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
-
A dividend champion is a company which has a 25 year record of annual dividend increases. There are only 134 such companies in the US toda...
-
Some investors get absolutely furious the second someone mentions the term yield on cost . I am very surprised when investors seldom have an...
-
Two years ago, I made a bet with Warren Buffett . This was a continuation of the bet that Warren Buffett had done with a hedge fund manager ...
-
I review the list of dividend increases every week, as part of my portfolio monitoring process. I leverage several of my dividend investing ...
-
A dividend king is a company that has managed to increase dividends to shareholders for at least 50 years in a row. There are only 28 such...
-
One of the goals behind my dividend growth portfolio is to buy shares in companies which grow dividends over time. Dividend growth protects ...
-
The S&P Dividend Aristocrats index tracks companies in the S&P 500 that have increased dividends every year for at least 25 years ...
-
As part of my monitoring process, I review the list of dividend increases every single week. This exercise helps me to monitor the organic ...
-
As 2019 is over, I wanted to share with you the five most popular articles on the Dividend Growth Investor website. These were the most popu...
-
My site is read by readers from all walks of life. We have those with no experience investing, to those who have been through the ups and do...
