Dividends Value » BR

3 Signs of an Impending Dividend Cut

D4L — Fri, 06 Aug 2010 07:30:39 +0000

Most investors are not surprised when a company cuts its dividend. They saw the early warning signs well in advance of the actual cut. Here are three signs that a company is heading toward a dividend cut:

1.) An abrupt or permanent shift in a company’s business model as a result of business conditions.
2.) A dividend yield that is higher than average and/or higher than others in the industry.
3.) Diminishing cash available to pay dividends.

Ultimately, the ability of a company to pay its dividend is determined by its cash position – both cash on its balance sheet and its ability to generate cash flow. Below are several companies that are NOT cutting their dividends, but instead raising them:

BreitBurn Energy (BBEP) explores and develops oil & gas properties in U.S. July 30th the company increased its quarterly distribution 2% to $0.3825/unit. The distribution is payable on August 13, 2010 to the record holders of common units at the close of business on August 9, 2010. The ex-distribution date is August 5, 2010. The yield based on the new payout is 9.40%.

American Water (AWK) provides water, wastewater and other water-related services to residential, commercial, and industrial customers in the United States and Canada. July 30th the company raised its quarterly dividend 5% to $0.22/share. The quarterly dividend is payable on September 1, 2010 to all shareholders of record as of August 18, 2010. The ex-dividend date is August 16, 2010. The yield based on the new payout is 4.08%.

Donaldson Co. (DCI) operates as a worldwide manufacturer of filtration systems and replacement parts. July 30th the company increased its quarterly dividend 4% to $0.125/share. The dividend is payable September 10th to shareholders of record as of August 20, 2010. The ex-dividend date is August 18, 2010. DCI is a Dividend Achiever and has raised its dividend for 23 consecutive years. The yield based on the new payout is 1.07%.

NuStar GP Holdings, LLC (NSH) owns the 2% general partner interest, a 16.7% limited partner interest, and the incentive distribution rights in NuStar Energy L.P. August 2nd the partnership raised its quarterly distribution 2% to $0.46/unit. The distribution is payable on August 18, 2010, to holders of record as of August 6, 2010. The ex-distribution date is August 16, 2010. The yield based on the new payout is 5.98%.

PetMed Express (PETS) markets prescription and non-prescription pet medications and other health products for dogs, cats, and horses directly to the consumer. August 2nd the company raised its quarterly dividend 25% to $0.125/share. The dividend is payable on August 27, 2010, to shareholders of record at the close of business on August 13, 2010. The ex-dividend date is August 11, 2010. The yield based on the new payout is 3.11%.

Herbalife (HLF) sells weight-management, nutritional supplement, and personal care products. August 2nd the company increased its quarterly dividend to $0.25/share. The yield based on the new payout is 1.91%.

W&T Offshore (WTI) is focused on exploring and developing hydrocarbon resources in the Gulf of Mexico, primarily in the deep shelf and deepwater. August 2nd the company raised its quarterly dividend to $0.04/share. The dividend is payable on September 10, 2010, to the shareholders of record on August 20, 2010. The yield based on the new payout is 1.68%.

Steris (STE) develops, manufactures and markets infection prevention, contamination control, microbial reduction, and surgical and critical care support products and services. August 3rd the company increased its quarterly dividend 36% to $0.15/share. The dividend is payable September 21, 2010 to shareholders of record at the close of business on August 24, 2010. The ex-dividend date is August 20, 2010. The yield based on the new payout is 1.88%.

Euroseas (ESEA) provides ocean-going transportation services worldwide. It owns and operates drybulk carriers that transport iron ore, coal, grains, bauxite, phosphate and fertilizers. August 3rd the company raised its quarterly dividend 20% to $0.06/share. The dividend is payable on September 03, 2010 to all shareholders of record as of August 25, 2010. The ex-dividend date is August 23, 2010. The yield based on the new payout is 5.60%.

Nationwide Health Properties (NHP) invests in senior housing facilities, long-term care facilities and medical office buildings. August 3rd the company increased its quarterly dividend 2.2% to $0.46/share. The dividend is payable on September 3, 2010 to stockholders of record on August 20, 2010, with an ex-dividend date of August 18, 2010. The yield based on the new payout is 4.81%.

Broadridge Financial (BR) provides technology-based outsourcing solutions to the financial services industry. August 3rd the REIT raised its quarterly dividend 7% to $0.15/share. The dividend is payable on October 1, 2010, to stockholders of record at the close of business on September 15, 2010. The ex-dividend date is September 13, 2010. The yield based on the new payout is 2.92%.

Atrion Corp. (ATRI) designs, develops, manufactures, markets, sells and distributes various products and components, primarily for the medical and health care industry. August 3rd the company increased its quarterly dividend 16.7% to $0.42/share. The dividend is payable on September 30, 2010 to stockholders of record at the close of business on September 15, 2010. The ex-dividend is September 13, 2010. The yield based on the new payout is 1.68%.

Acme United (ACU) supplies cutting, measuring, and safety products to the school, home, office, and industrial markets in the United States, Canada, Europe, and Asia. August 4th the company raised its quarterly dividend 20% to $0.06/share. The dividend is payable on October 21, 2010 to stockholders of record on the close of business on October 1, 2010, with an ex-dividend date of September 30, 2010. The yield based on the new payout is 2.30%.

Murphy Oil (MUR) has exploration and production interests worldwide, and refining and marketing operations in the U.S. August 4th the company increased its quarterly dividend 10% to $0.275/share. The dividend is payable on Sept. 1 to shareholders of record on August 16. The ex-dividend date is August 12. MUR is a Dividend Achiever and has raised its dividend for 14 consecutive years. The yield based on the new payout is 1.94%.

