Dividends Value » JPM

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%.

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.

(Photo Credit)

No Such Thing As Free (TARP) Money *

D4L — Wed, 13 May 2009 10:30:05 +0000

Several banks have learned the hard way that when you get the U.S. government’s money, even in the form of a loan, as a bonus you get the government’s “help” running your business. Needless to say, this is not very appealing to most businesses. Looking at the country’s deficit, the government doesn’t specialize in running anything in the black. So what’s a company to do when they realize they’re in a bad relationship?

Kelly King, Chairman and CEO of BB&T (BBT), a large U.S. regional bank and vocal critic of the government’s bank bailout plan, described its participation in the TARP program as “destructive.” King went on to say “Our plan is to repay the TARP funds as soon as it is humanly possible. It creates excessive controls, it has a negative impact on our people and our strategies and it runs a great risk of politicizing the lending process, which is very unhealthy.”

On May 11th, BBT announced that it would sell $1.5 billion of stock and reduce its dividend by 68 percent so that it can repay a $3.1 billion investment. Goldman Sachs & Co (GS), JPMorgan (JPM) and Morgan Stanley (MS) are arranging the stock offering.

Having previously increased its dividend for 37 consecutive years, this is a tough pill for a once-proud Dividend Aristocrat to swallow. King said the decision marked “the worst day in my 37-year career,” and pledged to increase the payout when he can. Like most dividend cutters, BBT’s shares plummeted falling over 7.5% on the day of the announcement and another 7.5% on the following day.

BBT wasn’t the only one running from the government’s “help”. Two other large U.S. banks that passed the government’s “stress test” announced stock offerings on Monday to raise capital in order to repay their TARP debt. U.S. Bancorp (USB), the parent company of U.S. Bank, said Monday that it has launched a $2.5 million public offering of its common stock and Capital One Financial Corp. (COF) also announced a public offering of 56 million shares of its common stock.

As with all individual income stocks that cut their dividends, I immediately sold my entire position in BBT after reading the announcement.

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

As Financials Wither, One Titan Stands Strong *

D4L — Fri, 06 Mar 2009 11:30:48 +0000

Last week we mentioned that JPMorgan (JPM), the second-largest U.S. bank, slashed its dividend by 87% to $0.05. Possibly that wasn’t quite enough to keep keep big brother happy, so JPM took their quarterly dividend down to $0.01/share. The dividend is to be paid on Friday, April 3, 2009 to common stockholders of record as of Friday, March 20, 2009. JPM closed down 8.14% – it is always good to deliver bad news twice.

Wednesday, following in JPM’s footsteps, U.S. Bancorp (USB) slashed its dividend by 88% to $0.05/share. U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, “The decision to reduce our quarterly dividend was thoughtfully considered and very difficult, given the importance of the dividend to our shareholders.” USB closed down 12.48% after the announcement. Then dropped another 18.2% on Thursday.

While the financials continue to wither, some companies are designed to flourish in these difficult economic times. Yesterday, Wal-Mart (WMT) reported that same store sales, ex-fuel, for the month rose 5.1%, and its Board increased the quarterly dividend 15% to $0.2725/share. WMT’s dividend now yields around 2%. This is the 35th consecutive year WMT has raised its dividend. CEO Mike Duke said, “The strength of our operations and the resulting strong financial position allow us to increase our dividend payout to shareholders again this year. Our free cash flow remains strong enough to fund Wal-Mart’s growth around the world, make strategic acquisitions and fund returns to shareholders through dividends and share repurchases.”

Other companies are poised to perform by raising their cash dividends to shareholders. Here are several that have recently done just that:

Qualcomm (QCOM) lifts its qtr. dividend 6% to $0.17/share (yield 1.84%)
General Dynamics (GD) boosts its qtr. dividend 8.6% to $0.38/share (yield 3.48%)
WGL Holdings (WGL) raises its quarterly dividend 3.5% to $0.3675/share (yield 4.68%)

For more companies around the world with a long string of consecutive dividend increases, see Dividends Value’s Stock Ideas page.

Full Disclosure: Long WMT

(Photo: Steve Woods)

Federal Reserve To Urge Banks to Stop Paying Dividends *

D4L — Mon, 02 Mar 2009 11:30:00 +0000

Last Wednesday, Bloomberg reported that The Federal Reserve is urging Wells Fargo & Co. (WFC) and dozens of banks getting bailout funds to put the money into new loans, bolster loss reserves and not to pay dividends to shareholders. It seems the message has been heard. JPMorgan (JPM), the second-largest U.S. bank, slashed its dividend by 87% to $0.05. CEO Jamie Dimon said the decision wasn’t “directly related” to the $25 billion it received under the government’s Troubled Asset Relief Program (TARP). Not all companies have the government helping them run their businesses, so they are free to continue raising their dividends. Here are several that have done just that:

Unlike the athletes in the Olympics, attributing an impressive dividend performance to drugs is a good thing for Abbott (ABT). The company is a diversified life science company is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics. This week the company announced it has increased its quarterly common dividend 11% to $0.40/share. The dividend yield on ABT shares is over 3%. This is the 37th consecutive year ABT has raised its dividend. Linked here is my most recent analysis of ABT.

Colgate-Palmolive Co. (CL) is a major consumer products company that markets oral, personal and household care, and pet nutrition products in more than 200 countries and territories. This week CL announced that its Board approved a 10% increase in its quarterly dividend to $0.44/share. It is payable on May 15, 2009 to shareholders of record as of April 24, 2009. The dividend yield on CL shares is over 2.5%. This is the 46th consecutive year CL has raised its dividend.

