I am not a stock trader; I am a dividend and value based long-term buy-and-hold investor. When I add a stock to my dividend portfolio, it is my intention to hold the stock forever. I am not smart enough to time the daily gyrations of the stock market. When stock prices start dropping, our primal instinct of flight kicks in and we want to sell. In many cases that is the time to be buying. However, sometimes selling a stock is the right thing to do. In determining when to sell a dividend stock, I have one hard and fast rule: When an individual stock held as a dividend investment lowers its dividend, immediately sell it.
Below are four companies making the case not to be sold by raising their cash dividends:
Lowe’s (LOW) retail outlet for building materials and supplies, lumber, hardware and appliances through more than 1,700 stores in the U.S. and Canada. May 28th the company increased its quarterly dividend 22% to $0.11/share. The dividend is payable on August 4 to shareholders of record on July 21. The ex-dividend date is July 19. LOW is a Dividend Aristocrat and has raised its dividend for 48 consecutive years. The yield based on the new payout is 1.80%.
Greif (GEF) produces industrial packaging products with manufacturing facilities located in over 45 countries; produces containerboard and corrugated products; and sells timber. June 1st the company raised its quarterly dividend to $0.42/share. The dividend is payable on July 1 to shareholders of record on June 18. The ex-dividend date is June 16. The yield based on the new payout is 3.03%.
DuPont Fabros Tech (DFT) develops, operates and manages wholesale data centers used by technology concerns to power the computer servers that support their critical business processes. June 3rd the company increased its quarterly dividend 50% to $0.12/share. The dividend is payable on July 9, 2010 to shareholders of record as of June 29, 2010. The ex-dividend date is June 25, 2010. The yield based on the new payout is 1.91%.
Rockwell Automation (ROK) primarily manufactures automated industrial equipment and power generators (formerly Rockwell International). June 3rd the company raised its quarterly dividend 21% to $0.35/share. The dividend is payable on Sept. 10, 2010 to shareowners of record at the close of business on Aug. 16, 2010. The yield based on the new payout is 2.56%.
Selecting stocks with increasing dividends is critical for an income growth strategy. The above list contains stocks that recently raised their dividends, it is not a list of recommend buys. As always, due diligence should be performed before buying or selling any stock. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.