Posts tagged dividend achievers
Dividend yield or dividend growth?
Jul 28th
I have always had a requirement for a minimum dividend yield, whenever I have analyzed and purchased dividend stocks. The reason for this requirement was to provide with at least some dividend income in case the stock stopped increasing distributions for some reason. If a stock stopped raising distributions I would put it on my hold list and would stop contributing new funds to the position, while reinvesting dividends in other more promising candidates. I do require at least a decade of consistent annual dividend increases, before even looking at a stock. This decreases the size of my watch list to less than 300 stocks.
My entry yield requirement has ranged from a low of 2% in 2008 to a high of 3% since 2009. After analyzing some of the most successful dividend stocks such as Wal-Mart (WMT), Johnson & Johnson (JNJ), McDonald’s (MCD) and Becton Dickinson (BDX) I have come to realize that a minimum yield requirement could have been a detriment to acquiring those stocks when they first became dividend achievers.
Stocks such as Johnson & Johnson (JNJ) never really yielded more than 3% until 2008 for example. As a result I would have missed on strong double digit dividend growth for several decades, which would have surely turned the yield on cost on original investments into the triple digits. A company that yields 2% currently but manages to raise distributions by 12% due to strong earnings growth would double the yield on cost in 6 years.
It seems that a more flexible approach would be to analyze the average yields investors could have received over the past decade and then decide whether it makes sense to purchase the stock based on valuation and earnings power. In this sense making sure not to pay over twenty times earnings or accepting an unreasonably high dividend payout is very important.
Another thing to do is to simply ignore current yield altogether and instead focus on the fundamentals, while evaluating whether the company could reasonably expect to boost distributions for the next decade. A company with a yield lower than 3% would definitely have to have an average dividend growth of at least ten percent.
While I would ignore current yield, I could still create a dividend portfolio where I try to obtain an average current dividend yield of 3% or 4%. This could be achieved by grouping high yielding stocks with low yielding dividend growth stocks. The high yielding stocks typically are slow growing and would provide current income. The low yielding stocks would have a growth component, which would ensure purchasing power protection from inflation. If an investor decides to create a diversified dividend portfolio with 40 individual stocks in it, they could purchase 20 dividend growth stocks yielding 2% or 3% on average and 20 stocks which yield 5% – 6% on average in order to obtain a portfolio yield of 4% for example. Examples of high yielding stocks that could used in this strategy include Realty Income (O), master limited partnerships such as Kinder Morgan Energy (KMP) ,utilities companies such as Con Edison (ED) or telecom firms such as AT&T (T).
To summarize, investors do not need to choose between yield and dividend growth. Instead, they could create portfolios where they take advantage of both.
Full Disclosure: Long JNJ, MCD, WMT, O, KMP, ED, T,
Relevant Articles:
- Four High Yield REITs for current income
- Dividend Grouping for Dividend Income
- Highest Yielding Dividend Stocks of S&P 500
- Dividend Growth beats Dividend Yield in the long run
How to increase your dividend income with these four stocks
Jun 9th
Dividend investing could be helpful for those investors who are trying to establish a viable income stream that would support their lifestyle in retirement. To get to that point however, investors have to give themselves several years of regular investing in income producing assets that they understand, before they generate enough in dividend income. While the recent financial crisis has not let the universe of dividend stocks unscatered, most diversified portfolios did not experience large drops in incomes. Dividend investing is different than traditional retirement investing strategies, since it focuses on living off the income stream generated by the portfolio and does not focus on selling a chunk of one’s portfolio each year in retirement.
There are three major factors, which will allow you to build a viable income stream in retirement.
The first one is to invest in dividend growth stocks, or companies which have followed a policy of regular dividend increases for at least ten years. While companies cannot control the dividend yields or the stock prices their securities are selling for in the public markets, they could control the amount of distributions paid to stockholders on a quarterly or annual basis. Good starting places for investors interested in researching companies with long dividend growth histories are the dividend achievers, the dividend aristocrats and the dividend champion’s lists. The goal is to include companies which raise dividends consistently in order to produce an income stream which increases at or above the average rate of inflation. Two companies which have managed to achieve that over the past four or five decades include Johnson & Johnson (JNJ) and Procter & Gamble (PG).
