Dividends Value » MGEE

9 Stocks Raising The Dividend Growth Bar *

D4L — Fri, 27 Aug 2010 07:30:52 +0000

Have you ever noticed those that most vehemently attack a buy-and-hold strategy really don’t understand how the strategy works? They confuse a buy-and-hold strategy with day-trading with a longer duration. A true implementation of buy-and-hold includes a focus on blue-chip stocks with a sustainable advantage, along with a reasonable asset allocation framework. One sign of a blue-chip stock is a long string of dividend increases.

Below are several companies that have recently raised the bar by increasing their cash dividends:

Lorillard (LO) is the third largest U.S. tobacco company and the leading manufacturer and marketer of menthol cigarettes. August 20th the company increased its quarterly dividend 12.5% to $1.125/share. The dividend is payable on September 10, 2010 to stockholders of record as of September 1, 2010. The ex-dividend date is August 30, 2010. The yield based on the new payout is 5.97%.

Northrim BanCorp (NRIM) is one of the largest commercial banks in Alaska, with operations primarily in Anchorage and Fairbanks. August 20th the company raised its quarterly dividend 20% to $0.12/share. The dividend is payable September 17, 2010, to shareholders of record at the close of business September 9, 2010. The yield based on the new payout is 2.93%.

Badger Meter (BMI) is a leading manufacturer and marketer of products incorporating liquid flow measurement and control technologies developed both internally and with other technology companies. August 20th the company increased its quarterly dividend $16.6% to $0.14/share. The dividend is payable on Sept. 15 to shareholders of record on Aug. 31. The ex-dividend date is Aug. 27. BMI is a Dividend Achiever and has raised its dividend for 18 consecutive years. The yield based on the new payout is 1.50%.

MGE Energy (MGEE) generates and distributes electricity and distributes natural gas in Wisconsin. August 20th the company raised its quarterly dividend to $0.3751/share. The dividend is payable on Sept. 15 to shareholders of record on Sept. 1. The ex-dividend date is Aug. 30. MGEE is a Dividend Achiever and has raised its dividend for 35 consecutive years. The yield based on the new payout is 4.14%.

G&K Services (GKSR) provides branded identity apparel and facility services programs. August 23rd the company increased its quarterly dividend 27% to $0.095/share. The dividend is payable on September 30, 2010 to shareholders of record at the close of business on September 16, 2010. The ex-dividend date is September 1. The yield based on the new payout is 1.93%.

Westlake Chemical (WLK) is an integrated manufacturer of petrochemicals, polymers and fabricated vinyl products. August 23rd the company raised its quarterly 10% dividend to $0.0635/share. The dividend is payable on September 16, 2010, to stockholders of record on September 1, 2010. The ex-dividend date is August 30. The yield based on the new payout is 1.02%.

Todd Shipyards (TOD) repairs, overhauls, converts, and constructs commercial and military ships in the Pacific Northwest. August 23rd the company increased its quarterly dividend to $0.10/share. This dividend is payable December 23, 2010, to shareholders of record as of December 8, 2010. The yield based on the new payout is 1.99%.

Bob Evans Farms (BOBE) owns and operates 571 Bob Evans Restaurants & 132 Mimi’s Cafes. It also produces and distributes pork sausage, complementary home-style convenience food items. August 25th the company raised its quarterly dividend 11.1% to $0.20/share. The dividend is payable on September 21 to stockholders of record at the close of business on September 7, 2010. The ex-dividend date is September 3, 2010. The yield based on the new payout is 3.14%.

Ship Finance (SFL) owns an international fleet of crude oil tankers, which are leased under long-term, fixed-price charters. August 26th the company increased its quarterly dividend to $0.35/share. The yield based on the new payout is 7.87%.

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)

Increasing Dividend Yield Part I: Utilities *

D4L — Wed, 03 Mar 2010 11:30:05 +0000

This is the first installment in a multi-part series that looks at various options used by income investors to boost their yield while waiting for dividend growth to lift their portfolio’s overall yield-on-cost. This week we are looking at Utilities – those investments long considered as a safe harbor for “orphans and widows.”

