Dividends Value » commentary

15 Dividend Stocks With A 15% Yield In 15 Years *

D4L — Wed, 13 Apr 2011 07:30:02 +0000

“I skate to where the puck is going to be, not where it has been.”
- Wayne Gretzky

I know very little about hockey, but I have always loved this quote. It can be applied to so many things in life, including investing. Just as Gretzky has a vision as to where the puck is going, investors need to have a similar vision, and not get caught up on short-sighted distractions. Investing in dividend growth stocks requires a long-term vision. It is easy to run a screen and find stocks that are paying a 15% yield today; but how long will they be able to sustain it? Instead you may want to skate to where the future 15% yielders are going to be. To do that, here are some things you need to know…

Tracking Yield On Cost

Yield-on-cost (YOC) is simply Current Annual Dividend dividend by Original Cost Per Share. YOC not a substitute for calculating an internal rate of return (IRR). The IRR calculation takes into account both capital appreciation and the timing of cash flows (purchases, sells and dividends). However, as a dividend growth investor, my primary focus is on dividend growth and since my desired holding period is forever, capital appreciation is little more than an interesting side note. YOC is much better suited for tracking dividend growth since it is individually tied to a stock and takes into account all the variations of growth rates over time, along with the timing of purchases. Also, it is useful when trying to explain to our income investor brethren why we chose the stock yielding 3% over ‘Amalgamated Risk’ at 8%.

My D4L-Data model includes projections of YOC after 5, 10, 15 and 20 years. These projections are derived by growing the current yield using the dividend growth rate. As for the dividend growth rate, I use the minimum of the 1, 3, 5, 7 or 10 year compound annual growth rates; or 15% if in every consecutive 4-year period dividends grew on average in excess of 15%.

15 Dividend Stocks With A 15% Yield In 15 Years

Sorting the stocks in my D4L-Data model by their 15 Year YOC and throwing out some bad apples, we are left with these 15 stocks that are projected to have a 15% YOC in 15 years:

T. Rowe Price Group Inc. (TROW) operates one of the largest no-load mutual fund complexes in the United States.
Yield: 1.8% | Growth: 15.0% | 15 Year YOC: 15.0%

Cardinal Health Inc. (CAH) is one of the leading wholesale distributors of pharmaceuticals, medical/surgical supplies and related products to a broad range of health care customers.
Yield: 1.8% | Growth: 15.0% | 15 Year YOC: 15.0%

Owens & Minor Inc. (OMI) is a leading domestic distributor of medical and surgical supplies to the acute care market, a health care supply chain management company, and a direct-to-consumer (DTC) supplier of testing and monitoring supplies for diabetes.
Yield: 2.4% | Growth: 13.2% | 15 Year YOC: 15.6%

Praxair Inc. (PX) is the largest producer of industrial gases in North and South America, and the second largest worldwide. It also provides ceramic and metallic coatings.
Yield: 2.0% | Growth: 15.0% | 15 Year YOC: 15.9%

Aflac Incorporated (AFL) provides supplemental health and life insurance in the U.S. and Japan. Products are marketed at worksites and help fill gaps in primary insurance coverage. Approximately 80% of earnings comes from Japan and 20% from the U.S.
Yield: 2.3% | Growth: 15.0% | 15 Year YOC: 18.2%

Stryker Corp. (SYK) makes specialty surgical and medical products such as orthopedic implants, endoscopic items, and hospital beds.
Yield: 1.2% | Growth: 20.0% | 15 Year YOC: 18.6%

Casey’s General Stores Inc. (CASY) has over 1,500 convenience stores in the Midwest, selling food, beverage, health and automotive products.
Yield: 1.3% | Growth: 19.8% | 15 Year YOC: 19.4%

Weyco Group, Inc. (WEYS) distributes, wholesale & retail, men’s branded footwear in the U.S., Canada, Europe; it offers casual footwear, dress shoes and accessories under Florsheim, other brands.
Yield: 2.6% | Growth: 15.0% | 15 Year YOC: 21.0%

Walgreen Co. (WAG) is the largest U.S. retail drug chain in terms of revenues, this company operates more than 8,000 drug stores throughout the U.S. and Puerto Rico.
Yield: 1.7% | Growth: 18.5% | 15 Year YOC: 21.7%

Nucor Corporation (NUE) is the largest minimill steelmaker in the U.S., Nucor has one of the most diverse product lines of any steelmaker in the Americas.
Yield: 3.1% | Growth: 15.0% | 15 Year YOC: 25.5%

McDonald’s Corporation (MCD) is the largest fast-food restaurant company in the world, with about 32,500 restaurants in 117 countries.
Yield: 3.2% | Growth: 15.0% | 15 Year YOC: 26.1%

ConocoPhillips Co. (COP) is the fourth largest integrated oil company in the world, and the second largest in the U.S.
Yield: 3.3% | Growth: 15.0% | 15 Year YOC: 26.6%

People’s United Financial Inc. (PBCT) provides a full range of banking and financial service products to individuals, corporations and municipal customers in the U.S. Northeast.
Yield: 6.0% | Growth: 11.3% | 15 Year YOC: 30.0%

Southside Bancshares Inc. (SBSI) primarily provides financial services to individuals, businesses, municipal entities, and non-profit organizations.
Yield: 3.7% | Growth: 16.6% | 15 Year YOC: 36.9%

Old Republic Intl (ORI) writes property and liability, mortgage guaranty, title and life, and disability insurance.
Yield: 5.4% | Growth: 15.0% | 15 Year YOC: 43.6%

One key component of current yield is risk. If Treasuries (risk free) were paying 7%, 8% or 9%, many income investors and a significant number of dividend growth investors would divert a portion of their portfolios to them.