Johnson & Johnson (JNJ) is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. Johnson & Johnson owns more than 250 operating companies under 3 segments – Consumer, Pharmaceutical as well as Medical Devices and Diagnostics. Johnson & Johnson has increased its dividend for forty-seven consecutive years. This dividend aristocrat has a ten year distribution growth rate of 13.30% per year. Check my analysis of the stock. Yield: 3.60%
The Procter & Gamble Company (PG) is focused on providing branded consumer packaged goods. The Company’s products are sold in over 180 countries worldwide primarily through mass merchandisers, grocery stores, membership club stores, drug stores and in high-frequency stores, the neighborhood stores, which serve consumers in developing markets. The Company was organized into three Global Business Units: Beauty; Health and Well-Being, and Household Care. Procter & Gamble has increased its dividend for fifty-three consecutive years. This dividend aristocrat has a ten year dividend growth rate of 10.70% per year. Check my analysis of the stock. Yield: 3.10%
The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. Coca Cola has increased dividends for 48 consecutive years. This dividend aristocrat has a ten year distribution growth rate of 10.00% per year. Check my analysis of the stock. Yield: 3.30%
Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. This dividend champion has rewarded shareholders with dividend raises for 47 years in a row. The company has a ten year dividend growth rate of 12.90%. Check my analysis of the stock. Yield: 2.70%.
The second tool that would help investors increase their dividend income is the power of dividend reinvestment. During the accumulation stage, dividends should be re-invested back by purchasing more stock, which further compounds investment returns over time.
The last but not least factor includes portfolio contributions on a regular basis. The general rule of thumb is that for each dollar saved in your twenties in stocks, one would be able to generate one dollar in income in their sixties. Therefore, investing even only a small amount regularly should add to the income potential of one’s portfolio.
Let’s illustrate this point with the following example. Let’s assume that we have an investor with $1000 at the end of 1979. They have selected Johnson & Johnson (JNJ) as their investment choice and have three options to consider:
1) Spend all of their dividends and never contribute anything to the portfolio
2) Reinvest dividends in JNJ stock
3) Reinvest dividends in JNJ stock and also add $100 to the account each year
By the end of 2009 the first option would be generating almost $1169 in annual dividend income, for an yield on cost of 116.90%. The second option would be generating $2072 in annual dividend income, while the third option would be generating $3228 in annual dividend income. With the last option, the investor would have invested a total of $4000 throughout their lifetime.
To check the calculations behind the chart, open the spreadsheet from this location.
Full Disclosure: Long CL, JNJ,KO and PG
Relevant Articles:
- Dividend Aristocrats List for 2010
- The case for dividend investing in retirement
- Dividend Grouping for Dividend Income
- Inflation Proof your income in retirement with Dividend Stocks
A record 22 companies boost dividend payouts
Apr 30th
Over the past week twenty-two companies announced that they would be rewarding shareholders with higher dividend payouts. Several solid blue chip companies such as IBM, Costco and Exxon Mobil raised their payouts as well.
In order to make it easier to read through the list, I have separated the number of companies into three lists: Dividend Achievers and Dividend Aristocrats; Master Limited Partnerships; and Dividend Growth Stocks.
Dividend Achievers and Dividend Aristocrats
Dividend Achievers are companies which have boosted payouts for at least ten consecutive years. Companies that are members of the elite Dividend Aristocrats index, are members of the S&P 500 and have raised distributions for over a quarter of a century.
International Business Machines Corporation (IBM) is an information technology (IT) company. The company increased its dividend by 18% to 55 cents/share. This is the 15th year in a row that IBM has increased its quarterly cash dividend. This dividend achiever yields 2%. (analysis)
W.W. Grainger, Inc. (GWW) and its subsidiaries distribute facilities maintenance and other related products and services in the United States, Canada, Japan, and Mexico. The company raised its quarterly dividend by 17% from $0.46 to $0.54 per share. This is the thirty-ninth dividend increase in a row for this dividend aristocrat. The stock yields 2%. (analysis)
Exxon Mobil Corporation (XOM) engages in the exploration, production, transportation, and sale of crude oil and natural gas. The company raised its quarterly dividends to 44 cents/share, up from 42 cents/share. This is the twenty-eight consecutive annual dividend increase for this dividend aristocrat. The stock yields 2.60%. (analysis)
Chevron Corporation (CVX) operates as an integrated energy company worldwide. The company raised its quarterly dividends by 5.90% 72 cents/share. This is the twenty-third consecutive annual dividend increase for this dividend achiever. The stock yields 3.50%. (analysis)
Cullen/Frost Bankers, Inc., (CFR) through its subsidiaries, provides various banking and financial products and services primarily in Texas. The company increased its quarterly dividend by 4.70% to 45cents/share. This is the seventeenth consecutive annual dividend increase for this dividend achiever. The stock yields 3%.
