There are over 10,000 stocks traded on NYSE, NASDAQ and AMEX. Out of this wide universe of stocks only about 300 or so have managed to increase dividends for 10 consecutive years. The typical dividend achiever is a strong recognizable brand and is characterized by solid competitive advantages, which translate in the ability to churn out higher profits and high returns on investment. These companies generate so much in excess cash flow, that it makes sense to deliver consistently higher dividend payouts to shareholders.
One such company is Target Corporation (TGT), which operates general merchandise and food discount stores in the United States. The company raised its quarterly dividend by 47% from $0.17 to $0.25 per share. The company has raised dividends for 43 consecutive years. This dividend aristocrat yields 1.90%. (analysis )
"Target's cash generation is well above the amount needed for optimal reinvestment in our core business," said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation. "Because we expect to continue to return excess cash to our shareholders through a combination of regular dividends and opportunistic share repurchase, we believe it is appropriate to increase the amount returned through the quarterly dividend."
Universal Health Realty Income Trust (UHT) operates as a real estate investment trust (REIT) in the United States. This dividend achiever increased its quarterly dividend by $0.005 to $0.605 per share. The company has raised distributions for 22 consecutive years and yields 7.40%. (analysis)
C. R. Bard, Inc (BCR), engages in the design, manufacture, packaging, distribution, and sale of medical, surgical, diagnostic, and patient care devices worldwide. The company raised dividends by 6%, to $0.18 per share. This dividend aristocrat has raised distributions for 39 consecutive years. The stock yields 0.90%.
National Fuel Gas Company (NFG), through its subsidiaries, operates as a diversified energy company primarily in the United States. The company raised its quarterly dividend by about 3% from $0.335 to $0.345/share. This high yield dividend aristocrat has raised dividends for 40 consecutive years. The stock yields 2.80%.
Caterpillar Inc. (CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. The company raised its quarterly dividend by 4.80% to 44 cents/share, which was the first dividend increase since 2008. Despite keeping flat its quarterly distributions for 8 quarters, this dividend achiever has still managed to record increases in its annual dividend for 17th consecutive years. The stock yields 2.90%.
The relatively small universe of dividend achievers, allows investors to concentrate on a smaller number of stocks. By applying a set of a few criteria investors could find a manageable diversified list of companies, representative of many industries and geographic locations.
Full Disclosure: Long UHT
Relevant Articles:
- Dividend Aristocrats List for 2010
- H.J.Heinz and Lowe’s reward shareholders with higher dividends
- Why Dividend Growth Stocks Rock?
- How to Uncover Hidden Dividend Gems
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Can you please explain the CAT thing to me? If they kept their Div flat how did they raise annual distributions? Did the issue a one time dividend?
ReplyDeleteThanks
Anon,
ReplyDeleteIn 2008 the company paid 2 pmts @ 36 cents/share and 2 payments at 42 cents/share. total: $1.56/share.
In 2009 the company paid 4 quarterly dividends @ 42 cents/share. total: $1.68/share
In 2010 the company has paid 2 quarterly distributions at 42 cents/share and will pay 2 quarterly distributions at 44 cents/share. Total: $1.72/share.
Hope that explains it.
Got an article idea for you. How many of dividend aristocrats lost their status in the last bear market?
ReplyDeleteTo be honest, CAT may have paid more each year, but they did not raise the dividend in 09. So, that is not exactly a "fair" way to look at it. So, what's your true defination of dividend aristocrats? Raising or paying?
ReplyDelete