The Chubb Corp. (CB) is 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. CB last week declared a $0.35/share quarterly dividend payable April 7, 2009 to shareholders of record on March 20, 2009. This represents a 6.1% increase to $0.35/share. The dividend yield on CB shares is over 3.5%. This is the 44th consecutive year CB has raised its dividend.

Kimberly-Clark Corp. (KMB) is a leading consumer products company’s global tissue, personal care and health care brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark. KMB announced a 3.4% dividend increase bringing the quarterly dividend to $0.60/share. It is payable on April 2, 2009 to stockholders of record on March 6, 2009. This is the 37th consecutive year KMB has raised its dividend. The dividend yield on KMB shares is 4.92%. Linked here is my most recent analysis of KMB.

Other select companies recently raising the dividend bar include:

Tim Hortons (THI) Raises Qtr. Dividend by 11.1% to $0.10/share (yield 1.32%)
ITT Corp. (ITT) Boosts Qtr. Dividend by 22% to $0.2125/share (yield 2.15%)
Thomson Reuters (TRI) Boosts Qtr. Dividend 17% to $0.28/share (yield 4.38%)
Westar Energy (WR) Raises its Qtr. Dividend by 3.4% to $0.30/share (yield 6.93%)
PepsiAmericas (PAS) Boosts Q1 Dividend (yield 3.36%)

For more companies around the world with a long string of consecutive dividend increases, see Dividends Value’s Stock Ideas page.

Full Disclosure: Long KMB

(Photo: Steve Woods)

- Above-referenced Bloomberg Article

Wells Fargo: Things May Not Be Well at Wells *

D4L — Tue, 17 Feb 2009 11:30:04 +0000

I thought Bank of America (BAC) was strong enough to survive without cutting its dividend. It was better managed than Citigroup (C) and wasn’t in near the dire straits that C was in when it was forced to cut its dividend. This all changed with the announced acquisition of Merrill Lynch. When a company such as Merrill is sold at a fire sale, there usually is a reason. BAC is now learning why Merrill was so favorably priced – they got what they paid for. Is this same situation playing out with Wells Fargo’s (WFC) acquisition of Wachovia?

Once considered to be the best run bank in America by many analysts, WFC is starting to struggle. Did the WFC executives turn a blind eye to the underlying financial data and only focus on the prize they had been eying for some time? From an outsider looking in, this appears to be the case. After a much larger loss in the fourth quarter than expected, most analysts that follow the bank believe a dividend cut is inevitable and, like BAC, a second trip to the TARP trough could be in the works. Are the shareholders possibly looking at a $0.01 dividend in the future?

Analysts from Friedman, Billings, Ramsey & Co. in a January 29 note pointed out that WFC only remained “well capitalized” by regulators’ lights because of the government’s $25 billion TARP injection. WFC’s 7.88% capital cushion does not compare well with other troubled banks such as Citigroup (11.8%), J.P. Morgan (JPM) (10.8%) and Bank of America (10.7%).

Other warning signs include a sharp increase in the amount of assets held for sale $178 billion from $106 billion in the prior quarter. Goodwill climbed to $23 billion from $14 billion. In this environment, goodwill is a difficult asset to justify to the auditors and ultimately to the Securities and Exchange Commission (SEC). Could future impairments be in the works, as Wachovia did in its final days?

There is reason to be concerned. Though the actors are different, I have seen this play before and the outcome is tragic.

Full Disclosure: No position in the aforementioned stocks.

Investment Winners and Losers in an Obama Administration *

D4L — Thu, 06 Nov 2008 11:30:00 +0000

The election is over and no matter how you feel about Obama, he will be the next U.S. president. Some economists are projecting total government borrowing in excess of $1.5 trillion in the fiscal year ending next September. Such a sharp increase in new debt could push up interest rates and continue the downward pressure on the stock market. Even in a down market, there are always winners. Let’s take a look at some of the possibilities:

Energy
There is a belief that the new administration will channel money to the energy sector, such as solar energy and hybrid cars, as a way to stimulate the economy. Some possible beneficiaries include:

Suntech Power Holdings (STP)
SunPower Corp (SPWRA)
Energy Conversion Devices Inc. (ENER)

Defense
Against conventional wisdom, U.S. defense contractors tend to do well Democratic administrations. Winners would include:

Lockheed Martin (LMT)
Northrop Grumman (NOC)

Pharmaceuticals
With the credit crisis in the forefront, healthcare reform will likely be low on the priority list. That should provide stability for drug stocks and to investors seeking safety after a rough ride in the market. Stocks to consider:

Abbott Laboratories (ABT)
Eli Lilly and Co (LLY)
Pfizer Inc (PFE)

Financials
Banks may be the big losers in an Obama administration. There could be pressure put on banks to help borrowers avoid foreclosure by renegotiating mortgages. Also there could be pressure to lower fees on credit cards. Some banks that will feel the pressure include:

Bank of America Corp./Countrywide (BAC)
J.P. Morgan Chase & Co. (JPM)

Times will certainty be different, but it is important to remember a sound dividend investing philosophy historically has withstood the tests of time through both democratic and republican administrations. Don’t make the mistake of sitting on the sidelines.

Disclosure: Long LLY and PFE

References:
- How stock sectors might fare in an Obama administration
- U.S. Debt Could Tie Obama’s Hands