Community Bank System, Inc. (CBU) operates as the holding company for Community Bank, N.A. that provides various banking and financial services to the retail, commercial, and municipal customers. It offers loans and accepts deposits. The Company’s Board of Directors approved a $0.02, or 9.1%, increase in its quarterly dividend on its common stock, to $0.24 per share. This is the seventeenth consecutive annual distribution increase for this dividend achiever. The stock yields 3.70%.
Williams Partners L.P. (WPZ) is a limited partnership formed that owns, operates and acquires a portfolio of energy assets. This master limited partnership announced that the distribution its unit holders receive has been increased to $0.6575 per unit, a 3.5% increase over the previous dividend of $0.635. The partnership has consistently raised annual distribution since 2006. The units yield 6.30%.
Inergy Holdings, L.P. (NRGP) is engaged in the investment in propane and other natural gas liquids companies. This master limited partnership announced an increase in its quarterly cash distribution to $0.975 per limited partner unit, which was a 3.7% increase over the previously declared quarterly distribution. Inergy has boosted distributions since 2006. The stock yields 5.40%.
Holly Energy Partners, L.P. (HEP) operates a system of petroleum product and crude oil pipelines, storage tanks, distribution terminals, and loading rack facilities. This master limited partnership declared an increase in its distribution to $0.815 per unit, up from $0.805 that was distributed last quarter. Holly Energy Partners, L.P. has consistently boosted distributions since 2005. The units yield 6.90%.
Sunoco Logistics Partners L.P. (SXL) engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. The company increased quarterly distribution to $1.11 per share, from $1.09 prior. This master limited partnership has consistently raised distributions almost every quarter since 2002. The units yield 6.60%.
Alliance Holdings GP, L.P., (AHGP) through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. The company announced a boost in its quarterly distribution to 46.5 cents/share which represents a 12.0% increase over the $0.415 per unit distribution (for the quarter ended March 31, and an increase of 2.8% over the fourth quarter 2009 distribution of $0.4525 per unit. This master limited partnership has consistently boosted distributions since 2007. The units yield 5.60%.
Future Dividend Growth Stocks
EarthLink, Inc. (ELNK) is an Internet service provider (ISP), providing nationwide Internet access and related value-added services to individual and business customers. The company’s Board of Directors has increased the amount of its quarterly cash dividend on its common stock from $0.14 per share to $0.16 per share. This is the first dividend increase since EarthLink initiated a dividend policy in 2009. The stock yields 7.40%.
Ameriprise Financial, Inc. (AMP) provides financial planning, products and services that are designed to be utilized as solutions for its clients’ cash and liquidity, asset accumulation, income, protection, and estate and wealth transfer needs. The company raised its quarterly dividend from $0.17 to $0.18. The company has had higher annual dividend payments for four years in a row. The stock yields 1.50%.
Costco Wholesale Corporation (COST) operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. The company approved a quarterly increase from $0.18 to $0.205 per share. This is the sixth consecutive dividend increase since the company initiated a dividend policy in 2004. The stock yields 1.40%.
Kellogg Company (K), together with its subsidiaries, engages in the manufacture and marketing of ready-to-eat cereal and convenience foods. The Company’s Board of Directors announced plans to increase the quarterly dividend by 8% to $0.405 per share beginning with the third quarter of 2010. This would have been the sixth consecutive dividend increase for the company. The stock yields 2.90%.
International Paper Company (IP) operates as a paper and packaging company with operations in North America, Europe, Latin America, Russia, Asia, and North Africa. The company approved an increase in its quarterly common stock dividend from $0.025 per share to $0.125 per share. This is the first dividend increase since the company slashed distributions by 90% in 2009. The stock yields 1.70%.
Celanese Corporation (CE) is an integrated producer of chemicals and advanced materials. The company approved a 25% increase in the company’s quarterly dividend to $0.05 per share. The stock yields 0.60%.
Legg Mason, Inc., (LM) through its subsidiaries, operates as a diversified group of global asset management firm serving individual and institutional investors worldwide. The company’s Board of Directors has declared a quarterly cash dividend on its common stock in the amount of $0.04 per share which is a 33.33% increase over the previous dividend of $0.03. This is the first dividend increase for the company since it slashed dividends by 87.50 % in 2009 and lost its status as a dividend aristocrat after just one year in the elite index. The stock yields 0.50%.
