Dividend Investing Works in All Markets

I read an article titled “Rising Markets are Bad for Dividends”. The premise of the article was that rising stock prices tend to bring yields down. As a result the best time to invest in dividend stocks is during market meltdowns. As a long term dividend investor, I disagree with several points of the article.

First, while rising prices typically result in decreasing current yields, the dividend payments remain unchanged in most circumstances. Even better, if you select some quality dividend stocks such as McDonald’s (MCD) or Coca-Cola (KO) your dividend payment is likely to increase over time. As a result investors who purchased at the lower prices have essentially managed to lock in the higher yield. This means that their yield on cost would be higher than current yields and would most likely increase if the company raises distributions.

Right now Aflac (AFL) trades at $44 and yields 2.50%. Back in January 2009 however, I was able to purchase some shares at $25.24/share. The stock dividend was 28 cents/share, which meant that the yield at the time was 4.40%. The stock subsequently fell to as low as $10.83/share, before recovering to $50. Despite the market fluctuations however, my yield on cost has remained 4.40%. The capital gain is a bonus, which is still important however. If Aflac (AFL) decides to raise distributions, my yield on cost would be even higher.

Second, while it is good in theory to wait for the perfect set up in order to purchase stocks, this theory could fail the reality test resulting in poor performance over time. Investors who purchased stocks in late 2008 and throughout 2009 have made money, because stock prices were depressed. The last time stocks fell as much as they did during the 2008-2009 stock market collapse, was during the bursting of the tech bubble in 2000-2003. This means that investors that missed the perfect opportunity to purchase stocks between 2000 and 2003 had to wait for at least four years, before deploying their capital. In the meantime, their portfolios would have likely underperformed the market, and would have generated little income. Few investors could have managed to remain on the sidelines for such a long time, without doing anything. Waiting too much for the perfect set up also sounds a lot like market timing. Most investors who time the markets however are not as successful as buy and hold investors.

While in hindsight it is easy to pinpoint where the market bottom was, in reality few investors can predict with accuracy any market bottom. Back in 2007 or 2008 for example, the market had several bottoms, which definitely looked like sustainable bottoms. Investors, who were eager to invest at what seemed to be the lowest prices in many years, quickly realized that markets could always go down more.

As a result the best strategy for building a sustainable dividend portfolio is to select at least 30 stocks which fit your entry criteria, and then slowly increase your exposure in each of them. You won’t pick the bottom of the market, but you also invest everything at the top either.

I have highlighted five prominent dividend growth stocks below:

McDonald’s Corporation (MCD), together with its subsidiaries, franchises and operates McDonald’s restaurants in the food service industry worldwide. This member of the dividend aristocrats index has raised dividends for 33 consecutive years. The stock yields 3.30 %. (analysis)

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. This dividend aristocrat has raised distributions for 48 years in a row. The stock yields 3.40%. (analysis)

Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of health care products worldwide. The company has consistently boosted distributions for 38 consecutive years. The stock yields 3.70%. (analysis)

Unilever PLC (UL) provides fast-moving consumer goods in Asia, Africa, Europe, and Latin America. This international dividend achiever has rewarded shareholders with higher distributions for over a decade. The stock yields 4.10%. (analysis)

Automatic Data Processing, Inc. (ADP) provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers. This dividend aristocrat has raised dividends for 35 years in a row. The stock yields 3.30%.(analysis)

Full Disclosure: Long ABT, ADP, KO, MCD and UL

This article was featured on Carnival of Personal Finance #261: Pop Art Edition

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H.J.Heinz and Lowe’s reward shareholders with higher dividends

Few companies can afford to consistently boost dividends. The ones that can do it are characterized by strong competitive advantages and are widely recognized brand names. Consumers are willing to pay a higher price for the quality of the goods or services which those companies provide, which drives sales and profitability for the corporations. The companies raising distributions last week included Lowe’s Companies (LOW) as well as Heinz (HNZ).

Lowe's Companies, Inc. (LOW) , together with its subsidiaries, operates as a home improvement retailer in the United States and Canada. The company raised its quarterly dividend by 22% from $0.09 to $0.11 cents/share. This dividend aristocrat has raised dividends for 49 consecutive years. The stock yields 1.70%.