You will note that most of the above stocks are yielding under 4%. It is also important to note that I do not believe that all the above stocks will achieve their 15 year YOC. In much the same way high-yielding stocks often end up cutting their dividends, many of the above stocks will end up cutting their dividend growth rate. Put another way, there is risk associated low-yield high-dividend-growth stocks. However, for the high dividend growth stocks that perform well over the next 15 years, the rewards are potentially much higher than those of a high-yield, low growth stock.

Full Disclosure: Long OMI, NUE, MCD, COP. See a list of all my income holdings here.

(Photo Credit)

6 Dividend Stocks Building Shareholder Returns *

D4L — Fri, 08 Apr 2011 07:30:15 +0000

Numerous research projects have shown, a conservative dividend growth based investment strategy has consistently outperformed the market over time. My goal as a dividend growth investor is to build a steadily increasing income and not necessarily to outperform the market via capital gains. But given the choice, I certainty don’t mind having both.

Below are several dividend stocks building shareholder returns with higher cash dividends:

Tanger Factory Outlet Centers, Inc. (SKT) is a publicly-traded REIT headquartered in Greensboro, North Carolina that operates and owns, or has ownership interests in, a portfolio of 34 upscale outlet shopping centers in 22 states. April 7th the company increased its quarterly dividend 3.2% to $0.20/share. The dividend is payable on May 13, 2011 to shareholders of record on April 29, 2011. The yield based on the new payout is 3.2%.

PNC Financial Services Group, Inc. (PNC) is one of the nation’s largest diversified financial services organizations providing retail and business banking. April 7th the company increased its quarterly dividend 250% to $0.35/share. The dividend is payable May 5, 2011 to shareholders of record at the close of business on April 18, 2011. The yield based on the new payout is 2.2%.

Richardson Electronics, Ltd. (RELL) is a global provider of engineered solutions, a global distributor of electronic components to the electron device markets, and a global provider of display solutions to the display systems markets. April 6th the company increased its quarterly dividend 150% to $0.05/share. The dividend will be payable on May 20, 2011, to all common stockholders of record on May 6, 2011. The yield based on the new payout is 1.5%.

The TJX Companies, Inc. (TJX) is a leading off-price retailer of apparel and home fashions in the U.S. and worldwide. April 5th the company increased its quarterly dividend 27% to $0.19/share. The dividend is payable June 2, 2011, to shareholders of record on May 12, 2011. Carol Meyrowitz, Chief Executive Officer of The TJX Companies, Inc. stated, “I am pleased to report that our Board of Directors has approved this 27% increase in our quarterly dividend, which reflects our confidence in the business and marks our 15th consecutive year of dividend increases.” The yield based on the new payout is 1.5%.

Government Properties Income Trust (GOV) is a real estate investment trust, or REIT, which owns properties leased primarily to the U.S. Government and state governments located throughout the United States. GOV is headquartered in Newton, MA. April 5th the company increased its quarterly dividend 2.4% to $0.42/share ($1.68 per share per year). This distribution will be paid to GOV’s common shareholders of record as of the close of trading on April 26, 2011 and distributed on or about May 24, 2011. The yield based on the new payout is 6.2%.

Bank of the Ozarks, Inc. (OZRK) owns a state-chartered subsidiary bank that conducts banking operations through 94 offices in Arkansas, Texas, Georgia, Florida, South Carolina, North Carolina, and Alabama. April 1st the company increased its quarterly dividend 5.9% to $0.18/share. The dividend is payable April 22, 2011 to shareholders of record as of April 15, 2011. The Company has increased its quarterly dividend in five of the last six quarters. The yield based on the new payout is 1.6%.

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: Long KO, GPC, KMB, PNY, WMT. See a list of all my income holdings here.

(Photo Credit)

10 Dividend Stocks With With A 10%+ Dividend Growth Rate *

D4L — Wed, 06 Apr 2011 07:30:13 +0000

The difference between an income investor and a dividend growth investor is time and the understanding of how compound growth works. If you are 67 years old and need income today, you will likely select a different group of stocks than an enlightened 27 year old that doesn’t necessarily need the income today. The 27 year old has the the luxury of time to grow a superior yield, while the 67 year old may be forced to assume additional risk to buy a higher current yield. Here are some of the reasons an investor might forgo current yield in hopes of future gain…

Dividend Growth Provides For Inflation

Inflation is the silent killer for many retirement portfolios. Over time, prices tend to increase. If you rely solely on a portfolio of long-term fixed income securities, you will lose purchasing power each year as inflation robs your portfolio. Dividend growth rates on traditional high-yield stocks (e.g. utilities, REITs, etc.) are often less than inflation. However, most blue-chip dividend growth stocks grow their dividends well in excess of the annual inflation rate.

Dividend Growth Often Provides For Higher Value

The combination of a good starting yield and respectable dividend growth will often provide the investor with greater long-term value when compared to alternatives with higher current yields and lower growth dividend rates. The only way to know for sure is to run the numbers using a model such as my D4L-PreScreen.xls.

Compound Dividend Growth Is Powerful

Compound interest is what occurs when interest previously earned is added to the principle and is considered when calculating future interest – i.e. earning interest on interest. Compound dividends are like compound interest on steroids. Like compound interest, dividends are being reinvested. However, these dividends are growing which provides and added boost.

