Industrial Materials Attributes

The Industrial Materials Sector consists of companies that manufacture products or otherwise harvest a product, such as a mining company. The products are most often inputs or raw materials into another manufacturing process, such as steel producer. Many of these companies are often referred to as members of the “smokestack industry” and are classified as cyclical stocks – a stock that rises and falls in step with the economy.

Timing is important when buying an industrial stock. If you buy when business is booming you will likely pay too much, which means a very low yield. Most stocks in this sector are currently overpriced. The average yield on Industrial Sector stocks that I follow is only 1.7%. This includes only 3 stocks yielding in the 3% range., with all the others sub-3%.  Several of these sub-3% companies were yielding in excess of 4% in 2008 when the world looked bleak for Industrial stocks.

Industrial Materials Companies

Below are several leading Industrial Materials companies that I follow. The companies selected have a dividend yield of 2.00%, or higher, and have raised their dividends for at least 15 years.

RPM International Inc. (RPM)
Yield: 3.5% | Growth:2.5 % | Years: 38
RPM International Inc. makes specialty coatings and products for the structural waterproofing and corrosion control markets, as well as products for the consumer, do-it-yourself, and hobby markets.

MDU Resources Group Inc. (MDU)
Yield: 3.0% | Growth: 1.9% | Years: 20
MDU Resources Group Inc. is involved in electric and natural gas distribution, natural gas storage, gathering and transmission, construction materials and mining, and oil and natural gas production.

Nucor Corporation (NUE)
Yield: 3.0% | Growth: 0.8% | Years: 37
Nucor Corporation is the largest minimill steelmaker in the U.S., Nucor has one of the most diverse product lines of any steelmaker in the Americas.

PPG Industries, Inc. (PPG)
Yield: 2.5% | Growth: 1.9% | Years: 37
PPG is a leading manufacturer of coatings and resins, flat and fiber glass, and industrial and specialty chemicals.

Illinois Tool Works Inc. (ITW)
Yield: 2.3% | Growth: 4.8% | Years: 47
Illinois Tool Works Inc. is a diversified manufacturer that operates a portfolio of about 840 industrial and consumer businesses throughout the world.

3M Company (MMM)
Yield: 2.3% | Growth: 2.5% | Years: 52
3M Co. provides enhanced product functionality in electronics, health care, industrial, consumer, office, telecommunications, safety & security and other markets via coatings, sealants, adhesives, and other chemical additives.

Harsco Corporation (HSC)
Yield: 2.3% | Growth: 1.9% | Years: 20
Harsco Corp. is a global industrial service provider and manufacturer has operations in steel mill services and access services, as well as construction.

Emerson Electric Co. (EMR)
Yield: 2.2% | Growth: 2.2% | Years: 55
Emerson Electric Co. designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial, and consumer markets around the world.

Air Products And Chemicals Inc. (APD)
Yield: 2.2% | Growth: 2.1% | Years: 29
Air Products and Chemicals Inc. is a major producer of industrial gases and electronics and specialty chemicals and also has interests in environmental and energy-related businesses.

General Dynamics (GD)
Yield: 2.1% | Growth: 10.1% | Years: 19
General Dynamics is the world’s fifth largest military contractor and also one of the world’s biggest makers of corporate jets.

United Technologies Corp. (UTX)
Yield: 2.0% | Growth: 10.4% | Years: 18
United Technologies Corp. portfolio includes Pratt & Whitney jet engines, Sikorsky helicopters, Otis elevators and Carrier air conditioners, among other products.

Pentair, Inc. (PNR)
Yield: 2.0% | Growth: 5.6% | Years: 34
Pentair Inc. makes and markets water and fluid control devices, and electrical and electronic enclosures.

Conclusion

The Industrial Materials Sector is the largest sector in my database of dividend stocks. Of the 198 stocks that I track, it currently is represented by 34 stocks (17%). As noted above, this is not a sector I am in a position to buy often, but when the time is right, I plan on taking full advantage of the opportunity. Two of my largest annualized returns (IRR) come from industrial stocks: 3M (MMM) at 46.5% and Emerson Electric Co. (EMR) at 49.7%. I wouldn’t buy them at their current valuation, but based on where they were when I purchased them, I am enjoying a healthy yield-on-cost.

Full Disclosure: Long NUE, ITW, MMM, EMR, GD, UTX. See a list of all my income holdings here.