H. J. Heinz Company (HNZ) manufactures and markets food products for consumers, foodservice, and institutional customers. The company raised its quarterly distributions by 75 to 45 cents/share. This dividend stock has consistently raised distributions since 2004. 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 stock yields 4.10%.

SEI Investments Company provides investment processing, fund processing, and investment management business outsourcing solutions to corporations, financial institutions, financial advisors, and high-net-worth families. SEI Investments (SEIC) announced a 10% increase in its semi-annual dividend from $0.09 to $0.10 per share. The company has raised dividends for 19 consecutive years. This dividend achiever yields 0.95%.

UnitedHealth Group Incorporated (UNH) provides healthcare services in the United States. The company sharply raised its annual dividend from 3 cents to 50 cents/share and switched to paying distributions every quarter. The stock yields 1.70%.

Deere & Company (DE) provides products and services primarily for agriculture and forestry worldwide. The company raised quarterly distributions by 7% to 30 cents/share. While this was the first quarterly increase since 2008, the company’s annual dividend has consistently increased since 2004. The stock yields 2.10%.

McKesson Corporation (MCK) offers medicines, pharmaceutical supplies, and information and care management products and services for the healthcare industry. The company increased the quarterly dividend by 50% to 18 cents/share. The stock yields 1%.

The Cato Corporation (CATO) operates as a fashion specialty retailer for fashion and value conscious females principally in the southeastern United States. The company raised its quarterly distribution by 12% to 18.50 cents/share. This was the first dividend increase since 2007. The stock yields 3.10%.

Williams-Sonoma, Inc. (WSM) operates as a specialty retailer of home products. The company raised its quarterly dividend to 15 cents/share. This was the second dividend increase this year. The company last raised distributions in 2008 before that. The stock yields 2%.

Quanex Building Products Corporation (NX) provides engineered products and aluminum sheet products. The company’s Board of Directors authorized 33.33% increase in its quarterly dividend to 4 cents/share. The stock yields 0.90%.

Full Disclosure: None

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Chevron Corporation (CVX) Dividend Stock Analysis

Chevron Corporation operates as an integrated energy company worldwide. Chevron Corporation is a component of the S&P 500 and Dow Jones Industrials Indexes. The company is also a dividend achiever, which has consistently raised its dividends for 23 years in a row.
Over the past decade this dividend stock has delivered an annual average total return of 10.30% to its shareholders.

At the same time company has managed to deliver a 3.10% average annual increase in its EPS since 2000. The increase in prices of crude oil and natural gas definitely helped with earnings. The rapid fall of energy prices in late 2008 and early 2009 and weak global demand led to a 55% decrease in earnings per share in 2009 to $5.24. For fiscal year 2010 analysts expect earnings to increase by 53% to $8/share. Analysts also expect earnings per share to rise 25% from there to $10/share by FY 2011.

Any analysis of earnings trends for an oil and gas producer such as Chevron would definitely depend of the future prices of energy commodities over the next few years. Nevertheless the dividend is sustainable at current levels and there definitely is some room for dividend growth in 2011 and beyond.

Returns on Equity decreased to 11.70% in 2009, after a few years of consistently being above 20%. Year over year this indicator will fluctuate, due to the changes in the value of oil and natural gas. The company should be able to generate sufficient average returns on equity in excess of 20% in the long run.

Annual dividend payments have increased by an average of 8.30% annually since 2000, which is higher than the growth in EPS. The reason for this is that earnings have a much higher volatility than dividend payments. In my analysis of Chevron from last year, the growth in earnings was much higher than the dividend growth.

An 8 % growth in dividends translates into the dividend payment doubling almost every nine years. Since 1989 Chevron Corporation has actually managed to double its dividend payment almost every ten years on average. The company recently raised its quarterly dividend by 5.90% to 72 cents/share.

The dividend payout ratio has followed the trend in earnings and returns on equity. It largely remained at or below 50% after 2003. Before that it did shoot up above 50% in 2000 and in 2002. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Chevron Corporation is trading at a P/E of 11.70, yields 3.70% and has an adequately covered dividend payment. The forward P/E for 2010 earnings is close to 10. In comparison Exxon Mobil (XOM) trades at a P/E multiple of 14.50 and yields 2.80%, while British Petroleum (BP) trades at a P/E multiple 8 while yielding 6.80%.I find Chevron attractively valued at current levels given its stable dividend growth history. If you are looking to add exposure to the energy sector for your dividend portfolio then CVX could just be the right stock for you.