Conservative View Of Dividend Growth

The dividend growth rate is a key metric in many calculations. As such, I use a conservative estimate as follows: The minimum dividend growth rate of the 1, 3, 5, 7, 10 year compound annual growth rate or 15%, if dividends grew on average in excess of 15% for each consecutive 4 year periods, within the last 10 years of history.

10 Stocks With a 10%+ Dividend Growth Rate

General Dynamics Corp. (GD) | Yield: 2.5% | Growth: 10.1%
General Dynamics is the world’s fifth largest military contractor and also one of the world’s biggest makers of corporate jets. GD is a member of the S&P 500 a member of the Broad Dividend Achievers™ Index. The company has paid a cash dividend to shareholders every year since 1979 and has increased its dividend payments for 19 consecutive years.

Hormel Foods Corp. (HRL) | Yield: 1.9% | Growth: 10.6%
Hormel Foods Corp. company is a leading processor of branded, convenience meat products (primarily pork) for the consumer market. HRL is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1928 and has increased its dividend payments for 45 consecutive years.

Wal-Mart Stores Inc. (WMT) | Yield: 2.8% | Growth: 11.0%
Wal-Mart Stores, Inc. is the largest retailer in North America, WMT operates a chain of discount department stores, wholesale clubs, and combination discount stores and supermarkets. WMT is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 36 consecutive years.

Colgate-Palmolive Co. (CL) | Yield: 2.9% | Growth: 12.5%
Colgate-Palmolive Company (Colgate) is a major consumer products company that markets oral, personal and household care, and pet nutrition products in more than 200 countries and territories. CL is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1895 and has increased its dividend payments for 47 consecutive years.

Owens & Minor Inc. (OMI) | Yield: 2.6% | Growth: 13.2%
Owens & Minor Inc. is a leading domestic distributor of medical and surgical supplies to the acute care market, a health care supply chain management company, and a direct-to-consumer (DTC) supplier of testing and monitoring supplies for diabetes. OMI is a member of the Broad Dividend Achievers™ Index. The company has paid a cash dividend to shareholders every year since 1926 and has increased its dividend payments for 13 consecutive years.

ConocoPhillips (COP) | Yield: 3.3% | Growth: 13.2%
ConocoPhillips Co. is the fourth largest integrated oil company in the world. COP is a member of the S&P 500 a member of the Broad Dividend Achievers™ Index. The company has paid a cash dividend to shareholders every year since 1934 and has increased its dividend payments for 10 consecutive years.

Target Corp. (TGT) | Yield: 2.0% | Growth: 15.5%
Target Corp. operates about 1,500 Target and 250 SuperTarget general merchandise stores across the U.S. TGT is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1965 and has increased its dividend payments for 43 consecutive years.

Southside Bancshares Inc. (SBSI) | Yield: 3.2% | Growth: 16.6%
Southside Bancshares Inc. primarily provides financial services to individuals, businesses, municipal entities, and non-profit organizations. SBSI is a member of the Broad Dividend Achievers™ Index. The company has paid a cash dividend to shareholders every year since 1969 and has increased its dividend payments for 12 consecutive years.

Walgreen Co. (WAG) | Yield: 1.7% | Growth: 18.5%
Walgreen Co is the largest U.S. retail drug chain in terms of revenues, this company operates more than 8,000 drug stores throughout the U.S. and Puerto Rico. WAG is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1933 and has increased its dividend payments for 36 consecutive years.

Casey’s General Stores Inc. (CASY) | Yield: 1.4% | Growth: 19.8%
Casey’s General Stores Inc. has over 1,500 convenience stores in the Midwest, selling food, beverage, health and automotive products. CASY is a member of the Broad Dividend Achievers™ Index. The company has paid a cash dividend to shareholders every year since 1990 and has increased its dividend payments for 10 consecutive years.

Conclusion

If time is on your side, you should investigate if certain lower yielding stocks with a dividend growth rate fits into your long-term investment strategy. When making this evaluation, it is important to note that the sustainability of the dividend growth rate must be evaluated on a go-forward basis. Like high-yield stocks, there is increasing risk as the dividend growth rises.

Full Disclosure: Long GD, WMT, CL, OMI, COP. See a list of all my income holdings here.

(Photo Credit)

1 Company Announced A Higher Dividend, 7 To Pay Higher Dividends in April *

D4L — Fri, 01 Apr 2011 07:30:11 +0000

A stock with a high yield doesn’t mean much if the dividend is cut or eliminated, and the stock price declines significantly. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the additional risk. One measure of dividend sustainability is the ability of management to consistently raise their dividends each year.

This week only one company announced raised the dividend growth bar one year by increasing its cash dividends paid:

International Paper (IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. March 29th the company increased its quarterly dividend 40% to $0.2625/share. The dividend is payable on June 15, 2011 to shareholders of record on May 17, 2011. The yield based on the new payout is 3.6%.

The following companies will pay higher dividends in April:

Chubb Corporation (CB) as one of the largest U.S. property-casualty insurers, Chubb has carved out a number of niches, including high-end personal lines and specialty liability lines coverage. April 5th the company will pay its quarterly dividend of $0.39/share. This dividend is 5.4% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1902 and has increased its dividend payments for 47 consecutive years. The yield based on the new payout is 2.6%.