Valmont Industries, Inc. (VMI) produces fabricated metal products; pole and tower structures; and mechanized irrigation systems in the United States and internationally. The board of directors increased the Company’s quarterly cash dividend by 10% from $0.15 to $0.165 per share. This is the ninth consecutive annual dividend increase for the company. The stock yields 0.80%
Sturm, Ruger & Company, Inc. (RGR) engages in the design, manufacture, and sale of firearms in the United States. The company increased its quarterly dividend by 55% to 9.3 cents/share. The stock yields 2.10%.
TransAlta Corporation (TAC) operates as a non-regulated electricity generation and energy marketing company. The company raised its quarterly dividends by 6.40% to 29 cents/share. This is the third consecutive annual dividend increase for the company.The stock yields 5.60%.
Duff & Phelps Corporation (DUF), through its subsidiaries, provides independent financial advisory and investment banking services worldwide. The company increased quarterly dividend by 20% to $0.06 per share. This is the first dividend increase for the company since its started paying dividends in 2009. The stock yields 1.50%.
The list of dividend increases should not be viewed as a buy recommendation. Readers are advised to use it only as a starting reference point for further research, provided that any of those companies interest you.
Full Disclosure: Long CVX, GWW and XOM
Relevant Articles:
- Dividend Aristocrats List for 2010
- What Dividend Growth Investing is all about?
- Dividend Growth beats Dividend Yield in the long run
- Dividend Investors are getting paid for waiting
Dividend Growth beats Dividend Yield in the long run
Mar 4th
As an individual investor and blogger I do what I preach. I have a dividend portfolio which consists of almost 40 individual issues, most of them dividend achievers or aristocrats. I often get criticized by readers for writing about stocks which many seem to have a low current yield, despite having a history of increasing in dividends. Those readers believe that finding a high yielding stock is the best income play for the long term. In other words stocks that pay over 8% but do not raise distributions are viewed favorably than stocks which currently yield 2%-3%, but grow their dividends consistently.
The reason why I consider dividend growth investing a superior investment strategy is because it focuses not only on delivering a rising stream of income but also on total returns. To the untrained eye it might appear that investing in Abbott Labs (ABT) or Johnson & Johnson (JNJ) is a poor choice, especially since these companies yield 3%. The main advantage of these companies of course is that they have always paid a low current dividend yield, but have grown their payment in the process. The stock price typically adjusts upward, which decreases the current yield to a normal range. Thus these dividend growth stocks deliver total returns which high yielders cannot match in the long run. In addition to that the rising dividend payment increases the yield on cost on the original investment.
Let’s illustrate this with an example. Abbott Labs (ABT) is a dividend aristocrat which has raised distributions for 37 years in a row. It yields 3% right now, but has a ten year dividend growth rate of 9%. At this rate the company would double its dividend every 8 years. The growth has slowed over the past decade however – since 1983 the dividend growth was almost 13.1% per annum. The stock yielded 2.2% in 1983, which was hardly under the radar of any yield chaser. In fact the current yield at year-end for Abbott fluctuated between a low of 1.20% in 1998 and a high of 2.89% in 2009. The visionary investor who purchased Abbott at the end of 1983 achieved a yield on cost of 10% in 1992 in addition to holding onto a five-bagger. Twenty six years later this investor would have achieved a yield on cost of 55%, which is something that even the highest yielding stock out there cannot match.
An investor in a high yielding stock in 1983 would have most likely kept on receiving a high current yield for a long period of time. The main issue with this scenario is that the purchasing power of the flat dividend payment would have been cut in half over the past quarter of a century. Similarly an investor in 30 year US Treasury Bonds would have kept receiving the same amount of income each year. Check my analysis of Abbott Labs.
Other companies which have a long history of raising dividends while also delivering a strong dividend growth, plus being attractively valued at the moment include Johnson & Johnson (JNJ) and Clorox (CLX).
Johnson & Johnson (JNJ) has raised distributions for 47 years in a row. The company has achieved a 10 year dividend growth rate of 13.30%. The latest dividend increase was 6.50% in 2009. The dividend payout ratio is at 43%, which makes it adequately covered. Check my analysis of the stock.
Clorox (CLX) has boosted dividends for 32 consecutive years. The company has achieved a ten year compound dividend growth rate of 9.60%. The company last raised its payout by 8.7% in 2009. Its dividend payout is at 50% right now, which means that the dividend is well-covered from earnings. Check my analysis of the stock.