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This expectation does not change even when the economy turns down and earnings decline; dividend growth investors still require annual dividend growth. The companies that are able to accomplish this are those with a operating model that generates strong free cash flows with room to pay out a higher percentage as dividends. Below are several companies with a low free cash flow payout (below 40%):

An interesting twist to the above is a 2006 study conducted by Credit Suisse that found high dividend yield stocks generally
outperformed those with lower yields. However, the best returns did not come from those with the highest yields, but those with higher yields coupled with low payout ratios. The study found that high yield, low payout stocks that produced the better returns were priced at low ratios of price-to-earnings, and as a corollary, at high ratios of earnings-to-price; i.e., earnings yield. Put another way, the stocks prices were depressed, thus creating the higher yield and a value play. Below are several dividend growth stocks with a higher yields (around 4%+) and low free cash flow payouts (50% and below):

At some point we will all want to retire, but that is not to say we want our portfolio to stop working for us. A good dividend growth stock portfolio will not only provide us income in our retirement, but provide us more income each year than the one before.

Full Disclosure: Long GD, MDT, ADP, PG, INTC, ABT, GPC, TEG, CINF, LLY, HGIC. See a list of all my income holdings here.

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Here are several stocks living up to shareholders’ expectations by raising their cash dividends:

Fastenal Company (FAST) distributes fasteners and other industrial and construction supplies through 2,400 stores throughout the U.S. and in a few foreign countries. July 12th the company increased its semi-annual dividend to $0.42/share. The dividend is payable September 3, 2010 to shareholders of record at the close of business on August 20, 2010. FAST is a Dividend Achiever and has raised its dividend for 17 consecutive years. The yield based on the new payout is 1.62%.

Genesis Energy (GEL) is a limited partnership that operates crude oil common carrier pipelines, is an independent gatherer and marketer of crude oil and operates a wholesale CO2 business. July 13th the partnership raised its quarterly distribution 8.7% over Q2/2009 to $0.375/unit. The distribution will be paid on August 13, 2010, to Common Unitholders of record at the close of business on August 3, 2010. The ex-distribution date is July 30, 2010. The yield based on the new payout is 7.39%.

Enterprise Products (EPD) is an integrated provider of natural gas and natural gas liquids services, including processing, fractionation, storage, transportation, and terminalling. July 13th the partnership increases its quarterly distribution 5.5% to $0.575/unit. The quarterly distribution will be paid on Thursday, August 5, 2010, to unitholders of record as of the close of business on Friday, July 30, 2010. The ex-distribution date is July 28, 2010. EPD is a Dividend Achiever and has raised its dividend for 12 consecutive years. The yield based on the new payout is 6.21%.

Duncan Energy Partners (DEP) transports, markets, and stores natural gas, as well as in transporting and storing natural gas liquids (NGLs) and petrochemicals in the U.S. July 13th the partnership raised its quarterly distribution 3.4% to $0.45/unit. The distribution will be paid Friday, August 6, 2010, to unitholders of record at the close of business on Friday, July 30, 2010. The ex-distribution date is July 28, 2010. The yield based on the new payout is 6.31%.

Cummins (CMI) i a leading manufacturer of truck engines also makes stand-by power equipment and industrial filters. July 13th the company increased its quarterly dividend 50% to $0.2625/share. The dividend is payable on Sept. 1 to shareholders of record on August 23. The ex-dividend date is August 21. The yield based on the new payout is 1.42%.

Healthcare Services Group (HCSG) provides housekeeping, laundry, linen, facility maintenance and food services to hospitals and other health care facilities. July 13th the company increases its quarterly dividend 4.5% to $0.23/share. The dividend is payable on August 6, 2010 to shareholders of record at the close of business July 23, 2010. The ex-dividend date is July 21, 2010. The yield based on the new payout is 4.96%.

National Semi (NSM) is a leading manufacturer of a broad line of semiconductors, including analog, digital and mixed-signal integrated circuits. July 14th the company raised its quarterly dividend 25% to $0.10/share. The dividend will be paid on Oct. 12, 2010 to shareholders of record at the close of business on Sept. 20, 2010. The ex-dividend date is September 16, 2010. The yield based on the new payout is 2.79%.

Walgreen (WAG) is the largest U.S. retail drug chain and operates more than 7,500 drug stores throughout the U.S. and Puerto Rico. July 14th the company increased its quarterly dividend 27% to $0.175/share. The dividend is payable Sept. 11, 2010, to shareholders of record Aug. 19, 2010. The ex-dividend date is August 15, 2010. WAG is a Dividend Aristocrat and has raised its dividend for 35 consecutive years. The yield based on the new payout is 2.38%.