The Coca-Cola Company (KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. April 1st the company will pay its quarterly dividend of $0.47/share. This dividend is 7% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1893 and has increased its dividend payments for 49 consecutive years. The yield based on the new payout is 3.0%.

Family Dollar Stores Inc. (FDO) operates a chain of over 6,800 retail discount stores in 44 states across the U.S. April 15th the company will pay its quarterly dividend of $0.18/share. This dividend is 16% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1976 and has increased its dividend payments for 35 consecutive years. The yield based on the new payout is 1.4%.

Genuine Parts Co. (GPC) is a distributor of automotive replacement parts in the U.S., Canada and Mexico. April 1st the company will pay its quarterly dividend of $0.45/share. This dividend is 10% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1948 and has increased its dividend payments for 55 consecutive years. The yield based on the new payout is 3.4%.

Kimberly Clark Corp. (KMB) is a global consumer products company that produces tissue, personal care and health care. Its brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark. April 4th the company will pay its quarterly dividend of $0.70/share. This dividend is 17% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1935 and has increased its dividend payments for 38 consecutive years. The yield based on the new payout is 4.3%.

Piedmont Natural Gas (PNY) is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee. April 15th the company will pay its quarterly dividend of $0.29/share. This dividend is 3.6% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1956 and has increased its dividend payments for 33 consecutive years. The yield based on the new payout is 3.9%.

Wal-Mart Stores, Inc. (WMT) serves customers and members more than 200 million times per week at 8,970 retail units under 60 different banners in 15 countries. April 5th the company will pay its quarterly dividend of $0.3650/share. This dividend is 21% higher than the previous quarter. The company has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 36 consecutive years. The yield based on the new payout is 2.8%.

Full Disclosure: Long KO, GPC, KMB, PNY, WMT. See a list of all my income holdings here.

(Photo Credit)

Why Dividend Stocks Are Evil *

D4L — Wed, 30 Mar 2011 07:30:15 +0000

I can’t carry on anymore. The secret has become too much of a burden and it must be shared with the masses. This will shock some and enrage others, but it must be said, and I should be the one to say it. Dividend stocks are evil and they will eventually lead to the collapse of western civilization as we know it. There, I said it and here is why I believe it…

Dividend Stocks Empowers People

By starting early in life and building a portfolio of dividend growth stocks, people are empowering themselves and taking charge of their future. At first blush, this may not sound like a bad thing but consider the consequences. Lord Acton saw the problem more than a century ago when he stated “All power tends to corrupt; absolute power corrupts absolutely.” Power is meant for the government, not people. The government has a much more experience with corruption than individuals.

Dividend Stocks Weakens The Need For Government

Power is like mass, it can not be created or destroyed. Any gains in power in one area must be offset by a loss in another. When people make wise financial decisions and are empowered with a secure and independent future, this power must come from somewhere, and in this case it is to the detriment of our beloved government. The foundation of our modern government is a needy society beholden to its benevolent hand. If the masses aren’t relying on the government to sustain their meager existence in retirement, how can we continue to justify our current behemoth governmental infrastructure and expenditures. And even worse, a shift of power to the people could go to their heads and eventually lead to them demanding accountability from their elected officials. This is sacrilege!

Dividend Stocks Will Destroy The World Economy

If individuals start making wise financial decisions and investing in dividend stocks instead of buying “stuff” produced around the world. The world economy could collapse. Imagine what would happen if we stopped buying plastic stuff made in China – their government would not be able to fund all their military endeavors. This would leave them open to another student up rising in Tiananmen Square, and this time the government may not be able to silence the people.

7 Dividend Stocks To Bring Down Financial System

The financial system does not like radical change. Responsible behavior and fewer imports could lead to lead to smaller government and less debt. Less debt would keep interest rates low as buyers bid up the price of the remaining debt. Perpetually low interest rates would stimulate the economy and cause stress on the financial institutions as they tried in vain to keep up with a robust economy.

You’ve been warned. You will set in motion a cataclysmic chain of events if act responsibly and buy good dividend stocks such as these:

Abbott Laboratories (ABT) | Yield: 4.0%
Abbott Laboratories is a diversified life science company and is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics.

Cincinnati Financial Corp. (CINF) | Yield: 4.9%
Cincinnati Financial Corp. markets primarily property and casualty coverage. It also conducts life insurance and asset management operations.

Colgate-Palmolive Co. (CL) | Yield: 3.0%
Colgate-Palmolive Company (Colgate) is a major consumer products company that markets oral, personal and household care, and pet nutrition products in more than 200 countries and territories.

ConocoPhillips (COP) | Yield: 3.5%
ConocoPhillips Co. is the fourth largest integrated oil company in the world, and the second largest in the U.S.

Kimberly-Clark Corporation (KMB) | Yield: 4.3%
Kimberly Clark Corp. is a global consumer products company that produces tissue, personal care and health care. Its brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark.

Pepsico, Inc. (PEP) | Yield: 3.0%
PepsiCo, Inc. is a major international producer of branded beverage and snack food products.

AT&T, Inc. (T) | Yield: 6.1%
AT&T Inc. provides telephone and broadband service and holds full ownership of AT&T Mobility (formerly Cingular Wireless). AT&T Corp. was acquired in late 2005 and BellSouth in late 2006.

Now that the secret is out, what are you going to do? Will you continue to buy these evil stocks and build an independently secure future and allow our government and world economy to fail? As for me, I plan on spending the next couple of days digging my tongue out of my cheek and preparing for Friday’s holiday!