Full Disclosure: Long ABT, CLX and JNJ
Relevant Articles:
Twenty Dividend Increases in the news
Mar 4th
Last week was like a record week for dividend increases so far in 2010. I have included 20 dividend stocks which increased distributions for the week. I separated the dividend increasers into dividend growth stocks and potential dividend achievers.
Dividend Growth Stocks
The stocks which I classify as dividend growth stocks include the dividend achievers, dividend aristocrats and dividend champions. These are all stocks which have increased distributions for over ten years in a row. A rising dividend payment would increase your yield on cost over time, despite the average current yield on most issues being close to the yields on major market indices.
Colgate-Palmolive Company, (CL) together with its subsidiaries, manufactures and markets consumer products worldwide. The company increased its quarterly dividend by 20.40% to 53 cents/share. This is the forty-seventh consecutive dividend increase for Colgate-Palmolive, which is a dividend champion. The stock yields 2.70%. (analysis)
Commerce Bancshares, Inc., (CBSH) is a bank holding company, engages in general banking business. It offers retail, corporate, investment, trust, and asset management products and services to individuals and businesses. The company hiked its quarterly dividend by 2.80% to 23.50 cents/share. Commerce Bancshares is a dividend champion, which has raised dividends for forty-two years in a row. The stock currently yields 2.50%. (analysis)
Archer-Daniels-Midland Company (ADM) procures, transports, stores, processes, and merchandises agricultural commodities and products in the United States and internationally. The company raised its quarterly dividend by 7.10% to 15 cent/ share. This dividend aristocrat has raised distributions for thirty-five years in a row. The stock currently yields 2%. (analysis)
Bemis Company, Inc. (BMS) manufactures and sells flexible packaging products and pressure sensitive materials primarily in the United States, Canada, Mexico, South America, Europe, and the Asia Pacific. The company’s board of directors approved a 2.20% increase in its quarterly distributions to 23 cents/share. Bemis is a dividend aristocrat, which has managed to boost dividends for twenty-seven consecutive years. The stock yields 3.20%. (analysis)
Health Care Property Investors, Inc. (HCP) operates as a real estate investment trust in the United States. The company raised its dividends by 1.10% to 46.5 cents/share. This is the twenty fourth consecutive annual dividend increase for this dividend achiever. The stock currently yields 6.40%.
Ross Stores, Inc.,(ROST) together with its subsidiaries, operates two chains of off-price retail apparel and home accessories stores in the United States. The company raised its dividends by 45% to 16 cents/share. Ross Stores is a dividend achiever which has raised distributions for 16 consecutive years. The stock yields 1.40%.
Potential Dividend Achievers
AGL Resources Inc.,(AGL) an energy services holding company, engages in the distribution of natural gas primarily in Florida, Georgia, Maryland, New Jersey, Tennessee, and Virginia. The company boosted its dividend by 2.30% to 44 cents/share. This is the eight consecutive annual dividend increase since 2003. The stock currently yields 4.90%.
L-3 Communications Holdings, Inc. (LLL) provides command, control, communications, intelligence, surveillance, and reconnaissance (C3ISR) systems; and aircraft modernization and maintenance, and government services in the United States and internationally. The company hiked its quarterly dividend by 14% to 40 cents/share. This is the sixth consecutive annual dividend increase for the company. The stock yields 1.90%.
J.B. Hunt Transport Services, Inc. (JBHT), together with its subsidiaries, operates as a surface transportation company in North America. The company announced its plans to boost dividends by 9% to 12 cents/share. This is the sixth consecutive dividend increase for the company since 2004. The stock currently yields 1.40%.
Boardwalk Pipeline Partners, LP, (BWP) through its subsidiaries, engages in the interstate transportation and storage of natural gas in the United States. This master limited partnership raised its distributions to 50 cents/unit. Boardwalk Pipeline Partners has raised distributions every quarter since going public in 2006. The units currently yield 6.50%.
The Dun & Bradstreet Corporation (DNB) provides commercial information and insight on businesses worldwide. The company raised its quarterly dividend to 35 cents/share. This is the third consecutive dividend increase since the company started paying dividends in 2007. The stock yields 1.70%.
PennantPark Investment Corporation (PNNT) is a publicly listed business development firm specializing in direct and mezzanine investments in middle market companies. The company raised its quarterly distributions by 4% to 26 cents/share. This is the second quarterly distribution increase for this BDC over the past one year. The company is on track to record dividend increases for a third year in a row. The stock yields 11.40%.
