall Street by maintaining its current dividend of $0.18/share. This was contrary to recent moves by Wells Fargo (WFC), JP Morgan Chase (JPM) and US Bank (USB) to cut their dividends substantially. Amex is not a dividend achiever or aristocrat since it only started consistently raising its dividends in 2003. The stock currently yields 5%. The company does fit the profile of a potential financial dividend cutter, especially after receiving $3.389 billion worth of TARP money.

The board of Prospect Capital Corporation (PSEC) increased the quarterly dividend on the company's common stock to 40.5 cents per share from 40.375 cents. This marked the 17th consecutive quarterly dividend increase for the New York, NY private equity and mezzanine debt firm specializing in secured debt and equity investments. Prospect Capital Corporation currently yields 18%.

Bowl America A (BWL.A), which operates bowling centers in the United States increased its quarterly dividend payments to $0.155 from $0.15/share. This marks the 38 consecutive dividend increase for this Dividend Champion. The stock currently yields 6.40%.

Raytheon Company (RTN), designs, develops, manufactures, integrates, and supports technological products, services, and solutions for governmental and commercial customers in the United States and internationally, rewarded its shareholders with an 11% increase in its quarterly dividend from $0.28 to $0.31 per share. This marks the 6th consecutive year of dividend increases for the company. The stock currently yields 3.10%

Hatteras Financial (HTS), rewarded its shareholders with a 5% increase in its quarterly dividend from $1 to $1.05 per share. The mortgage real estate investment trust currently yields 17.50%. I wouldn’t jump on this ship yet however, given the short history that the company had on the market in addition to the irregular dividend schedule.

The board of Pepsi Bottling Group, Inc. (PBG) increased the quarterly dividend on the company's common stock to 18 cents per share from 17 cents. This marked the 6th consecutive annual dividend increase for the New York, NY manufacturer and distributor of Pepsi-cola beverages. Pepsi Bottling Group, Inc. currently yields 3.20%.

Overall I didn’t find any consistent dividend grower to spark my interest in further research except Bowl America. The rest of the stocks have a short history of raising their dividends, which doesn’t even come close to the ten-year period of dividend growth, which I require.

Full Disclosure: None

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Monday, March 23, 2009

Dividends are Powering Up the Tech Sector

The past week marked an increase in positive dividend news from major companies. The most bullish news came from software giant Oracle, which declared its first ever quarterly dividend of $0.05/share. Most of the large cap tech companies from the dot-com boom eras are now mature plays on the sector. They could now afford to share an increased portion of their revenue streams with shareholders.

Cisco Systems is another major tech company, which announced its intent to pay a dividend eventually back in November 2008. The evolution of the large cap former tech bellwether darlings of Wall Street from the 1990’s is astonishing. As stocks like Intel (INTC), Microsoft (MSFT) and Cisco Systems (CSCO) are no longer growing as rapidly as they used to and become mature companies, they start distributing larger portions of their net incomes to shareholders in terms of dividends. The more important question however is whether these companies will continue paying out rising dividends to shareholders after the dividend tax is repealed.

Realty Income and Air Products and Chemicals were two other companies, which rewarded their shareholders with dividends.

The board of Air Products (APD) increased the quarterly dividend on the company's common stock to 45 cents per share from 44 cents. This marked the 27th consecutive annual dividend increase for the Allentown, Pennsylvania maker of atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide. Air Products and Chemicals, Inc. is the sixteenth dividend aristocrat to raise its dividends in 2009. Check out my analysis of Air Products and Chemicals (APD).

Realty Income (O), which engages in the acquisition and ownership of commercial retail real estate properties in the United States., raised its dividends to $0.1420625 per share from $0.14175 per share. This is the 46th consecutive quarterly increase for this dividend achiever and the 53rd dividend increase since Realty Income went public in 1994. The new monthly dividend amount represents an annualized dividend amount of $1.70475 per share. Realty Income currently yields and is one my Best High Yield Dividend Stocks for 2009. Check out my analysis of Realty Income (O).

Full Disclosure: Long O and APD

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