Full Disclosure: Long ABT, CINF, CL, COP, KMB, PEP, T. See a list of all my income holdings here.

(Photo Credit)

13 Stocks Using Real Cash To Pay Higher Dividends *

D4L — Fri, 25 Mar 2011 07:30:03 +0000

We have all heard it… Stodgy, for old people, yawn, boring! These have all been used to describe dividend growth investing. As a dividend growth investor, I sometimes think our strategy is the most misunderstood. It seems everyone understands a traders mentality and a high-yield mentality. Periodically, it is good to remind ourselves that dividend growth provides us with excellent long-term leverage.

Below are several stocks using real cash to raise their dividends:

Raytheon Company’s (RTN) is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. March 24th the company increased its quarterly dividend 15% $0.43/share. The dividend is payable on April 28, 2011 to shareholders of record as of the close of business on April 6, 2011. The yield based on the new payout is 3.4%.

Steelcase Inc. (SCS) engages in the manufacture and sale of furniture systems and seating products. March 24th the company increased its quarterly dividend 50% to $0.06/share. The dividend is payable on or before April 13, 2011 to shareholders of record as of April 1, 2011. The yield based on the new payout is 2.3%.

Fifth Third Bancorp (FITB) is a diversified financial services company headquartered in Cincinnati, Ohio. March 22nd the company increased its quarterly dividend 500% to $0.06/share. The dividend is payable on Thursday, April 21, 2011 to shareholders of record as of Friday, April 1, 2011. The yield based on the new payout is 1.7%.

BNY Mellon (BK) is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. March 22nd the company increased its quarterly dividend 44% to $0.13/share. The dividend is payable on May 10, 2011, to holders of record as of the close of business on April 29, 2011. The yield based on the new payout is 1.8%.

Medicis (MRX) is the leading independent specialty pharmaceutical company in the United States focusing primarily on the treatment of dermatological and aesthetic conditions. March 22nd the company increased its quarterly dividend 33% to $0.08/share. The dividend ispayable on April 29, 2011, to stockholders of record at the close of business on April 1, 2011. The yield based on the new payout is 1.1%.

Innophos Holdings, Inc. (IPHS) is a leading North American producer of specialty phosphate products, offering performance-critical ingredients with applications in food, beverage, pharmaceutical, oral care and industrial end markets. March 21st the company increased its quarterly dividend 47% to $0.25/share. The dividend is payable on April 29, 2011 to holders of record on April 15, 2011. The yield based on the new payout is 1.1%.

American Greetings Corporation (AM) is a a creator and manufacturer of innovative social expression products that assist consumers in enhancing their relationships. March 21st the company increased its quarterly dividend 7% to $0.15/share. The quarterly dividend will be paid on April 21, 2011 to shareholders of record at the close of business on April 11, 2011. The yield based on the new payout is 2.7%.

Raven Industries, Inc. (RAVN) serves the precision agriculture, high performance specialty films, aerospace, and electronic manufacturing services markets. March 21st the company increased its quarterly dividend 12.5% to $0.18/share. The dividend is payable April 15, 2011 to shareholders of record on March 31, 2011. This is the company’s 25th consecutive annual cash dividend increase. The yield based on the new payout is 1.2%.

State Street Corporation (STT) is one of the world’s leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. March 18th the company increased its quarterly dividend 1700% to $0.18/share. The dividend is payable April 15, 2011, to stockholders of record as of April 1, 2011. The yield based on the new payout is 1.7%.

U.S. Bancorp (USB) is a financial bank holding company that provides various banking and financial services in the United States. March 18th the company increased its quarterly dividend 150% to $0.125/share. The dividend is payable on April 15, 2011, to shareholders of record at the close of business on March 31, 2011. The yield based on the new payout is 1.9%.

JPMorgan Chase & Co. (JPM) is a leading global financial services firm with assets of $2.1 trillion and operations in more than 60 countries. March 18th the company increased its quarterly dividend 400% to $0.25/share. The dividend is payable on April 30, 2011 to stockholders of record at the close of business on April 6, 2011. The yield based on the new payout is 2.2%.

BB&T Corporation (BBT) is one of the largest financial services holding companies in the U.S. with approximately $157.1 billion in assets and market capitalization of $18.3 billion, as of Dec. 31, 2010. March 18th the company increased its quarterly dividend 6.7% to $0.16/share plus a $0.01/share special dividend per common share. The dividends are payable May 2, 2011, to shareholders of record as of April 8, 2011. BB&T has one of the strongest dividend payouts in the country for banks and has paid a cash dividend to shareholders every year since 1903. The yield based on the new payout is 2.4%.

Cisco (CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. March 18th the company announced it first cash dividend of $0.06/share paid to shareholders in the company’s history. The dividend is payable on April 20, 2011, to all shareholders of record as of the close of business on March 31, 2011. The yield based on the new payout is 1.4%.

Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.

(Photo Credit)

Don’t Touch These 5 Dividend Stocks! *

D4L — Wed, 23 Mar 2011 07:30:23 +0000

Has someone near and dear to you responded with a ‘I was only trying to help’ after royally messing something up? Have you ever tinkered with a computer, smart phone or something else only to learn it no longer works and you are not sure how to fix it? Our dividend stock investments can suffer the same fate if we provide them with too much of the wrong type of attention. Here are some things to remember to keep your income investments on the straight and narrow…

Avoid Irrelevant Information

I tire of hearing the stock reports that sound like a horse race, ‘After early mixed results, the Dow edged up two points today despite a government report indicating unemployment is running at two-tenths of a percent above previous estimates…’ Will any of this have meaning in 10 years? 5 years? 1 year? In a month or a week? If you tune in to the same program tomorrow, you will likely hear an equally irrelevant, and possibly contrary, rant. Successful investing is a marathon, not a 40 yard dash.