ONEOK Partners (OKS) is a leading transporter of natural gas and natural gas liquids (NGLs) in the Mid-Continent area to market centers in the U.S. July 14th the partnership raised its quarterly distribution to $1.12/unit. The distribution is payable August 13, 2010, to unitholders of record as of July 30, 2010. The ex-distribution date is July 28, 2010. The yield based on the new payout is 6.55%.

National Retail Properties (NNN) invests in high-quality, freestanding retail properties subject to long-term net leases with major retail tenants. July 15th the REIT raised its quarterly dividend 1.3% to $0.38/share. The dividend is payable August 16, 2010 to common shareholders of record on July 30, 2010. The ex-dividend date is July 28, 2010. NNN is a Dividend Achiever and has raised its dividend for 19 consecutive years. The yield based on the new payout is 6.67%.

PPG Industries (PPG) is a leading manufacturer of coatings and resins, flat and fiber glass, and industrial and specialty chemicals. July 15th the company increased its quarterly dividend 1.9% to $0.55/share. The dividend is payable September 10, 2010, to shareholders of record August 10, 2010. The ex-dividend date is August 6, 2010. PPG is a Dividend Achiever and has raised its dividend for 37 consecutive years. The yield based on the new payout is 3.40%.

ONEOK (OKE) is an integrated natural gas company also has an energy marketing and trading business. July 15th the company raised its quarterly dividend 5% to $0.46/share. The dividend is payable August 13, 2010, to shareholders of record at the close of business July 30, 2010. The ex-dividend date is July 28, 2010. The yield based on the new payout is 4.00%.

Omega Healthcare (OHI) invests in and provides financing to the long-term care industry. Its portfolio includes health care facilities in 27 states. July 15th the REIT increased its quarterly dividend 12.5% to $0.36/share.The dividend is to be paid August 16, 2010 to common stockholders of record on July 30, 2010. The ex-dividend date is July 28, 2010. The yield based on the new payout is 6.90%.

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

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#10 Chubb Corp. (CB) 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.
Paid since: 1902 | Consecutive increases: 45 | Yield: 2.92%

#9 PPG (PPG) is a leading manufacturer of coatings and resins, flat and fiber glass, and industrial and specialty chemicals.
Paid since: 1899 | Consecutive increases: 36 | Yield: 3.55%

#8 Colgate-Palmolive Company (CL) is a consumer products company, whose products are marketed throughout the world. Colgate’s Oral Care products include toothpaste, toothbrushes, oral rinses, dental floss and pharmaceutical products.
Paid since: 1895 | Consecutive increases: 45 | Yield: 2.13%

#7 The Coca-Cola Company (KO) is the world’s largest soft drink company. It engages in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates, fruit juices and syrups worldwide.
Paid since: 1893 | Consecutive increases: 47 | Yield: 3.02% | [Analysis]

#6 The Procter & Gamble Company (PG) is focused on providing branded consumer goods products. The Company markets its products in more than 180 countries.
Paid since: 1891 | Consecutive increases: 53 | Yield: 2.92% | [Analysis]

#5 UGI Corp. (UGI) operates propane distribution, gas and electric utility, energy marketing and related businesses through subsidiaries.
Paid since: 1885 | Consecutive increases: 23 | Yield: 3.20%

#4 Consolidated Edison, Inc. (ED), through its subsidiaries, provides electric, gas, and steam utility services in the United States serving parts of New York, New Jersey and Pennsylvania.
Paid since: 1885 | Consecutive increases: 36 | Yield: 5.42%

#3 Eli Lilly and Company (LLY) discovers, develops, manufactures and sells prescription drugs that offers a wide range of treatments for neurological disorders, diabetes, cancer, and other conditions. The company also sells animal health products.
Paid since: 1885 | Consecutive increases: 42 | Yield: 5.52% | [Analysis]

#2 Exxon Mobil Corp. (XOM) is engaged in the exploration, production, and sale of crude oil, natural gas, petroleum products and petrochemicals. XOM is the world’s largest publicly owned integrated oil company.
Paid since: 1882 | Consecutive increases: 27 | Yield: 2.51%

#1 Stanley Works (SWK) is a worldwide producer of tools, hardware and specialty hardware for home improvement, consumer, industrial and professional use.
Paid since: 1877 | Consecutive increases: 42 | Yield: 2.44%

A strong dividend culture is a great place to start looking, but before buying we must also consider other factors such as: dividend fundamentals, ability to cover their dividend and fair value.