Full Disclosure: Long BP, CVX and XOM

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A dividend portfolio for the long-term

As a dividend growth investor you would find that over time some stocks tend to fall off your radar and no longer fit the rising income stream criteria that you purchased them for in the first place. Thus it is important to monitor your portfolio on a regular basis and place such stocks on your sell radar. M&T Bank (MTB) and British Petroleum (BP) are two companies which I am closely monitoring, since they have both frozen dividends for several quarters in a row.

The four important characteristics of successful dividend portfolios include entry and exit criteria, diversification, dollar cost averaging and selective dividend reinvestment. I have built my dividend portfolio around those important characteristics over the past few years. I have grouped the stocks I own by sector. I have also included additional information about each company, and I have also marked any companies which I do not find attractive at the moment with "HOLD". Just because a company is not attractively valued at the moment however does not mean that it is automatically a sell. Any companies which I have considered to be a sell have been sold off.

Consumer Discretionary

Family Dollar Stores, Inc. (FDO) operates a chain of self-service retail discount stores for low to lower-middle income consumers in the United States. This dividend aristocrat has raised dividends for 33 consecutive years and yields 1.50%. (analysis) HOLD

McDonald’s Corporation (MCD), together with its subsidiaries, franchises and operates McDonald’s restaurants in the food service industry worldwide. This dividend aristocrat has raised dividends for 33 consecutive years and yields 3.20%. (analysis)

The McGraw-Hill Companies (MHP), Inc. provides information services and products to the education, financial services, and business information markets worldwide. This dividend aristocrat has raised dividends for 37 consecutive years and yields 3.30%. (analysis)

The Sherwin-Williams Company (SHW) engages in the development, manufacture, distribution, and sale of paints, coatings, and related products in North and South America, Europe, and Asia. This dividend aristocrat has raised dividends for 32 consecutive years and yields 1.90%. (analysis) HOLD

Consumer Staples

Archer-Daniels-Midland Company(ADM) procures, transports, stores, processes, and merchandises agricultural commodities and products in the United States and internationally. This dividend aristocrat has raised dividends for 35 consecutive years and yields 2.40%. (analysis) HOLD

The Clorox Company (CLX) engages in the production, marketing, and sales of consumer products in the United States and internationally. This dividend aristocrat has raised dividends for 32 consecutive years and yields 3.20%. (analysis)

Kimberly-Clark Corporation (KMB), together with its subsidiaries, engages in the manufacture and marketing of various health care products worldwide. This dividend aristocrat has raised dividends for 38 consecutive years and yields 4.30%. (analysis)

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. This dividend aristocrat has raised dividends for 48 consecutive years and yields 3.40%. (analysis)

PepsiCo, Inc. (PEP) manufactures, markets, and sells various foods, snacks, and carbonated and non-carbonated beverages worldwide. This dividend aristocrat has raised dividends for 37 consecutive years and yields 3%. (analysis)

The Procter & Gamble Company (PG) engages in the manufacture and sale of consumer goods worldwide. This dividend aristocrat has raised dividends for 53 consecutive years and yields 3.10%. (analysis)

Wal-Mart Stores, Inc. (WMT) operates retail stores in various formats worldwide. This dividend aristocrat has raised dividends for 35 consecutive years and yields 2.40%. (analysis)

Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. This dividend aristocrat has raised dividends for 47 consecutive years and yields 2.70%. (analysis)

McCormick & Company, Incorporated (MKC) engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. This dividend achiever has raised dividends for 24 consecutive years and yields 2.70%. (analysis)

Universal Corporation (UVV), together with its subsidiaries, operates as the leaf tobacco merchants and processors worldwide. This dividend champion has raised dividends for 39 consecutive years and yields 3.90%. (analysis)

Altria Group, Inc. (MO), through its subsidiaries, engages in the manufacture and sale of cigarettes, wine, and other tobacco products in the United States and internationally. This dividend stock yields 6.70%. (analysis)

Diageo plc (DEO) engages in producing, distilling, brewing, bottling, packaging, distributing, developing, and marketing spirits, beer, and wine. This international dividend achiever has raised dividends for over one decade and yields 3.80%. (analysis)