Avoid Excess Trading

The investment community is geared toward trading. The media with their incessant play-by-play call of the market creates a sense of urgency. If the market is going up, you are made to feel like you are missing out on enormous gains, while market declines leave the investor feeling the need to sell before losing it all. The common thread here is the investor is being pushed to trade. Excessive buying and selling will at best mute a portfolio’s return and at worse, will deplete it.

Buy And Hold

Its ironic that buy-and-hold (through dividend and value investing) is seeing a resurgence, while concurrently being attacked on many fronts as being dead and no longer valid. Some attacks are a result of ignorance on the part of those not fully understanding the concept. Buy-and-hold is not buy-and-forget. All investment strategies should have a well-defined exit plan. Making a quick buck is not part of the exit strategy of long-term buy-and-hold dividend and value investors. Instead, it is our desire to hold the stock forever, assuming the stock continues to meet out investing criteria. When the stock no longer performs as anticipated, such as cutting its dividend, it is immediately sold.

Dividend Stocks Worth Waiting On

If our investment horizon is forever, we must do our due diligence up front and select only the very best stocks. Below are several stocks that have earned the patience of many dividend growth investors:

Johnson & Johnson (JNJ) | Yield: 3.7%
Johnson & Johnson is a leader in the pharmaceutical, medical device and consumer products industries. JNJ is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1944 and has increased its dividend payments for 49 consecutive years.

McDonald’s Corp. (MCD) | Yield: 3.2%
McDonald’s Corporation is the largest fast-food restaurant company in the world, with about 32,500 restaurants in 117 countries. MCD is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1976 and has increased its dividend payments for 35 consecutive years.

The Coca-Cola Company (KO) | Yield: 2.9%
The Coca-Cola Company is the world’s largest soft drink company, KO also has a sizable fruit juice business. KO is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1893 and has increased its dividend payments for 48 consecutive years.

Procter & Gamble Co. (PG) | Yield: 3.1%
The Procter & Gamble Company is a leading consumer products company that markets household and personal care products in more than 180 countries. PG is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1891 and has increased its dividend payments for 54 consecutive years.

Wal-Mart Stores Inc. (WMT) | Yield: 2.8%
Wal-Mart Stores, Inc. is the largest retailer in North America, WMT operates a chain of discount department stores, wholesale clubs, and combination discount stores and supermarkets. WMT is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 36 consecutive years.

Conclusion

We live in an action-oriented world. In a microwave society that provides us instant everything, we look for immediate feedback for our actions. Sometimes it is hard to abide by the old adage ‘if it’s not broke, don’t fix it’, but when it comes to our dividend growth investments, we need to allow time to work its wonders on our portfolio.

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

(Photo Credit)

12 Confident and Secure Companies Boosting Dividends *

D4L — Fri, 18 Mar 2011 07:30:47 +0000

If income investing were as simple as picking the stock with the highest yield, everyone would be an expert. Most assume (rightfully so) that yield is heavily influenced by risk, but much more goes into determining yield. The industry the company operates in, legal considerations (REITs and MLPs), maturity and growth potential all have an effect on an individual stock’s yield, along with the company’s ability to grow its dividend.

Below are several companies confident and secure enough in their business to increase their cash dividends:

Air Products (APD) serves customers in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services. March 17th the company increased its quarterly dividend 18% to $0.58/share. The dividend is payable on May 9, 2011 to shareholders of record at the close of business on April 1, 2011. This marks the 29th consecutive year that Air Products has increased its dividend payment. The yield based on the new payout is 2.7%.

Independent Bank Corp. (INDB) is a full-service community bank serving southeastern Massachusetts, Cape Cod, and Rhode Island. March 17th the company increased its quarterly dividend 6% to $0.19/share dividend which is payable on April 8, 2011, to stockholders of record as of the close of business on March 28, 2011. The yield based on the new payout is 3.0%.

Washington Trust Bancorp, Inc., (WASH) offers a full range of financial services, including commercial banking, small business banking, personal banking, and wealth management and trust services. March 17th the company increased its quarterly dividend 4.8% to $0.22/share. The dividend will be paid on April 14, 2011 to shareholders of record on March 31, 2011. The yield based on the new payout is 4.0%.

Patterson Companies, Inc. (PDCO) is a value-added distributor serving the dental, companion-pet veterinarian and rehabilitation supply markets. March 16th the company increased its quarterly dividend 20% to $0.12/share. The dividend is payable on April 28, 2011 to shareholders of record at the close of business on April 11, 2011. The yield based on the new payout is 1.5%.

Ashland Inc. (ASH) operates as a specialty chemicals company in the United States and internationally. March 16th the company announced its intentions to increase its dividend 16.6% to $0.70/share from its current annual rate of $0.60/share, commencing with the June 15 dividend payment. The yield based on the new payout is 1.2%.

Realty Income Corporation (O) is a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. March 15th the company increased its monthly dividend to $0.1445625/share. The dividend is payable on April 15, 2011 to shareholders of record as of April 1, 2011. This is the 54th consecutive quarterly increase and the 61st dividend increase since Realty Income went public in 1994. The Company continues its long-term policy of declaring and paying dividends on a monthly, rather than on a quarterly, basis. The yield based on the new payout is 5.0%.

