You can’t spend earnings. At first glance, this probably seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important investing axiom for any type of investor. Through fraud and manipulation an income statement can be made to look quite impressive.
An increasing cash dividend keeps pressure on management to ensure the company is well run. If there are too many missteps, then eventually a dividend will slip. Earnings can be manufactured, cash can not. Always follow the cash and it just might lead you to a great company. Here are eight stocks striving to be a great by raising their cash dividends:
- Stryker (SYK) Boosts Dividend 21% to $0.40/Share (0.88%)
- Lincoln Electric (LECO) Raises Qtr. Dividend by 8% to $0.27/Share (2.27%)
- OGE Energy (OGE) Boosts Annual Dividend 3c to $1.42/Share (5.57%)
- J & J Snack Foods (JJSF) Boosts Qtr. Dividend by 5.4% to $0.0975/Share (1.22%)
- Wisconsin Energy (WEC) Raises Qtr. Dividend by 25% to $0.3375/Share (2.61%)
- AXIS Capital (AXS) Increases Qtr. Dividend by 8% to $0.20/Share (3.05%)
- Ecolab Inc. (ECL) Increases Qtr. Dividend by 8% to $0.14/Share (1.47%)
- Universal Health Realty (UHT) Raises Qtr. Dividend to $0.59/Share (1.47%)
After running these companies through my D4L-PreScreen.xls model, the Dividend Achiever UHT is worthy of a more complete evaluation with a NPV of MMA Differential of $9,282. None of the other companies’ NPV of MMA Differentials were close enough to warrant a more complete evaluation.
Disclosure: No position in the aforementioned stocks.
(Photo: Steve Woods)