Philip Morris International Inc. (PM), through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. This dividend stock yields 5.20%. (analysis)

Sysco Corporation (SYY), through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice industry in the United States. This dividend champion has raised dividends for 40 consecutive years and yields 3.40%. (analysis)

Unilever PLC (UL) provides fast-moving consumer goods in Asia, Africa, Europe, and Latin America. This international dividend achiever has raised dividends for over one decade and yields 4.10%. (analysis)

Energy
BP p.l.c. (BP) provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. This international dividend achiever has rewarded shareholders with dividend raises for 16 consecutive years and yields 7.70%. (analysis) HOLD

Chevron Corporation (CVX) operates as an integrated energy company worldwide. This dividend achiever has raised dividends for 22 consecutive years and yields 3.90%. (analysis)

Enbridge Energy Partners, L.P. (EEQ) owns and operates crude oil and liquid petroleum transportation and storage assets, as well as natural gas gathering, treating, processing, transmission, and marketing assets in the United States. This dividend stock yields 8.80%.

Kinder Morgan Management, LLC (KMR) operates as an energy transportation and storage company in North America. This dividend achiever has rewarded unitholders with regular distribution increases for 13 years in a row and yields 8.10%. (analysis)

Financials
Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus (Aflac), provides supplemental health and life insurance. This dividend aristocrat has raised dividends for 27 consecutive years and yields 2.60%. (analysis) HOLD

The Chubb Corporation (CB), through its subsidiaries, provides property and casualty insurance to businesses and individuals. This dividend aristocrat has raised dividends for 45 consecutive years and yields 2.90%. (analysis)

Cincinnati Financial Corporation (CINF), through its subsidiaries, offers property, casualty, personal, and life insurance products to businesses and individuals in the United States. This dividend aristocrat has raised dividends for 49 consecutive years and yields 5.90%. (analysis)

Hingham Institution for Savings (HIFS) provides various financial services to individuals and small businesses in Massachusetts. The company currently has nine branches and several ATM locations in Boston and southeastern Massachusetts. The board of directors has raised annual dividends for sixteen years in a row. The stock yields 3%. (analysis)

M&T Bank Corporation (MTB) operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses, and institutions. This former dividend aristocrat ended its 27-year streak of consistent dividend increases in 2008. The stock yields 3.30%. (analysis) HOLD

National Retail Properties (NNN), Inc. is a publicly owned equity real estate investment trust. This dividend achiever has raised dividends for 20 consecutive years and yields 6.90%. (analysis) HOLD

Realty Income Corporation (O) engages in the acquisition and ownership of commercial retail real estate properties in the United States. This dividend achiever has raised dividends for 16 consecutive years and yields 5.60%. (analysis)

The Toronto-Dominion Bank (TD), together with its subsidiaries, provides retail and commercial banking, wealth management, and wholesale banking products and services in North America and internationally. This international dividend achiever has raised dividends for 15 consecutive years and yields 3.60%. (analysis) HOLD

Health Care

Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. This dividend aristocrat has raised dividends for 47 consecutive years and yields 3.50%. (analysis)

Teleflex Incorporated (TFX) primarily develops, manufactures, and supplies single-use medical devices used by hospitals and healthcare providers worldwide. This dividend champion has raised dividends for 31 consecutive years and yields 2.40%. (analysis) HOLD

Industrials

Emerson Electric Co. (EMR), a diversified global technology company, engages in designing and supplying product technology, as well as delivering engineering services and solutions to various industrial, commercial, and consumer markets worldwide. This dividend aristocrat has raised dividends for 53 consecutive years and yields 2.90%. (analysis)

W.W. Grainger (GWW), Inc. and its subsidiaries distribute facilities maintenance and other related products and services in the United States, Canada, Japan, and Mexico. This dividend aristocrat has raised dividends for 38 consecutive years and yields 2.10%. (analysis) HOLD

3M Company (MMM), together with its subsidiaries, operates as a diversified technology company worldwide. This dividend aristocrat has raised dividends for 52 consecutive years and yields 2.60%. (analysis)

United Technologies Corporation (UTX) provides technology products and services to the building systems and aerospace industries worldwide. This dividend achiever has raised dividends for 17 consecutive years and yields 2.60%. (analysis)