Full Disclosure: Long KO, PG, ED, LLY. See a list of all my income holdings here.

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This week as the weather turns cold the dividend increases heat up.  Below are several companies heating up their yields with increased cash dividends:

PPG Industries (PPG) is a global supplier of protective and decorative coatings. October 16th the company increased its dividend 2% to $0.54/share. The dividend is payable on Dec. 11 to shareholders of record Nov. 10. The ex-dividend date is November 6. PPG is a Dividend Aristocrat and has increased its dividend for 38 consecutive years. The yield based on the new payout is 3.62%.

El Paso Pipeline Partners L.P. (EPB) owns and operates natural gas transportation pipelines, storage and other midstream assets. October 19th the company raised its quarterly cash distribution 6% to $0.35/unit. The distribution will be paid November 13, 2009 on all unitholders of record as of the close of business on October 30, 2009. The ex-dividend date is October 28. The yield based on the new payout is 6.15%

Plains All American Pipeline (PAA) engages in interstate and intrastate crude oil transportation, terminalling and storage, as well as crude oil gathering and marketing. October 19th the company boosted its quarterly distribution 2% to $0.92/unit. The distribution is payable on November 13, 2009, to unitholders of record at the close of business on November 3, 2009. The yield based on the new payout is 7.38%

Universal Forest Products (UFPI) engineers, manufactures, treats, distributes and installs lumber, composite, plastic and other building products. October 19th the company bumped its quarterly dividend to to $0.20/share. The dividend is payable on December 15, 2009, to shareholders of record on December 1, 2009. The ex-dividend is November 27, 2009. The yield based on the new payout is 1.03%.

Stepan Co. (SCL) produces specialty and intermediate chemicals. October 20th the company increased its quarterly dividend 9.1% to $0.24/share. This dividend is payable December 15, 2009, to shareholders of record on November 30, 2009. The ex-dividend date is November 26, 2009. SCL is a Dividend Achiever and has increased its dividend for 42 consecutive years. The yield based on the new payout is 1.49%.

Shenandoah Telecom (SHEN) is a diversified telecommunications holding company. October 20th the company raised is dividend to $0.32/share. The dividend will be payable December 1, 2009, to shareholders of record on November 10, 2009. The ex-dividend date is November 6, 2009. SHEN is a Dividend Achiever. The yield based on the new payout is 1.89%.

Ecology and Environment (EEI) is an environmental consulting and testing firm. October 20th the company bumped to $0.21/share. The dividend is payable on or before December 30, 2009, to shareholders of record as of December 8, 2009. The ex-dividend is December 4, 2009. The yield based on the new payout is 2.66%.

Hanover Insurance Group (THG) is an insurance and financial services company. October 20th the company increased its annual dividend 67% to $0.75/share. The dividend is payable December 9, 2009, to shareholders of record at the close of business on November 25, 2009. The board also authorized a change in the company’s dividend payment schedule from a single annual cash dividend to quarterly dividend payments beginning in fiscal year 2010. The yield based on the new payout is 1.80%.

Artesian Resources (ARTNA) distributes and sells water, including water for public and private fire protection. October 20th the company increased its quarterly dividend 5% to $0.1873/share. The dividend is payable November 20, 2009 to shareholders of record at the close of business on November 10, 2009. The yield based on the new payout is 4.52%.

Visa (V) operates a retail electronic payments network. October 21st the company bumped its quarterly dividend by 19% to $0.125/share. The dividend is payable on December 1, 2009 to shareholders of record as of November 16, 2009. The ex-dividend date is November 12. The yield based on the new payout is 0.66%.

Brown & Brown (BRO) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization. October 21st the company increased its quarterly dividend by 3.3% to $0.0775/share. The dividend is payable on November 18, 2009, to shareholders of record on November 4, 2009. The ex-dividend date is November 2. BRO is a Dividend Achiever and has increased its dividend for 17 consecutive years. The yield based on the new payout is 1.66%.

Eaton Vance (EV) is engaged in managing investment funds and providing investment management and counseling services to high-net-worth individuals and institutions. October 21st the company raised its quarterly dividend 3% to $0.16/share. The dividend is payable on November 13, 2009 to shareholders of record on October 30, 2009. The ex-dividend date is November 11. EV is a Dividend Achiever and has increased its dividend for 29 consecutive years. The yield based on the new payout is 2.11%.

