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Fri. Apr. 23, 2010

16 Dividend Stocks Providing An Inflation Hedge *

With all the other investment strategies out there, why should investors consider dividend or income investing? There are a multitude of reasons to follow a dividend growth strategy. These include: investment stability, security of cash, continuous feedback, potential higher returns, low maintenance, et. al. But for me the most important reason is the inflation hedge that a growing dividend will provide in my retirement years.

Below are several companies building an inflation hedge for their shareholders by increasing their cash dividends:

TransMontaigne Partners (TLP) provides terminaling, storage and related services to petroleum related companies. April 16th the company increased its quarterly distribution 2% to $0.60/share. The distribution is payable on May 11, 2010 to unitholders of record on April 30, 2010. The ex-distribution date is April 28, 2010. The yield based on the new payout is 8.21%.

Citizens & Northern Corp. (CZNC) provides banking and mortgage services to individuals and corporate customers in Pennsylvania and New York. April 19th raised its quarterly dividend 12.5% to $0.09/share. The dividend is payable May 14, 2010 to shareholders of record as of May 3, 2010. The ex-dividend date is May 29. The yield based on the new payout is 2.94%.

Procter & Gamble (PG) is a leading consumer products company markets household and personal care products in more than 180 countries. April 19th the company increases its quarterly dividend 9.5% to $0.4818/share. The dividend is payable on or after May 17, 2010 to shareholders of record at the close of business on April 30, 2010. The ex-dividend date is April 28, 2010. PG is a Dividend Aristocrat and has raised its dividend for 54 consecutive years. The yield based on the new payout is 3.05%.

Magellan Midstream Partners (MMP) is engaged in the transportation, storage and distribution of refined petroleum products primarily through its 9,500-mile pipeline system. April 21st the partnership increases its quarterly distribution 1% to $0.72/share. The distribution is payable May 14 to unitholders of record at the close of business on May 7. The ex-dividend date is May 5, 2010. The yield based on the new payout is 6.00%.

Sonoco (SON) is a manufacturer of paper and plastic packaging products serves various industries. April 21st the company
raised its quarterly dividend 3.7% to $0.28/share. The dividend is payable June 10, 2010, to shareholders of record as of May 14, 2010. The ex-dividend date is May 12. The dividend yield moves from 3.26% to 3.38%. SON is a Dividend Achiever and has paid a higher dividend for 27 consecutive years. The yield based on the new payout is 3.42%.

Renaissance Learning (RLRN) company provides computer-based assessment and periodic progress monitoring technology for pre-kindergarten through senior high schools and districts in North America. April 21st the company raised its quarterly dividend 14% to $0.08/share. The dividend is payable June 1, 2010 to shareholders of record as of May 7, 2010. The ex-dividend date is May 5. The yield based on the new payout is 2.05%.

LSB Corp. (LSBX) provides various financial products and services to the general public primarily in Merrimack Valley in Massachusetts and New Hampshire. April 21st the company increased its quarterly dividend to $0.09/share. The yield based on the new payout is 2.73%.

Fidelity National (FNF) is a provider of title insurance, specialty insurance, claims management services and information services. April 21st the company increased its quarterly dividend to $0.18/share. The yield based on the new payout is 4.76%.

Kinder Morgan (KMP) is one of the largest pipeline master limited partnerships (MLPs) in the U.S. April 21st the partnership raised its quarterly distribution to$1.07/unit. KMP is a Dividend Achiever and has paid a higher dividend for 13 consecutive years. The yield based on the new payout is 6.29%.

Ensco (ESV) provides offshore contract drilling services to the oil and gas industry worldwide. April 22nd the company increased its dividend to $0.35/share. The dividend is payable on 18 June 2010 to holders of Ensco’s American depositary shares (ADSs) as of the 7 June 2010 record date. The ex-dividend date is June 3, 2010. The yield based on the new payout is 2.78%.

Johnson & Johnson (JNJ) is a leader in the pharmaceutical, medical device and consumer products industries. April 22nd the company increases its quarterly dividend 10.2% to $0.54/share. The dividend is payable on June 15, 2010 to shareholders of record as of June 1, 2010. The ex-dividend date is May 28, 2010. JNJ is a Dividend Aristocrat and has raised its dividend for 48 consecutive years. The yield based on the new payout is 3.33%. See detailed Analysis here.

Sensient Tech. (SXT) produces flavors, colors and fragrances for businesses operating in various industries, including food, pharmaceutical and personal care. April 22nd the company increased its quarterly dividend 5.3% to $0.20/share. The dividend is payable on June 1, 2010, to shareholders of record on May 6, 2010. The ex-dividend date is May 3. The yield based on the new payout is 2.53%.

Arch Coal (ACI) the second largest U.S. coal producer. April 22nd the company raised it quarterly dividend 11% to $0.10/share. The dividend is payable June 15 to shareholders of record on June 1. The ex-dividend date is May 28. The yield based on the new payout is 1.45%.

Artesian Resources Corp. (ARTNA) distributes and sells water to residential, commercial, industrial, governmental, municipal, and utility customers in the state of Delaware. April 22nd the company increases its quarterly dividend to $0.19/share. The dividend is payable on May 21, 2010 to shareholders of record at the close of business on May 7, 2010. The ex-dividend date is May 5, 2010. The yield based on the new payout is 4.19%.

J. M. Smucker (SJM) products include coffee, fruit spreads, peanut butter, shortening and oils, ice cream toppings, health and natural foods, and beverages. April 22nd the company increases its quarterly dividend 14% to $0.40/share. The dividend is payable on Tuesday, June 1, 2010, to shareholders of record at the close of business on Friday, May 14, 2010. The ex-dividend date is May 12, 2010. SMJ is a Dividend Achiever. The yield based on the new payout is 2.54%.

STMicroelectronics (STM) is a global semiconductor company makes various semiconductor integrated circuits and discrete devices. April 22nd the company increased its annual dividend to $0.28/share. The yield based on the new payout is 2.68%.

For a stock to be an effective inflation hedge it must raise its dividend each year in excess of the inflation rate. For a list of stocks with a long string of consecutive cash dividend increases, see this list.

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

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