Monday, December 14, 2009

7 Dividend Raisers for the week

The financial crisis of 2007-2009 led to dividend cuts in many financial companies. Investors who were heavily concentrated in the financial sector suffered in the process. Other dividend investors who maintained a balanced income portfolio however saw their dividend income not only stabilize but also increase, as most prominent non-financial dividend stocks continued raising or maintaining distributions. For those investors who kept receiving dividend checks it seemed as if the financial crisis is something that did not affect them. Companies which raised distributions in the face of adversity in the overall economy show that they have sufficient liquidity to invest and grow their operations and also to share their results with stockholders.

Several companies raised distributions last week. Two of them include companies which had previously cut their distributions to shareholders:

Valspar Corporation (VAL), which manufactures and distributes coatings, paints, and related products primarily in the United States and internationally., increased its quarterly dividend by 6.70% to 16 cents per share. Valspar Corporation is a dividend champion, which has increased its quarterly dividend in each of the past twenty-nine consecutive years. The stock currently yields 2.20%. (analysis)

Erie Indemnity Company (ERIE), which provides sales, underwriting, and policy issuance services to the policyholders of Erie Insurance Exchange primarily in the Midwest, mid-Atlantic, and southeast regions of the United States, increased its quarterly dividend by 6.7% to 48 cents per share. Erie Indemnity Company is a dividend achiever, which has increased its quarterly dividend for almost twenty years in a row. The stock currently yields 4.80%.

Edison International (EIX), which engages in the supply of electric energy in central, coastal, and southern California, increased its quarterly dividend by 1.6% to 31.5 cents per share. Edison International has increased its quarterly dividend since 2005. If we expand our time horizon however, it seems that Edison International has cut dividends in 1994 and 2004. The stock currently yields 3.50%.

DPL Inc. (DPL), which operates as a regional electric energy company in the United States., increased its quarterly dividend by 6.10% to 30.25 cents per share. DPL Inc. has regularly raised distributions since 2003. The stock currently yields 4.10%.

Brandywine Realty Trust (BDN), is a REIT which owns, develops and manages a primarily Class A, suburban and urban office portfolio aggregating 34.9 million square feet, including 25.6 million square feet which it owns on a consolidated basis. The company boosted its quarterly dividend by 50% to 15 cents per share. Brandywine Realty Trust is not a consistent dividend grower, as it cut its distributions from 44 to 10 cents earlier in 2009. The stock currently yields 3.90%.

Horace Mann Educators Corporation (HMN), which markets and underwrites personal lines of property and casualty insurance, retirement annuities, and life insurance in the United States, increased its quarterly dividend by 52% to 8 cents per share. Horace Mann Educators Corporation cut its distributions in 2008 from 10.5 cents to 5.3 cents/share. The stock currently yields 2.60%.

Western Union (WU), which provides money transfer and bill payment services worldwide, increased its quarterly dividend by 500% to 6 cents per share. In addition to that the company’s board of directors authorized a new $1 billion share repurchase authorization. The stock would yield a little over one percent after the boost.

Of the companies raising distributions last week, the two utilities look like an interesting addition for investors who might be looking for current income. Their distributions seem adequately covered, although their yields look a little low for utilities. In addition to that I require at least a decade of raising distributions, before I start analyzing companies fully. Erie Indemnity (ERIE) does not seem to have a well covered distribution, while Valspar Corporation (VAL) does have a well covered dividend despite the fact that it is a low yielder. The rest of the companies need a longer history of consistent distribution increases in order to raise interest of serious dividend growth investors.

Full disclosure: None

Relevant Articles:

- Six things I learned from the financial crisis
- The return of the financial dividends
- The Best Trades could be the ones not entered
- When to break your rules

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