Illinois Tool Works Inc. (ITW) manufactures a range of industrial products and equipment worldwide. This dividend champion has raised dividends for 45 consecutive years and yields 2.70%. (analysis) HOLD

Information Technology
Automatic Data Processing, Inc. (ADP) provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers. This dividend aristocrat has raised dividends for 35 consecutive years and yields 3.30%. (analysis)

Materials

Air Products and Chemicals, Inc. (APD) offers atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide. This dividend aristocrat has raised dividends for 27 consecutive years and yields 2.90%. (analysis)

Nucor Corporation (NUE), together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. This dividend champion has raised dividends for 33 consecutive years and yields 3.40%. (analysis)

RPM International Inc. (RPM) engages in the manufacture, marketing, and sale of various specialty chemical products to industrial and consumer markets worldwide. This dividend champion has raised dividends for 33 consecutive years and yields 4.20%. (analysis)

Telecommunications

AT&T Inc. (T) provides telecommunication products and services to consumers, businesses, and other telecommunication service providers under the AT&T brand worldwide. This dividend champion has raised dividends for 33 consecutive years and yields 6.80%. (analysis) HOLD

Utilities

Consolidated Edison, Inc. (ED), through its subsidiaries, provides electric, gas, and steam utility services in the United States. This dividend aristocrat has raised dividends for 33 consecutive years and yields 5.50%. (analysis)

Dominion Resources, Inc. (D), together with its subsidiaries, engages in producing and transporting energy in the United States. This dividend stock currently yields 4.60%.

There are several companies which I hold, that no longer fit my entry criteria, although they might have fit the entry criteria at some point in the past. Building a dividend portfolio does take some time to implement. I typically have between ten to fifteen stocks which are attractively valued at any time. I also keep a list with stocks I would consider buying on dips. This list typically varies depending on market conditions. Back in 2008 and 2009 this list was rather small, and the list of attractively valued stocks was large due to depressed market prices. If a stock is very close to my entry price I might consider initiating a small position and then build my exposure from there. It is very important however to keep current on the overall market environment in order to scoop up any bargains from the waiting list.

Update Note (July 1, 2011): I have since sold off shares of BP after the dividend cut. I also sold shares in AT&T (T) as well.
Update: (January 1, 2012): I have initiated positions in EPD and OKS over the past year as well.

Full Disclosure: Long all stocks mentioned above

This post was featured in the Carnival of Personal Finance #260: Forces of Nature Edition

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Why Dividend Growth Stocks Rock?

According to Ned Davis Research, $100 invested in all dividend payers of the S&P 500 index in 1972, would have grown to $2,266 by the end of 2009. The same $100 invested in non-dividend paying stocks in the S&P 500 returned a negative 39% over the same period. The performance of dividend payers and initiators was even better, returning $2,945 on the initial investment in 1972. Dividend investors should utilize every edge they could find in order to deliver above average total returns. As a result, the findings of the Ned Davis study should not be ignored. The reason why dividend growers outperform is that they represent an elite group of companies which grow earnings, reinvest some of it in the business, and distribute the rest to stockholders. Rising profits equal rising stock prices over the long run, and rising dividends as well. 

   

 Some of the companies which raised distributions over the past week include: 

 The Clorox Company (CLX) engages in the production, marketing, and sales of consumer products in the United States and internationally. The company raised dividends by 10% to 55 cents/share. This was the thirty-third consecutive year of dividend increases for this dividend aristocrat. The stock yields 3.40%. (analysis) 

First Financial Corporation,(THFF) through its subsidiaries, provides various financial services in Indiana and Illinois. The company raised its semi-annual dividend by 2.20% to 46 cents/share. This dividend achiever has managed to increase dividends to shareholders for 22 consecutive years. The stock yields 3.20%. 

Bunge Limited (BG) engages in the agriculture and food businesses worldwide. The company approved a 9.5% increase in the company's regular quarterly cash dividend, from $0.21 to $0.23 per share. The company, which is a member of the international dividend achievers, has consistently raised dividends since 2003. The stock yields 1.90%. 

Transatlantic Holdings, Inc. (TRH), through its subsidiaries, offers reinsurance capacity for a range of property and casualty products, directly and through brokers, to insurance and reinsurance companies, in domestic and international markets. The dividend was raised by 5% to 21 cents/share. The Board of Directors has raised the quarterly distributions of this dividend achiever every year since TRH became a public company in 1990. The stock yields 1.80%. 