What’s the difference between a Ponzi scheme and a utility company? Before I answer that question, let’s look at what a Ponzi scheme is. Wikipedia defines it as:

A fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

In effect, a Ponzi scheme pays yesterday’s investors with money from today’s investors. It works great until there aren’t enough new investors to pay the old investors. In a similar manner, most utility companies rely on new capital either in the form of debt or equity to fund investment and to pay dividends. Consider the following:

Atmos Energy Corp. (ATO) – Yield: 4.88%
Shares Outstanding: 2000 31m; 2009 92m
Long-Term Debt: 2000 363.2m; 2009 2,159.5m
Years of Negative Free Cash Flow: 5 of 10

Black Hills Corp. (BKH) – Yield: 5.10%
Shares Outstanding: 2000 22m; 2009 38m
Long-Term Debt: 1999 160.7m; 2008 719.2m
Years of Negative Free Cash Flow: 7 of 10

Connecticut Water Service Inc. (CTWS) – Yield: 4.01%
Shares Outstanding: 2000 7m; 2009 8m
Long-Term Debt: 1999 65.4m; 2008 92.2m
Years of Negative Free Cash Flow: 5 of 10

California Water Service Group (CWT) – Yield: 3.29%
Shares Outstanding: 2000 15m; 2009 20m
Long-Term Debt: 1999 156.6m; 2008 373.5m
Years of Negative Free Cash Flow: 10 of 10

Consolidated Edison, Inc. (ED) – Yield: 5.52%
Shares Outstanding: 2000 212m; 2009 276m
Long-Term Debt: 2000 5,415.4m; 2009 9,854.0m
Years of Negative Free Cash Flow: 6 of 10

MGE Energy Inc. (MGEE) – Yield: 4.40%
Shares Outstanding: 2000 16m; 2008 22m
Long-Term Debt: 1999 148.6m; 2008 272.5m
Years of Negative Free Cash Flow: 7 of 10

Middlesex Water Co. (MSEX) – Yield: 4.31%
Shares Outstanding: 2000 10m; 2008 13m
Long-Term Debt: 1999 82.5m; 2008 118.2m
Years of Negative Free Cash Flow: 10 of 10

Progress Energy, Inc. (PGN) – Yield: 6.48%
Shares Outstanding: 2000 157m; 2008 260m
Long-Term Debt: 1999 3028.6m; 2008 10,659.0m
Years of Negative Free Cash Flow: 5 of 10

Integrys Energy Group, Inc. (TEG) – Yield: 6.17%
Shares Outstanding: 2000 26m; 2008 76m
Long-Term Debt: 1999 634.5m; 2008 2,396.7m
Years of Negative Free Cash Flow: 10 of 10

Each of the above companies are growing their debt and shares outstanding while generating insufficient cash to fund their operating expenses, including normal capital replacements, in at least 5 of the last 10 years. For a company to consistently raise its dividends, it must generate strong cash flows sufficient to meet operating obligations and to service outstanding debt. When the day comes that these companies can not raise enough capital to fund the operating requirements, the first source of additional cash will likely come in the form of a lower or eliminated dividend.

So, back to the original question, what is the difference between a Ponzi scheme and a utility? The answer is simply disclosure. All the above information on these companies was made available via S.E.C. filings. Unlike Bernard Madoff, these companies are telling you exactly what they are doing, thus there is no intent to defraud. I own some of the companies above, but I won’t be rushing to add to increase my positions.

Caveat emptor!

Full Disclosure: Long ED, PGN, TEG. See a list of all my income holdings here.

(Photo Credit)

38 Dividend Securities For A Well-Rounded Asset Allocation *

D4L — Wed, 17 Feb 2010 11:30:12 +0000

I am a firm believer that asset allocation plays a significant part in a portfolio’s long-term results. Recently, I received a question asking if you could have a diversified portfolio of dividend stocks. It is an interesting question that deserves further examination.