Leggett & Platt (LEG) makes a broad line of bedding and furniture components and other home, office and commercial furnishings, as well as diversified products for non-furnishings markets. August 4th the company raised its quarterly dividend 3.8% to $0.27/share. The dividend is payable on October 15 to shareholders of record on September 15. The ex-dividend date is September 13. LEG is a Dividend Aristocrat and has raised its dividend for 39 consecutive years. The yield based on the new payout is 5.08%.

Monsanto (MON) is a global provider of agricultural products and integrated solutions for farmers. August 4th the company raised its quarterly dividend 5.7% to $0.28/share. The dividend is payable on October 29, 2010 to shareholders of record on October 8, 2010. The ex-dividend date is October 6, 2010. The yield based on the new payout is 1.88%.

Delphi Financial Group (DFG) provides a diverse portfolio of employee benefit products to customers across the U.S. August 5th the company increased its quarterly dividend 10% to $0.11/share. The dividend is payable on September 1, 2010 to shareholders of record at the close of business on August 18, 2010, with an ex-dividend date of August 16, 2010. The yield based on the new payout is 1.71%.

Dover Corp. (DOV) manufactures a broad range of specialized industrial products and sophisticated manufacturing equipment. August 5th the company raised its quarterly dividend 6% to $0.275/share. The dividend is payable September 15, 2010 to shareholders of record as of August 31, 2010. The ex-dividend date is August 7, 2010. DOV is a Dividend Aristocrat and has raised its dividend for 55 consecutive years. The yield based on the new payout is 2.24%.

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 LEG. See a list of all my income holdings here.

(Photo Credit)

Dividend Stocks: Lowering Risk By Increasing Dividends *

D4L — Fri, 14 Aug 2009 10:30:53 +0000

If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Throughout time every angle has been tried and failed. Inherently, individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis. However, you can mitigate some of this risk by selecting solid dividend paying companies with a track record of increasing their dividends each year.

Below are several companies stepping forward in uncertain time and rewarding their shareholders with higher cash dividends:

Chemed (CHE) provides hospice services for patients with severe, life-limiting illnesses; and also provides plumbing and drain cleaning services. This past week, the company raised its quarterly dividend 100% to $0.12/share. The dividend is payable on September 4, 2009, to shareholders of record as of August 17, 2009. It is the 153rd consecutive quarterly dividend paid by Chemed in its 38 years as a public company. The current yield based on the new dividend is 1.10%.

Broadridge Financial (BR) provides technology-based outsourcing solutions to the financial services industry. On Tuesday, the company increased its annual dividend for fiscal year 2010 to $0.56/share from $0.28/share. The current yield based on the new dividend is 2.86%.

Equity LifeStyle Properties (ELS) is a real estate investment trust owns and operates manufactured housing communities throughout the U.S. Earlier this week, the company boosted its quarterly dividend 20% to $0.30/share. The dividend will be paid on October 9, 2009 to shareholders of record on September 25, 2009. The current yield based on the new dividend is 2.80%.

Kinross Gold (KGC) is the fourth largest primary gold producer in North America and is the fifth largest in the world. The company has nine mines in Canada, the U.S., Brazil, Russia and Chile. Yesterday, the company boosted its quarterly dividend by 25% to $0.05/share. The current yield based on the new dividend is 1.01%.

Consolidated Water (CWCO) develops and operates seawater desalination plants and water distribution systems in the Cayman Islands, Belize, the British Virgin Islands, and The Bahamas. Thursday, the company increased it quarterly dividend to $0.075/share. The current yield based on the new dividend is 1.50%.

Connecticut Water Service (CTWS) is a provider of regulated water utility services to customers in Connecticut also conducts unregulated operations. On August 12th, the company increased its quarterly dividend by 2.2% to $0.2275/share. The dividend is payable September 15, 2009, to shareholders of record as of September 1, 2009. The ex-dividend date is September 29. CTWS is a Dividend Champion that has increased its dividend for 40 consecutive years. The current yield based on the new dividend is 4.08%.

Many companies have chosen to reward their shareholders with annual dividend increases. For stocks with a long string of consecutive dividend increases, see this list.

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

(Photo Credit)

Dividend Stocks In the News: August 23, 2008 *

D4L — Sat, 23 Aug 2008 10:30:00 +0000

You can’t spend earnings. At first glance, this probably seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important investing axiom for any type of investor. Let me explain. Earnings are that which is derived from the exchange of a product, service or other, less associated expenses. Ultimately, it is our desire that earnings are converted to something that can be spent, such as cash. Cash flow is what ultimately drives the value of any financial asset.

Below are several select companies that recently decided deliver more cash to their shareholders through increased dividends:

MCOL Int’l (ACO) Raises Qtr. Dividend 12.5% to $0.18/Share
Broadridge Financial (BR) Boosts Qtr. Dividend 17% to $0.07/Share
Administaff (ASF) Boosts Qtr. Dividend 18% to $0.13/Share
Parker Hannifin (PH) Boosts Dividend 19% to $0.25/Share
Dynex Capital (DX) Raises Qtr. Dividend 53% to $0.23/Share

After running these companies through my D4L-PreScreen.xls model, ACO with a NPV of MMA Differential of $5,514 is worth a second look. I have added it to my list for a more detailed evaluation.

Disclosure: No position in any of the aforementioned stocks.

(Photo: sanja gjenero)