There were several dividend aristocrats that recently announced no increase in their payments to shareholders.
Pfizer (PFE), which is one of the leading pharmaceutical companies in the world, announced no increase in its annual dividends for the first time in 41 years. In the past decade, the company was used to increasing its dividend payments to shareholders every December. It comes as no surprise to me that PFE is not raising its dividends. The company needs to increase its drug pipeline either through research or acquisitions as most of its drugs will be facing serious generic competition after they go off patent in 2011. Furthermore, the rising payout and stagnating earnings show danger to the dividend growth investor. In order to maintain its dividend aristocrat status, Pfizer has to increase its dividends by November 2009.
Another stock that announced no increase in its dividends was State Street (STT), which received 5 billion from the Treasury several months ago. The company broke a 27 year streak of two dividend increases per year. In order to maintain its dividend aristocrat status, State Street has to increase its dividends by the end of 2010. As a holder of STT, I am planning to be a seller at $51, which is my breakeven price as I fear that TARP might limit dividend payments for financial companies which received funds from the Treasury.
Progressive (PGR), which is a dividend aristocrat as well, announced that it won’t be paying a dividend in 2008, which terminates its status of a consistent dividend performer.
As a dividend growth investor an unchanged dividend is not necessarily bearish news. Most companies don’t raise their dividends every year, but still could achieve a decent dividend growth rate. If I could exit the position at least at breakeven however, I would most probably invest in companies which could support an increasing dividend payments even during cyclical downturns.
Relevant Articles:
- Why do I like Dividend Aristocrats?
- State Street Corporation (STT) Dividend Stock Analysis.
Popular Posts
-
The US stock market has been turbulent recently. As a Dividend Growth Investor, I usually ignore stock price fluctuations, unless I am looki...
-
The past month has been difficult for many investors. It is during times like these that you see who really is a long-term investor , and w...
-
Over the past year, inflation has been on the increase. A popular meme on the internet is the saying that if you didn't receive an 8.60%...
-
Dividend investing is as sexy as watching paint dry on the wall. Defining an entry criteria that selects quality dividend stocks with risi...
-
A. O. Smith Corporation (AOS) manufactures and markets residential and commercial gas and electric water heaters, boilers, and water treatme...
-
Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, performance materials, equipment, and servic...
-
Stanley Black & Decker, Inc. (SWK) engages in the tools and storage, industrial, and security businesses worldwide. The company raised i...
-
I review the list of dividend increases each week as part of my monitoring process. This exercise pushes me to review existing holdings, and...
-
Coca-Cola (KO) is a dividend king , which has managed to increase dividends to shareholders for 57 years in a row. The company has paid divi...
-
Janus Henderson is a money manager, which has shared some interesting data reports in the past. I recently read their 33rd Global Dividend I...