Unitrin, Inc., (UTR) through its subsidiaries, engages in the property and casualty insurance, life and health insurance, and automobile finance businesses primarily in the United States. The company raised its dividends by 10% to 22 cents/share. This is the first dividend increase since the company cut distributions in 2008. The stock yields 3.40%.
News Corporation (NWS) (NWSA) operates as a diversified media company worldwide. The company raised its dividends by 25% to 7.5 cents/share. The company currently yields 1.10% and also does not have a history of consistent dividend increases.
Time Warner Inc (TWX) operates as a media and entertainment company in the United States and internationally. It operates in three segments: Networks, Filmed Entertainment, and Publishing. The company announced plans to boost its dividend by 13.30% to 21.25 cents/share. This is the first dividend increase since 2007. The stock currently yields 3.10%.
The Hershey Company (HSY) engages in manufacturing, marketing, selling, and distributing various chocolate and confectionery products, food and beverage enhancers, and gum and mint refreshment products. The company raised its dividends by 7.60% to 32 cents/share. This is the first dividend increase for the company since 2007. The stock currently yields 3.40%.
Source Capital Inc. (SOR) is a close-ended equity fund launched and managed by First Pacific Advisors, LLC. The fund invests in the public equity markets of the United States. The company raised its dividends by 20% to 60 cents/share. Source Capital has fluctuating dividends. The stock yields 9.40%.
Hasbro, Inc. (HAS) engages in the design, manufacture, and marketing of games and toys. The company raised its dividends by 25% to 25 cents/share. This was the first dividend increase for Hasbro since 2008. The stock yields 3.20%.
United Parcel Service, Inc. (UPS), a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. The company raised its payment by 4.40% to 47 cents/share. This is the first dividend increase for UPS since 2008.
Temple-Inland Inc. (TIN), through its subsidiaries, manufactures corrugated packaging and building products primarily in the United States and Mexico. The company raised its dividend by 10% to 11 cents/share. The stock currently yields 2.60%.
Full Disclosure: Long ADM,
Relevant Articles:
- Why do I like Dividend Achievers
- Dividend Aristocrats List for 2010
- Twelve Dividend Stocks Increasing Dividends
- Dividend Investors are getting paid for waiting
Twelve Dividend Stocks Increasing Dividends
Feb 1st
A dividend increase is generally a bullish sign, which reflects management’s optimistic view on the near term prospects for the company. The sign of dividend increases is especially bullish for companies which have raised distributions for over one decade. One has to be careful however to avoid the excessively high yielding stocks which might not be able to sustain future dividend payments. Investors should also avoid chasing dividend growth stocks which don’t have a long history of dividend increases.
Several companies announced their intent to increase distributions to shareholders. I have separated the dividend raisers of the past week in three groups: dividend achievers, champions and aristocrats; master limited partnerships; and potential dividend achievers
Kimberly-Clark Corporation (KMB), which engages in the manufacture and marketing of health and hygiene products worldwide, announced that a high single-digit to low double-digit increase in the dividend is anticipated effective April 2010, subject to approval by the Board of Directors.. The company typically raises distributions in February. Kimberly-Clark Corporation is a dividend aristocrat, which has increased its quarterly dividend in each of the past thirty=seven consecutive years. The stock currently yields 3.90%. (analysis)
Praxair, Inc. (PX), which engages in the production and distribution of industrial gases, increased its quarterly dividend by 13% to 45 cents per share. Praxair, Inc. is a dividend achiever, which has increased its quarterly dividend in each of the past seventeen consecutive years. The stock currently yields 2.40%.
Energen Corporation (EGN), which is engages in the development, acquisition, exploration, and production of oil, natural gas, and natural gas liquids in the continental United States, increased its quarterly dividend by 4% to 13 cents per share. Energen Corporation is a dividend achiever, which has increased its quarterly dividend for twenty-eight consecutive years. The stock currently yields 1.10%.
SJW Corp. (SJW), engages in the production, purchase, storage, purification, distribution, and retail sale of water, increased its quarterly dividend by 3% to 17 cents per share. SJW Corp. is a dividend champion, which has increased its quarterly dividend in each of the past forty-three consecutive years. The stock currently yields 3.00%.