Williams-Sonoma, Inc. (WSM) is a nationwide specialty retailer of high quality products for the home. March 15th the company increased its quarterly dividend 13% to to $0.17/share. The dividend is payable on May 24, 2011 to shareholders of record as of the close of business on April 27, 2011. The yield based on the new payout is 1.7%.

BioMed Realty Trust, Inc. (BMR) is a real estate investment trust (REIT) focused on Providing Real Estate to the Life Science Industry®. March 14th the company increased its quarterly dividend 17.6% to $0.20/share. The dividend is equivalent to an annualized dividend of $0.80 per common share. The yield based on the new payout is 4.6%.

Xilinx, Inc. (XLNX) is the world’s leading provider of programmable platforms. March 14th the company increased its quarterly dividend 18.8% to $0.19/share. The dividend is payable on June 8, 2011 to all stockholders of record at the close of business on May 18, 2011. “The increase in our quarterly dividend reflects our strong and consistent operating cash flow as well as our commitment to returning shareholder value,” said Moshe Gavrielov, Xilinx President and Chief Executive Officer. The yield based on the new payout is 2.4%.

Lennox International Inc. (LII) is a global leader in the heating, ventilation, air conditioning, and refrigeration markets. March 11th the company increased its quarterly dividend 20% to $0.18/share. The dividend is payable on April 15, 2011 to stockholders of record as of March 25, 2011. The yield based on the new payout is 1.4%.

Steel Dynamics, Inc. (STLD) manufactures and sells steel products in the United States. March 10th the company increased its quarterly dividend 33% to $0.10/share.The dividend is payable on or about April 14, 2011, to shareholders of record at the close of business on March 31, 2011. The yield based on the new payout is 2.1%.

Hudson Pacific Properties, Inc. (HPP) is a full-service, vertically integrated real estate company focused on owning, operating and acquiring high-quality office properties primarily in Northern and Southern California. March 10th the company increased its quarterly dividend 31.6% to $0.125/share. The dividend is payable on March 31, 2011 to stockholders of record on March 21, 2011. The yield based on the new payout is 3.5%.

Full Disclosure: Long O. See a list of all my income holdings here.

(Photo Credit)

3 Dividend Stocks That I Will NEVER Lose Money On *

D4L — Wed, 16 Mar 2011 07:30:20 +0000

Wouldn’t it be nice to buy stocks that only had upside. While we are wishing why don’t we add in predictable earnings, predictable dividends and, of coarse, we don’t want to pay a premium for this investment. Does this sound unrealistic? Possibly, at face value, but there is a way to accomplish this. It won’t happen overnight, but it can be done. Here is how I have been able to do it…

Start With Quality Stocks

Just as ‘better ingredients make a better pizza’, higher quality stocks provide more predictable dividends and an increased chance of becoming one of these Golden Stocks. As with any income investment, I look for stocks that have consistently increased their dividends for many consecutive years and operate in businesses that do well over all parts of the economic cycle.

Add In A Generous Portion Of Time

This is not an overnight process. Most good things are worth waiting for. If you are to establish a long-term relationship with a stock, it better be a quality stock. Time is a powerful force, with it we can overcome poor choices, poor timing and bad decisions. Without it, we immediately are forced to pay for our indiscretions.

Strategic Selection Of Entry And Exit Points

Just typing the above made the hair on the back of my neck stand up — It sounds too much like market timing, for which I have no use for. However, all successful strategies have an element in them that encourages investors to buy low and sell high. Consider how asset allocation works. When one sector experiences a decline, the investor will buy that sector to keep his or her allocation in balance. Later when it rises, the investor may be forced to sell to rebalance their allocation. In much the same way, I tend to smile a lot when the market is crashing-and-burning. It is at these times when truly great stocks are being traded and rock-bottom prices. As we will see, these purchases are more quickly turned into Golden Stocks.

Three Golden Stocks

So what exactly is a Golden Stock? The concept did not originate with me, and others have different names for it, including ‘zero-basis stock.’ I don’t care for that name since, in reality it is nearly impossible to hold a stock with zero basis (at least the way the IRS calculates basis). A Golden Stock is one in which I have fully recovered my entire investment either through dividends or from partial liquidation or a combination of both. In my income portfolio, I am currently holding these 3 Golden Stocks:

3M Company (MMM) | YOC: 4.4% | Yield: 2.3%
This stock was originally purchased in March 2009 when the market was at its low. In October 2010, I sold 50% of my shares. Proceeds from that sale, along with dividends received, account for 101.1% of my original investment.

Emerson Electric Co. (EMR) | YOC: 3.5% | Yield: 2.3%
My EMR holdings were purchased in July 2009 and October 2009. The July purchase was at $31.64 while the October purchase was at $39.59. In February 2011, I sold 55% of my shares. Proceeds from that sale, along with dividends received, account for 100.4% of my original investment.

Integrys Energy Group, Inc. (TEG) | YOC: 7.3% | Yield: 5.4%
TEG is different from the first two stocks in that its quarterly dividend has been frozen at $0.62/share since March 2009. I purchased one block in November 2008 at $43.81 and a second block in February 2009 at $36.83. In March 2011, I sold 67% of my shares. Proceeds from that sale, along with dividends received, account for 102.7% of my original investment.