Peabody Energy (BTU) is a coal company. October 22nd the company bumped its quarterly dividend 17% to $0.07/share. The dividend is payable on Nov. 27, 2009, to shareholders of record on Nov. 5, 2009. The ex-dividend date is November 3. The yield based on the new payout is 0.64%.

Holly Energy (HEP) operates a system of refined product and crude oil pipelines, storage tanks and distribution terminals. October 22nd the company bumped its quarterly 1.3% to $0.795/unit. The distribution will be paid November 13, 2009, to unitholders of record November 2, 2009. The ex-dividend date is October 29. The yield based on the new payout is 7.93%.

Matthews Int’l (MATW) is a designer, manufacturer and marketer principally of memorialization products and brand solutions. October 22nd the company increased its quarterly dividend 7.7% to $0.07/share. The dividend payable November 16, 2009 to stockholders of record November 2, 2009. The ex-dividend date is October 29. The yield based on the new payout is 0.70%.

Real dividend growth investors are not looking for a flash in the pan, but instead for stocks that can deliver consistent dividend growth. For a list of 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.

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Dividend payout is expressed as a percentage and is calculated by dividing annual dividend per share by annual earnings per share (EPS). This tells the investor what percentage of earning the company is paying out as a dividend. At first blush this may seem to make a lot of sense, but it suffers from the following potential problems:

I. Earnings Does Not Equal Cash

As an accountant, I can tell you our profession in its pursuit of theoretical perfection has adulterated the financial statements to the point that it has become very difficult for non-accountants to understand what’s behind the numbers.  Accounting pronouncements such as SFAS No. 143 “Accounting for Asset Retirement Obligations” (ARO) that requires a company to recognize expenses today for cash payments that may not occur for decades or even centuries widens the gap between earnings and cash. Applying “fair value” principles allowed under GAAP, financial institutions (and others) can mark to market debt on their books and create non-cash income or expense, depending on the direction of interest rates. Many point to mark to market accounting as one of the major contributors to the 2008 financial melt-down.

II. Quality of Earnings

Would you rather a company that you are invested in to increase its earnings by 1.) increasing sales and holding cost down or 2.) sell a fully depreciated plant. Obviously, you would rather have the former since it has the possibility of being duplicated over and over again. You can only sell a specific asset once. In addition to cash and non-cash earnings, a statement of earnings also contains operating and non-operating earnings.

A Better Dividend Payout Calculation

A dividend payout ratio is supposed to provide the investor with an indication of how much cash as a percent of earnings the company is paying its investors. As you can see from the above discussion, a payout ratio based on GAAP net earnings could potentially have a lot of noise in it and not provide a clear picture of the economic condition of the business.

What the investor is really wanting to know is what percentage of cash is the company paying as a percentage of cash generated from running the business. The irony here is that operating cash is readily available on the Statement Of Cash Flows in the Operating section. This section focuses on the cash generated by running the business. It excludes cash generated by selling pieces of the business – these are shown in the investing section. It also excludes cash generated from selling stock or issuing debt – these are shown in the financing section.

In calculating a payout ratio, I prefer Free Cash Flow over Operating Cash Flow. Free Cash Flow is Operating Cash Flow less normal capital expenditures (normally the first line in the investing section). For a business to remain viable, it must replace capital assets when they wear out.

The formula for Free Cash Flow Payout is simply Annual Dividend Per Share divided by Free Cash Flow Per Share. I like to see a percentage of 70% or less. The 70% is somewhat higher than many people look for with a traditional payout ratio. I am comfortable with the higher number since we are talking about real cash generated from running the business vs. accounting earnings that may or may not be there. So how do the two ratios compare?