El Paso Pipeline Partners, L.P. (EPB), which engages in the ownership and operation of natural gas transportation pipelines and storage assets in the United States, increased its quarterly distributions to 36 cents per unit. This is the eight consecutive quarterly distribution increase for the company since going public in 2007. The stock currently yields 5.60%.
Holly Energy Partners, L.P. (HEP), which operates a system of refined product and crude oil pipelines, storage tanks, and distribution terminals primarily in west Texas, New Mexico, Utah, and Arizona, increased its quarterly distribution to 80.5 cents per unit. Holly Energy has increased its distribution to unit holders every quarter since becoming a public partnership in July 2004. This increase marks the twenty-first consecutive quarterly increase. This master limited partnership currently yields 7.60%.
Sunoco Logistics Partners (SXL), which engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States, increased its quarterly distributions by $1.09 per unit. This master limited partnership has consistently raised distributions since 2002. Sunoco Logistics Partners currently yields 6.00%.
Inergy Holdings GP, LLC, (NRGP), has ownership interest in Inergy, L.P. that engages in the
sale, distribution, storage, marketing, trading, processing, and fractionation of propane, natural gas, and other natural gas liquids to residential, commercial, industrial, and agricultural customers. This master limited partnership increased its quarterly distributions to 94 cents per unit. Inergy Holdings GP, LLC has increased its quarterly distributions since 2005. Inergy Holdings GP, LLC, currently yields 5.20%.
Potential Dividend Achievers
Rollins, Inc. (ROL), which provides pest and termite control services, and protection against termite damage, rodents, and insects, increased its quarterly dividend by 28.60% to 9 cents per share. Rollins, Inc. has only raised distributions since 2002. The stock currently yields 1.80%.
National Instruments (NATI), which is one of the top telecommunications companies in the US, increased its quarterly dividend by 8% to 13 cents per share. This is the 7th consecutive increase in distributions since the company initiated a dividend policy in 2002. The stock currently yields 1.70%.
Airgas (ARG), which distributes industrial, medical, and specialty gases, as well as hardgoods in the United States, increased its quarterly dividend by 22.20% to 22 cents per share. Airgas has raised dividends since 2003 The stock currently yields 2.00%.
CMS Energy (CMS), which is operates as an energy company primarily in Michigan, increased its quarterly dividend by 20% to 15 cents per share. This is the third consecutive dividend increase since CMS Energy started paying dividends again in 2007. The stock currently yields 3.95%.
Full Disclosure: Long KMB
Relevant Articles:
- Dividend Aristocrats List for 2010
- Master Limited Partnerships (MLPs) – an island of stability for dividend investors
- Dividend Investing vs Trading
- High yield stocks for current income
Busy week for dividend increases
Jan 22nd
January is typically a busy month for dividend increases. The past week has most probably accounted for the majority of the increases for the month already. Increasing a company’s dividend for another consecutive year reflects management’s strong financial position and their confidence in the long-term growth opportunity of the company. I have summarized the increases by several types – dividend aristocrats and achievers, Berkshire Hathaway Holdings and potential dividend achievers.
Dividend Aristocrats and Achievers
The dividend aristocrats list includes companies which have increased dividends for over 25 years in a row. It is equally weighted and re-balanced once a year. To become a dividend achiever a company must have increased its annual regular dividend payments for the last ten or more consecutive years.
Consolidated Edison, Inc. (ED), which provides electric, gas, and steam utility services in the United States, increased its quarterly dividend by 0.85% to 59.50 cents per share. Consolidated Edison, Inc. is a dividend aristocrat, which has increased its quarterly dividend for thirty-six consecutive years. The stock currently yields 5.10%. (analysis)
McGraw-Hill Companies (MHP), which provides information services and products to the financial services, education, and business information markets worldwide, increased its quarterly dividend by 4.40% to 23.50 cents per share. This is the 37th consecutive annual dividend increase for this dividend aristocrat. McGraw-Hill also announced that it will buy back over time the 17.1 million shares remaining in its share repurchase program approved by the Board in 2007. The stock currently yields 2.70%. (analysis)
Family Dollar Stores, Inc. (FDO), which operates a chain of self-service retail discount stores for low to lower-middle income consumers in the United States, increased its quarterly dividend by 14.80% to 15.50 cents per share. Family Dollar Stores, Inc. is a dividend aristocrat, which has increased its quarterly dividend in each of the past thirty-four consecutive years. The stock currently yields 2.00%. (analysis)
Polaris Industries Inc. (PII), which designs, engineers, and manufactures off-road vehicles, raised its quarterly dividend by 3% to 40 cents per share. This represents the 15th consecutive year of Polaris increasing its dividend. This dividend achiever currently yields 3.50%.