Canadian Pacific Railway Limited (CP), through its subsidiaries, provides rail and intermodal freight transportation services. The company increased its next quarterly dividend to 27 Cents/share from 24.75 cents per share. This international dividend achiever has consistently raised distributions since 2004. The stock yields 1.90%. 

Republic Bancorp, Inc. (RBCAA) operates as the holding company for Republic Bank & Trust Company and Republic Bank, which provides banking, tax refund solutions, and mortgage banking services to individuals and businesses in the United States. The company announced an 8% increase in the Company’s second quarter cash dividends to $0.143 per share. This dividend achiever has consistently raised dividends since 1999. The stock yields 2.30% 

Dr Pepper Snapple Group, Inc. (DPS) operates as a brand owner, manufacturer, and distributor of non-alcoholic beverages in the United States, Canada, Mexico, and the Caribbean. The company raised its quarterly dividend by 67% to 25 cents/share. This was the first dividend increase since the company initiated a dividend payment policy in 2009. The stock yields 2.60%. 

Nordstrom, Inc., (JWN) is a fashion specialty retailer, which offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. The company announced that its board of directors declared a quarterly dividend of $0.20 per share, an increase of 4 cents or 25% over the previous quarter’s dividend. This was the first dividend increase since 2008.The stock yields 2.10%.

 

W.R. Berkley Corporation (WRB), operates in the property casualty insurance business in the United States and internationally. The company increased its cash dividend to an annual rate of 28 cents per share, representing a 17% increase from the present rate. The company’s annual dividends have increased for 5 years in a row. The stock yields 4.20%. 

Knight Transportation, Inc. (KNX), together with its subsidiaries, operates as a short to medium-haul truckload carrier of general commodities in the United States. The company raised distributions by 20% to 6 cents/share. The company has consistently raised dividends since 2004. The stock yields 1.20%. Analog Devices, Inc. engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. The company’s Board of Directors increased quarterly dividend by 10% to $0.22 per share. The company’s annual dividends have increased every year since 2004. The stock yields 3.10%. 

Tiffany & Co.(TIF), through its subsidiaries, engages in the design, manufacture, and retail of fine jewelry. Its jewelry products include gemstone jewelry, gemstone band rings, diamond rings, wedding bands for brides and grooms, non-gemstone, gold or platinum jewelry, and sterling silver jewelry. The company announced a 25% increase in its quarterly dividend from $0.20 to $0.25/share. This is the second announced increase in the quarterly dividend payment policy since the start of the calendar year. The company’s annual dividend has increased every year since 2003. The stock yields 2.30%. 

Ship Finance International Limited (SFL) , through its subsidiaries, owns and operates vessels and offshore related assets in Bermuda, Cyprus, Malta, Liberia, Norway, the United States, Singapore, the United Kingdom, and the Marshall Islands. The company raised distributions by 10% to 33 cents/share. Before you get too excited about the current yield of 7.30%, please bear in mind that the current dividend is half what it were in Q3 2008. 

Unum Group (UNM), together with its subsidiaries, provides group and individual disability insurance products primarily in the United States and the United Kingdom. The company announced that its Board of Directors authorized an increase of 12.1% in the quarterly dividend to 9.25 cents/share. The stock yields 1.60%. Ashland Inc. (ASH)operates as a specialty chemicals company internationally. The company raised annual distribution by 100% to 60 cents/share. The stock yields 1.10%. 

Safeway Inc.(SWY), together with its subsidiaries, operates as a food and drug retailer in North America. The company approved a 20% increase in its quarterly dividend from $0.10 per share to $0.12 per share. This is the sixth consecutive annual dividend increase for the company. The stock yields 2%. 

Xcel Energy Inc.,(XEL) through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electricity to residential, commercial, industrial, and public authorities in the United States. The board of directors raised the quarterly dividend on the company’s common stock from $0.245 per share to $0.2525 per share. The company has raised distributions for 7 consecutive years. The stock yields 4.80%. 

Northrop Grumman Corporation (NOC) provides products, services, and integrated solutions in the aerospace, electronics, information and services, and shipbuilding sectors. The company raised distributions by 9.30% to 47 cents/share for a seventh consecutive year. The stock yields 3%. 

Full Disclosure: Long CLX 

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