As for my portfolio, I consider asset allocation only when looking at my holdings in total. It would be much too difficult to maintain a good allocation within individual portfolios (income, growth, 401(k), Roth IRA, etc.), while trying to maintain my overall allocation. However, an investor could build a degree of allocation into a portfolio of dividend income securities. Consider the following:

Business Services Sector

Automatic Data Processing Inc. (ADP)
Yield: 3.33% | Style: Large Growth | Analysis
C H Robinson Worldwide Inc. (CHRW)
Yield: 1.86% | Style: Large Growth
Expeditors International of Washington Inc. (EXPD)
Yield: 1.16% | Style: Mid Growth

Consumer Goods Sector

Clorox Company (CLX)
Yield: 3.23% | Style: Mid Core
Coca-Cola Company (KO)
Yield: 3.04% | Style: Large Growth | Analysis
Procter & Gamble Company (PG)
Yield: 2.85% | Style: Large Core | Analysis

Consumer Services Sector

Genuine Parts Company (GPC)
Yield: 4.19% | Style: Mid Value | Analysis
Sysco Corporation (SYY)
Yield: 3.56% | Style: Large Core | Analysis
McDonald’s Corporation (MCD)
Yield: 3.22% | Style: Large Core | Analysis

Energy Sector

BP Plc ADR (BP)
Yield: 6.15% | Style: Large Value
Chevron Corporation (CVX)
Yield: 3.75% | Style: Large Value
ExxonMobil Corporation (XOM)
Yield: 2.56% | Style: Large Value

Financial Services Sector

Harleysville Group Inc. (HGIC)
Yield: 3.90% | Style: Small Value | Analysis
Chubb Corporation (CB)
Yield: 2.85% | Style: Large Value | Analysis
Aflac Inc. (AFL)
Yield: 2.38% | Style: Large Core | Analysis

Hardware Sector

Diebold Incorporated (DBD)
Yield: 3.67% | Style: Small Value
Linear Technology (LLTC)
Yield: 3.23% | Style: Mid Core
Raven Industries Inc. (RAVN)
Yield: 1.90% | Style: Small Growth | Analysis

Health Care Sector

Meridian Bioscience Inc. (VIVO)
Yield: 3.27% | Style: Small Growth
Johnson & Johnson (JNJ)
Yield: 3.08% | Style: Large Core | Analysis
Cardinal Health Inc. (CAH)
Yield: 2.10% | Style: Large Core | Analysis

Industrial Materials Sector

Nucor Corp. (NUE)
Yield: 3.40% | Style: Large Core | Analysis
Emerson Electric Co. (EMR)
Yield: 2.90% | Style: Large Core | Analysis
3M Company (MMM)
Yield: 2.58% | Style: Large Core

Media Sector

McGraw-Hill Companies Inc. (MHP)
Yield: 2.63% | Style: Large Core

Pharmaceuticals Sector

Eli Lilly & Company (LLY)
Yield: 5.77% | Style: Large Value
Abbott Laboratories (ABT)
Yield: 2.97% | Style: Large Growth | Analysis

Real Estate Sector

Essex Property Trust (ESS)
Yield: 5.14% | Style: Mid Core
Corporate Office Properties Trust Inc. (OFC)
Yield: 4.29% | Style: Mid Core
Federal Realty Investment Trust (FRT)
Yield: 4.06% | Style: Mid Core

Telecommunications Sector

CenturyLink Inc. (CTL)
Yield: 8.10% | Style: Large Value
AT&T Inc. (T)
Yield: 6.54% | Style: Large Value | Analysis

Utilities Sector

Integrys Energy Group Inc. (TEG)
Yield: 6.61% | Style: Mid Value
Consolidated Edison Company (ED)
Yield: 5.59% | Style: Large Value
MGE Energy Inc. (MGEE)
Yield: 4.45% | Style: Small Core

Bonds

Vanguard Short-Term Bond ETF (BSV)
Yield: 2.74% | Style: Short-Term Bond
Vanguard Intermediate-Term Bond ETF (BIV)
Yield: 4.32% | Style: Intermediate-Term Bond
Vanguard Long-Term Bond ETF (BLV)
Yield: 5.16% | Style: Long-Term Bond

Needless to say, the above will not provide a perfect allocation, but it goes a long way to provide diversity in a portfolio focused only on income securities. In my personal portfolio, I buy the best available dividend securities and use my other investments to balance my asset allocation.