Berkshire Hathaway Holdings
These companies are owned by Berkshire Hathaway (BRK.A)
Wesco Financial Corporation (WSC), which engages in insurance, furniture rental, and steel service center businesses in the United States, increased its quarterly dividend by 2.40% to 42 cents per share. This is the thirty-seventh annual dividend increase for this dividend champion. The largest shareholder in the company is Buffett’s Berkshire Hathaway (BRK.A). The stock currently yields only 0.40%.
Washington Post Company (WPO), which operates as a diversified education and media company in the United States and internationally, increased its quarterly dividend by 4.60% to $2.25 per share. Washington Post Company also announced plans to buy back up to 750,000 shares. One of the company’s largest shareholders is Warren Buffett. Despite the fact that the company hasn’t raised dividends each year, it has been able to boost distributions every other year. However the stock currently yields 1.90%, and the dividend is not well covered.
Potential Dividend Achievers
These are the companies which could become members of the dividend achievers index if the keep raising annual distributions for the next few years.
Omega Healthcare Investors, Inc. (OHI), a self-administered real estate investment trust (REIT), which invests primarily in long-term healthcare facilities in the United States, increased its quarterly dividend by 6.70% to 32 cents per share. This is the first increase for the company since 2008. Omega Healthcare Investors, Inc. has increased its quarterly dividend in each of the past six years. The company had previously eliminated distributions for 2001 and 2002. The stock currently yields 6.00%.
Enterprise Bancorp, Inc. (EBTC), which operates as the holding company for Enterprise Bank and Trust Company that provides various banking products and services, increased its quarterly dividend by 5.30% to 10 cents per share. Enterprise Bancorp, Inc. has increased its dividends for 15 years in a row. However the company has been publicly traded only since 2005. The stock currently yields 3.70%.
ONEOK, Inc. (OKE), which engages in the purchase, transportation, storage, and distribution of natural gas in the United States and Canada, increased its quarterly dividend by 4.80% to 44 cents per share. ONEOK, Inc. is a general partner of ONEOK Partners L.P. (OKS) and has raised dividends for 8 consecutive years. The stock currently yields 3.70%.
ONEOK Partners, L.P. (OKS), which engages in the ownership and management of natural gas gathering, processing, storage, and interstate and intrastate pipeline assets, as well as natural gas liquids (NGLs) gathering and distribution pipelines, increased its quarterly distribution $1.10 per unit. This master limited partnership has increased its quarterly distributions in each of the past five consecutive years. The units currently yield 6.80%.
Spectra Energy Partners, LP (SEP), which engages in the transportation of natural gas through interstate pipeline systems, and the storage of natural gas in underground facilities in the United States, increased its quarterly dividend from 40 to 41 cents per unit. This is the ninth consecutive quarterly distribution increase for Spectra Energy Partners, LP since it went public in 2007. This master limited partnership currently yields 5.30%.
Tiffany & Co. (TIF), which engages in the design, manufacture, and retail of fine jewelry., increased its quarterly dividend by 18% to 20 cents per share. In addition to that the company announced that it would be resuming its stock buyback plan. Tiffany & Co. has increased its annual dividend in each of the past eight years. The stock currently yields 1.50%.
Pall Corporation (PLL), which manufactures and markets filtration, purification, and separation products and integrated systems solutions worldwide, increased its quarterly dividend by 10.30% to 16 cents per share. This is the sixth consecutive dividend increase for Pall Corporation since the company cut dividends in 2002. The stock currently yields 1.50%.
Finish Line, Inc. (FINL), which operates as a mall-based specialty retailer in the United States, increased its quarterly dividend by 33% to 4 cents per share. This is only the second dividend increase from the company since 2007. The stock also currently yields only 1.40%, which coupled with the short history of dividend raises makes it a pass for now.
Summary
I like Con Edison (ED) as a stock better suited for current income. McGraw-Hill Companies (MHP) looks like an interesting position to add on dips below $31.30. Polaris Industries Inc. (PII) also looks like an interesting company that I would add to my list for further research.
Full Disclosure: Long FDO, ED and MHP
Relevant Articles:
- Buffett the dividend investor
- 3 dividend increases, more expected in January
- 2010’s Top Dividend Plays
- Dividend Aristocrats List for 2010
- A Strong week for MLP distributions
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