More Golden Stocks On The Way

In addition to the above, several of my other income holdings are well on their way to becoming Golden Stocks. These include:

The Coca-Cola Company (KO) | YOC: 3.8% | Yield: 2.7%
This stock is in most every dividend growth investors portfolio. I have currently recovered through sales and dividends 21.2% of my initial investment.

Realty Income Corp. (O) | YOC: 6.9% | Yield: 5.0%
This stock is hold-over from my yield chasing days. When I started investing the right way, I held on to a handful of the better high-yield dividend stocks. I have currently recovered through sales and dividends 26.8% of my initial investment.

Consolidated Edison, Inc. (ED) | YOC: 5.5% | Yield: 4.7%
I have held a position in this stock since January 2005. Though its dividend increases have been rather modest, they have been consistent. I have currently recovered through sales and dividends 43.8% of my initial investment.

Commercial Net Lease Realty, Inc. (NNN) | YOC: 7.9% | Yield: 5.9%
This stock is another hold-over from my yield chasing days. In May 2009, I sold 51% of my shares after NNN failed to raise its dividend. However, it later raised its dividend in August 2010 to keep its streak of annual dividend increases alive. I have currently recovered through sales and dividends 68.6% of my initial investment.

Health Care Property Investors Inc. (HCP) | YOC: 6.0% | Yield: 5.0%
Yet another hold-over from my yield chasing days. I have held a position in this stock since March 2005. On paper, I should have sold this stock a long time ago, but it has continued to appreciate and to raise its dividend. It will likely be my next Golden Stock. I have currently recovered through sales and dividends 81.2% of my initial investment.

Conclusion

Needless to say, the statement that I will NEVER lose money on my 3 Golden Stocks is predicated on not purchasing any additional shares, which may or may not be the case. These stocks have already paid for themselves once, and given the right circumstances, I would be willing to let them do it again. Dividend growth stocks are truly stocks that pay you to own them.

Full Disclosure: Long MMM, EMR, TEG, KO, O, ED, NNN, HCP. See a list of all my income holdings here.

(Photo Credit)

9 Dividend Stocks Sending More Cash To Shareholders *

D4L — Fri, 11 Mar 2011 07:30:22 +0000

We all are looking for the perfect dividend stock. In an utopian world, the perfect dividend stock would be one that is both high-yield and provide a high dividend growth rate. Its share price would appreciate ratable with its increasing dividend. All of this would be driven by increasing earnings and cash flow.

Though they are not perfect, the stocks below did recently reward their investors with higher cash dividends:

Entertainment Properties Trust (EPR) is a specialty real estate investment trust (REIT) that invests in properties in select categories which require unique industry knowledge. March 10th the company increased its quarterly dividend 8% to $0.70/share. The dividend is payable April 15, 2011 to shareholders of record on March 31, 2011. The yield based on the new payout is 6.0%.

Compass Diversified Holdings (CODI) is a public investment firm specializing in acquiring controlling stakes in small to middle market companies. March 10th the company increased its quarterly dividend 6% to to $0.36/share. The distribution is payable on April 12, 2011 to all holders of record as of March 29, 2011. The yield based on the new payout is 9.8%.

Warwick Valley Telephone Company (WWVY) is a full service telecommunications company operating in portions of New York New Jersey, offering local, long distance, Internet and video services. March 10th the company increased its quarterly dividend 8% to $0.26/share. The dividend is payable on March 31, 2011 to shareholders of record as of March 21, 2011. The yield based on the new payout is 6.9%.

Main Street Capital Corporation (MAIN) is a business development company specializing in equity, equity related, and debt investments in small and lower middle market companies. March 9th the company increased its monthly dividend 4% to $0.13/share. The dividend is payable on April 15, 2011, to shareholders of record on March 24, 2011. The yield based on the new payout is 8.1%.

Staples, Inc. (SPLS) is the world’s largest office products company offering a broad selection of office supplies, electronics, technology and office furniture as well as business services. March 8th the company increased its quarterly dividend 11% to $0.10/share. The dividend is payable on April 14, 2011, to shareholders of record on March 25, 2011. The yield based on the new payout is 2.0%.

Applied Materials, Inc. (AMAT) provides nanomanufacturing technology solutions for the semiconductor, flat panel display, solar, and related industries worldwide. March 8th the company increased its quarterly dividend 14% to $0.08 per share payable on the company’s common stock. The dividend is payable on June 22, 2011 to stockholders of record as of June 1, 2011. The yield based on the new payout is 2.0%.

Qualcomm Incorporated (QCOM) is a leading developer and innovator of advanced wireless technologies, products and services. March 8th the company increased its quarterly dividend 13 percent to $0.215/share. The dividend is payable after March 25, 2011. The yield based on the new payout is 1.5%.

Piedmont Natural Gas (PNY) is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee. March 4th the company increased its quarterly dividend 3.6% to $0.29/share. The dividend is payable April 15, 2011, to shareholders of record at the close of business on March 25, 2011. this is the 33rd consecutive year the company has increased its dividend. The yield based on the new payout is 3.8%.

Myers Industries, Inc. (MYE) is an international manufacturer of polymer products for industrial, agricultural, automotive, commercial, and consumer markets. March 4th the company increased its quarterly dividend 8% to $0.07/share. The dividend is payable April 4, 2011, to shareholders of record as of March 10, 2011. The yield based on the new payout is 2.9%.

Full Disclosure: Long PNY. See a list of all my income holdings here.