Full Disclosure: Long ABT, ADP, AFL, BIV, BLV, BP, CLX, CTL, CVX, ED, EMR, GPC, HGIC, JNJ, KO, LLY, MCD, MMM, NUE, PG, SYY, T, TEG. See a list of all my income holdings here.

(Photo Credit)

10 Stocks Raising Their Dividends *

D4L — Fri, 28 Aug 2009 10:30:38 +0000

Are you confident and secure in your investing process? It appears many people were not. From the famed Canadian dividend investor Derek Foster who sold all his dividend investments in February to co-workers who have moved to the sidelines waiting on the bottom. Many investors who lost confidence and exited the market missed the significant rally over the last couple of months.

Below are several companies showing confidence in the future by rewarding their shareholders with higher cash dividends:

G&K Services (GKSR) rents uniforms, and offers uniforms and other related products for sale. This past week, the company increased its quarterly dividend by 7% to $0.075/share. The dividend is payable on September 24, 2009 to shareholders of record at the close of business on September 17, 2009. The current yield based on the new dividend is 1.31%.

HCC Insurance (HCC) is a multi-line insurer specializes in aviation, marine, medical stop-loss, offshore energy and property and casualty insurance in the U.S. and the U.K. Recently, the company increased its quarterly dividend by 8% to $0.135/ahare. The dividend is payable to stockholders of record on October 1, 2009, and will be paid on or about October 14, 2009. HCC is a Dividend Achiever and has increased its dividend for 13 consecutive years. The current yield based on the new dividend is 2.06%.

Delta Natural Gas (DGAS) distributes or transports natural gas to some 38,000 retail customers in central and southeastern Kentucky; and transports natural gas to industrial customers. Last Friday, the company boosted its quarterly dividend 1.6% to $0.325/share. The dividend will be paid September 15, 2009 to all common shareholders of record as of August 31, 2009. The current yield based on the new dividend is 5.18%.

MGE Energy (MGEE) is the holding company is Madison Gas & Electric, which generates and distributes electricity and distributes natural gas in Wisconsin. This past week, the company raised its quarter dividend to $0.3684/share. The dividend is payable Sept. 15, 2009, to shareholders of record Sept. 1, 2009. MGEE is a Dividend Achiever and Dividend Champion, and has increased its dividend for 33 consecutive years. The current yield based on the new dividend is 4.01%.

Westlake Chemical (WLK) is an integrated manufacturer of petrochemicals, polymers and fabricated vinyl products. Monday, the company raised its quarterly dividend 9.5% to $0.0575/share. The dividend is payable September 17, 2009, to stockholders of record on September 2, 2009. The current yield based on the new dividend is 0.93%.

Alliance Financial (ALNC) provides financial and banking products and services via 29 customer service facilities and a trust administration center in New York. Tuesday, the company boosted its quarterly dividend 7.7% to $0.28/share. The dividend is payable October 2, 2009 to shareholders of record on September 17, 2009. The current yield based on the new dividend is 4.01%.

Guess? (GES) offers one of the world’s leading lifestyle collections of contemporary apparel and accessories for men, women and children. Wednesday, the company raised its quarterly dividend 25% to $0.125/share. The current yield based on the new dividend is 1.56%.

ESSA Bancorp (ESSA) is a holding company of ESSA Bank & Trust, a full-service, community-oriented savings association. Wednesday, the company jumped its quarterly dividend 25% to $0.05/share. The dividend is payable on September 30, 2009. The current yield based on the new dividend is 1.48%.

Altria (MO) Yesterday, the company increased its quarterly dividend 6.4% to $0.34/share. The quarterly dividend is payable on October 9, 2009 to stockholders of record as of September 15, 2009. The current yield based on the new dividend is 7.44%.

Lawson Products (LAWS) primarily distributes replacement fasteners and other parts. Thursday doubled its quaterly dividend to $0.06/share. The dividend is payable October 13, 2009 to stockholders of record September 29, 2009. The current yield based on the new dividend is 1.26%.

Increasing dividends are a positive sign that companies have confidence in the future. For stocks with a long string of consecutive dividend increases, see this list.

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