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Fri. Sep. 4, 2009

Dividend Stocks Offer Continuous Feedback *

One of the many reasons I like dividend stocks is because they provide continuous feedback. As time passes, dividend investors see their income grow steadily. You don’t have to wait five to ten years to determine if the strategy is working. Each dividend and dividend increase provides reassurance that the strategy is working.

When companies like 3M Company (MMM), Emerson Electric (EMR) and Dover Corp. (DOV) put together a string of consecutive dividend increases in excess of 50 years, they are sending a strong message to their shareholders. Below are a few companies with not quite they legacy of those above, but nevertheless are providing positive feedback to their investors by with higher cash dividends:

Teche Holding (TSH) is a bank holding company, with assets of $735.4 million at December 31, 2007, owns Teche Federal Bank, a federal savings bank with 19 offices in Louisiana.  Recently, the company raised its quarterly dividend 0.15% to $0.355/share. The dividend will be paid on September 30, 2009 to shareholders of record as of the close of business on September 16, 2009. The company has paid a cash dividend for 57 consecutive quarters. The current yield based on the new dividend is 4.10%.

Harris Corp. (HRS) focuses on communications equipment for voice, data, and video applications for commercial and governmental customers. This past week, the company increased its quarterly dividend 10% to $0.22/share. The dividend is payable September 18, 2009, to shareholders of record September 9, 2009. The current yield based on the new dividend is 2.61%.

Verizon Communications Inc. (VZ) offers wireline, wireless, and broadband services. VZ acquired MCI Inc in 2006 and has since sold or spun off non-core assets. Also, the company completed the acquisition of Alltel in early 2009. Yesterday, the company bumped its quarterly dividend by 3.3% to $0.475/share. The dividend is payable on Nov. 2, 2009, to Verizon Communications shareholders of record at the close of business on Oct. 9, 2009. The current yield based on the new dividend is 6.31%.

This week the number of companies increasing their dividends may be few, but there are many companies that have done so already, and many more that will do so later this year. For stocks with a long string of consecutive dividend increases, see this list.

Full Disclosure: Long MMM , EMR. See a list of all my income holdings here.

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2 Responses to “Dividend Stocks Offer Continuous Feedback *”

  1. Rick Herbold says:

    Over the years I have changed investment stratagies and styles. At age 64 I have come to realize that dividend stocks, ETFs, CEFs, MLPs and the like are the way to go. Plus, it’s fun looking a the data and learning about companies and their businesses. About 25% of my retirement nest egg is in div paying investments. All pay quarterly … some monthly. Non pay yearly or twice a year (overseas stuff). I like to monitor investments at least quarterly.

    Div payers are the way to go ….I think. Plus, there is always the possibility of a nice cap gain if you choose wisely. The only problem is: it is hard to sell a div payer once it gains 10, 15, 20% in value. I keep spreadsheets on my yield on cost … nice to see 8% or more yield on some old pals in my portfolio.

  2. Rick: Great comments! Thanks for stopping by!

    Best Wishes,
    D4L