Three High Yielding Dividend Machines Boosting Distributions

Over the past week, eighteen companies raised dividends. Only three of them however, had managed to consistently raise distributions for at least ten consecutive years. The companies include:

General Mills, Inc. (GIS) manufactures and markets branded consumer foods worldwide. The company boosted its quarterly dividend by 15% to 38 cents/share. This marked the tenth consecutive annual dividend increase for General Mills. Annual dividend growth was 8.70%/year over the past decade. The stock is trading at 17 times earnings and yields a sustainable 3.30%.

Since Heinz (HNZ) has agreed to be acquired a few weeks ago, investors have certainly increased their appetite for brand-name, non-cyclical consumer staples in the food sector. It looks like General Mills could be a decent substitute for Heinz in an income investor’s portfolio.

The company has managed to increase earnings per share from $1.25 in 2003 to $2.42 by 2012. Analysts project earnings to grow to $2.68/share by 2013 and $2.91/share by 2014. Now that General Mills has joined the ranks of Dividend Achievers, I would consider initiating a position in the stock, after I perform a complete analysis of it. It is important to perform an analysis of a company, in order to understand how it generates its income, and whether it would be able to grow earnings in the future.

Two other notable dividend raisers over the past week include real estate investment trusts Realty Income (O) and W.P. Carey (WPC).

Realty Income Corporation (O) engages in the acquisition and ownership of commercial retail real estate properties in the United States. The company raised monthly distributions by 0.20% to 18.123 cents/share. Realty Income recently raised monthly dividends by 19.20%, and the mere fact that it is still committing to boosting monthly distributions is exceptional. At this point however, I doubt future dividend raises are going to beat inflation. I view the company as a hold, but would not consider adding any additional funds to my position. The stock yields 4.90%. Check my analysis of Realty Income.

W. P. Carey Inc. (WPC) is an independent equity real estate investment trust. The REIT raised quarterly distributions by 24% to 82 cents/share. W.P. Carey has raised distributions for 15 years in a row. The current yield is 4.80%. This dividend achiever has managed to significantly increase distributions since its conversion to a REIT status. I have long had this company on my list for further analysis, and would have to thoroughly look at the business before committing any funds.

Full Disclosure: Long O

Relevant Articles:

- Realty Income (O) Raises Dividends by a Record 19.20%
- Realty Income (O) – The Monthly Dividend Company
- What does Buffett see in Heinz (HNZ)?
- Dividend Achievers Additions for 2012