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%.

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  1. Hi there,

    This more of a general comment that I've really enjoyed following your blog over the past 8 months. In my early days of novice investing I made a lot of reckless uninformed choices and the losses in my portfolio are a testament to that.

    Since then I've embraced your vision of "slow investing" and feel a lot more confident and in control--with much of it going to my Roth IRA--and the results are obvious which strategy won out.

    Plan to stick with it for the long run.

    Thanks again.

  2. Liana,

    Glad to hear my blog has been helpful to you. Please let me know if there's anything else you are interested in posted on this site.

    Best Regards,



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