Needless to say, the variances are all over the place. In many companies I looked at the traditional dividend payout ratio was within 10 percentage points higher than a free cash flow payout. This means the GAAP earnings was lower than the calculated Free Cash Flow. Here are some example of this situation:

• Chubb Corp (CB) – Traditional: 28% – FCF Payout: 21% – Analysis
• Clorox Company (CLX) – Traditional: 50% – FCF Payout: 50%
• Emerson Electric Co. (EMR) – Traditional: 53% – FCF Payout: 45% – Analysis
• Family Dollar Stores Inc. (FDO) – Traditional: 25% – FCF Payout: 22%
• Hormel Foods Corp. (HRL) – Traditional: 34% – FCF Payout: 33%
• International Business Machines (IBM) – Traditional: 23% – FCF Payout: 18%
• 3M Co. (MMM) – Traditional: 50% – FCF Payout: 45% – Analysis
• Microsoft Corp. (MSFT) – Traditional: 32% – FCF Payout: 29%
• SYSCO Corporation (SYY) – Traditional: 52% – FCF Payout: 48% – Analysis
• United Technologies Corp. (UTX) – Traditional: 35% – FCF Payout: 30% – Analysis

Sometime the gap is much larger. This could have resulted from significant non-cash charges on the income statement.  Companies with large gaps include:

• Aflac Incorporated (AFL) – Traditional: 44% – FCF Payout: 10% – Analysis
• CenturyLink Inc. (CTL) – Traditional: 87% – FCF Payout: 46%
• Diebold Inc (DBD) – Traditional: 74% – FCF Payout: 30%
• Illinois ToolWorks Inc. (ITW) – Traditional: 76% – FCF Payout: 31% – Analysis
• Leggett & Platt Inc. (LEG) – Traditional: 262% – FCF Payout: 34% – Analysis
• Nucor Corporation (NUE) – Traditional: 88% – FCF Payout: 29% – Analysis
• Pitney Bowes Inc. (PBI) – Traditional: 73% – FCF Payout: 38%
• PPG Inds Inc (PPG) – Traditional: 158% – FCF Payout: 48%
• RLI Corp (RLI) – Traditional: 158% – FCF Payout: 48% – Analysis
• RPM International Inc (RPM) – Traditional: 84% – FCF Payout: 49% – Analysis
• AT&T Inc. (T) – Traditional: 81% – FCF Payout: 49%

Sometimes the gap is not only large, but goes the other way. This is potentially the most dangerous since focusing on the traditional dividend payout may lead you to believe the dividend is covered better than it actually is. Examples of this situation would include:

• Air Products and Chemicals Inc. (APD) – Traditional: 56% – FCF Payout: 172%
• Franklin Resources Inc. (BEN) – Traditional: 23% – FCF Payout: 48%
• BP Plc (BP) – Traditional: 50% – FCF Payout: 114% – Analysis
• Lowe’s Companies, Inc. (LOW) – Traditional: 27% – FCF Payout: 57% – Analysis
• Exxon Mobil Corp (XOM) – Traditional: 27% – FCF Payout: 54%

Although Free Cash Flow Payout is a better payout ratio than the traditional dividend ratio, the investor should look at both and understand the differences. Taking an expense for impairing goodwill is much different than recognizing an expense for losing a lawsuit. The former will not directly involve cash out the door, but the latter will if the company loses on appeal.

Full Disclosure: Long CLX, EMR, MMM, SYY, UTX, AFL, CTL, ITW, NUE, BP. See a list of all my income holdings here.

(Photo Credit)

A portion of my retirement planning includes dividend investing. One of the beauties of dividend investing is it provides you continuous feedback. As the years and decades go by you can see your earnings steadily grow as you invest your money in dividend stocks. Here are a few select companies that have recently provided their shareholders positive feedback by raising their cash dividends:

• Matthews Int’l (MATW) Boosts Qtr. Dividend by 1.5% to $0.065/Share (0.06%)
• VF Corp. (VFC) Boosts Qtr. Dividend 2% to $0.59/Share (4.32%)
• PPG Industries (PPG) Boosts Qtr Dividend 2% to $0.53/Share (4.20%)
• Goodrich (GR) Boosts Qtr. Dividend by 11% to $0.25/Share (2.71%)
• UMB Financial (UMBF) Boosts Qtr. Dividend by 6% to $0.175/Share (1.31%)
• Home BancShares (HOMB) Increases Qtr. Dividend 55% to $0.065/Share (1.31%)
• Stepan Company (SCL) Boosts Qtr. Dividend by 4.7% to $0.22/Share (2.25%)
• The Eastern Company (EML) Raises Qtr. Dividend by 12.5% to $0.09/Share (2.89%)

After running these companies through my D4L-PreScreen.xls model, VFC and PPG both had a positive NPV of MMA Differential, but fell short of the $3,000 I look for from a company that is a Dividend Aristocrat. None of the others achieved the necessary NPV of MMA Differential to justify a full evaluation.

Disclosure: No position in the aforementioned stocks.

(Photo: Steve Woods)