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 S&P Dividend Aristocrats Index includes the S&P 500 companies that have managed to increase annual dividends for at least 25 co...
-
I review the list of dividend increases every week, as part of my review process. I focus my attention on companies that raised dividends i...
-
I review the list of dividend increases every week, as part of my monitoring process. This helps me in my review of existing positions and i...
-
There were several companies over the past week which announced their intent to raise dividends to shareholders. It is always great to see c...
-
Becoming a successful dividend investor takes time, effort, and dedication. You need to understand the basics, stick to a clear investment s...
-
A dividend increase shows a commitment to enhancing total shareholder returns through both strong business performance and returning cash to...
-
We just had Black Friday and Cyber Monday. The Holiday Season is approaching. Everyone is rushing to buy gifts to the people that are most i...
-
I review the list of dividend increases every week, as part of my portfolio monitoring process. I leverage several of my dividend investing...
-
Snap-on Incorporated (SNA) manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professi...
-
I have been overdosing on everything about Warren Buffett in the past two-three years. This has spilled over to learning more about Warren’...
