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Fri. Jul. 3, 2009

Nine Stocks Giving Shareholders A Raise In The Second Quarter *

In 1985 I graduated from college and took my first job as a staff accountant with a $21,000 annual salary. Now I am over the same department that I was hired into and entry level staff accountants start with a base salary of $56,500 per year. That equates to a 4.2% annual increase. Just as employees expect an annual raise, so do dividend investors.

Understanding the importance of increasing dividends, these big-name companies raised their dividends in the second quarter:

  • Cardinal Health (CAH) – Yield: 2.28% – Analysis
  • Clorox (CLX) – Yield: 3.53% – Analysis
  • Del Monte Foods (DLM) – Yield: 2.08%
  • IBM (IBM) – Yield: 2.10%
  • Johnson & Johnson (JNJ) – Yield: 3.43% – Analysis
  • PepsiCo (PEP) – Yield: 3.18% – Analysis
  • Target (TGT) – Yield: 1.76%

Just this last week these two companies rewarded their shareholders with increased cash dividends:

General Mills (GIS) is a major producer of packaged consumer food products, including Big G cereals and Betty Crocker desserts/baking mixes. On June 29th, the company announced a 9% increase to its dividend to $0.47/share. The dividend is payable August 3, 2009, to shareholders of record July 10, 2009.  At the new rate, the stock is yielding 3.23%.

MFA Financial (MFA) is a real estate investment trust that invests in secured by pools of mortgages on single family residences. This week MFA increased it quarterly dividend by 13.6% to $0.25/share. The ex-dividend date is July 9, 2009 and the dividend will be paid on July 31, 2009 to stockholders of record on July 13, 2009.  At the new rate, the stock is yielding 14.29%.

The first step to identify excellent income stocks is to look for those that increase their dividend each year. For stocks with a long string of consecutive dividend increases, see this list.

Full Disclosure: Long CLX, JNJ, PEP. See a list of all my income holdings here.

(Photo Credit)
distributes and markets private label food and pet products.

4 Responses to “Nine Stocks Giving Shareholders A Raise In The Second Quarter *”

  1. The funny part is that when I started working as a staff accountant several years ago, I made exactly double what you were making in 1985. ( w/o the bonus part)

  2. There’s another blogger who dug up a stock that’s grown its dividend for each of the last ten years, but this stock’s not one for prudent hearts:

    http://buylikebuffett.com/index.php/2009/07/is-supervalu-a-value-stock , where the fellow is recommending Supervalu [SVU]

  3. SVU’s debt to total cap of 73% and a couple years of negative free cash flow keep me from giving it serious consideration.

    Best Wishes,
    D4L

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