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.

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(Photo Credit)

Dividend Aristocrats: Companies in the S&P 500 that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years. As the name denotes, these are the best of the best – the blue blood stocks, including names like:

- Clorox Co (CLX) | Yield: 3.30%
- Coca-Cola Co (KO) | Yield: 2.90% | Analysis
- Emerson Electric (EMR)| Yield: 2.80% | Analysis
- Exxon Mobil (XOM)| Yield: 2.60%
- Johnson & Johnson (JNJ)| Yield: 3.10% | Analysis
- McDonald’s Corp (MCD)| Yield: 3.40% | Analysis
- Procter & Gamble (PG)| Yield: 2.80% | Analysis
- Wal-Mart Stores (WMT) | Yield: 2.00% | Analysis

US Broad Dividend Achievers: Is comprised of companies incorporated in the United States or its territories, trade on the NYSE, NASDAQ or AMEX, and have increased their annual regular dividend payments for the last ten or more consecutive years. Notable names on this list include:

- Chevron Corporation (CVX) | Yield: 3.70%
- Donaldson Company (DCI) | Yield: 1.10%
- McCormick & Co. (MKC) | Yield: 2.80%
- Nucor Corp. (NUE) | Yield: 3.20% | Analysis
- Raven Industries, Inc. (RAVN) | Yield: 1.90% | Analysis

The U.S. Dividend Champions: Is maintained by Dave Fish of MoneyPaper. The list is updated monthly and located at the The Drip Investing Resource Center. Like the Dividend Aristocrats above the Dividend Champions list looks for companies that have increased their dividend for at least 25 consecutive years. However, since S&P 500 membership is not a requirement, the list is larger than the Dividend Aristocrats list and also includes small-cap companies.

- Bowl America (BWL.A) | Yield: 4.50%
- Conn. Water Service (CTWS) | Yield: 4.00%
- Weyco Group Inc. (WEYS) | Yield: 2.70%

Needless to say, last year saw many companies fall off the list. Overall the number of constituents fell to 218 stocks in 2010 from 319 in 2009. What made last year so unusual were the number of big-name companies that no longer qualified for inclusion on the list, some that had paid increasing dividends for decades, including:

- American International Group, Inc. (AIG)
– Bank of America Corporation (BAC)
– General Electric Co. (GE)
- The Home Depot, Inc. (HD)
- Johnson Controls Inc. (JCI)
- Pfizer Inc. (PFE)
- US Bancorp (USB)

The news wasn’t all bad. Partially offsetting the 133 companies that fell off the list were 32 new companies joining the Dividend Stock Ideas List. For the most part, these aren’t household names, not yet at least, but here are some names we will likely be seeing in the future:

- Arrow Financial Corporation (AROW) | Yield: 3.90%
- Energy Transfer Partners L.P. (ETP) | Yield: 7.80%
- Federated Investors, Inc. (FII) | Yield: 3.70%
- Getty Realty Corp. (GTY) | Yield: 8.50%
- Hudson City Bancorp, Inc. (HCBK) | Yield: 4.60%
- Investors Real Estate Trust (IRET) | Yield: 7.80%
- NSTAR (NST) | Yield: 4.60%
- Northeast Utilities (NU) | Yield: 3.80%
- Plains All American Pipeline LP (PAA) | Yield: 6.80%
- Suburban Propane Partners LP (SPH) | Yield: 7.30%

You can see the entire Dividend Stock Idea List here. Remember, not every stock listed here is a great dividend investment, but virtually all great dividend investments are on this list.

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

(Photo Credit)

Dividend Aristocrats constituents exhibit the following characteristics:

• Underlying Indices – S&P 500
• Weighting – Equally weighted; Constituents re-weighted quarterly
• Reconstitution – Reviewed annually in December

Among others, Dividend Aristocrats include these highly recognizable names, with years of consecutive dividend increases shown:

• Clorox Co (CLX) – 32 years
• Coca-Cola Co (KO) – 47 years – [Analysis]
• Exxon (XOM) – 27 years
• Johnson & Johnson (JNJ) – 47 years – [Analysis]
• McDonald’s Corp (MCD) – 33 years – [Analysis]
• Procter & Gamble (PG) – 53 years – [Analysis]
• Wal-Mart Stores (WMT) -35 years – [Analysis]

Members may be deleted during the December rebalance if calendar-year dividends did not increase from the previous year, or intra-year if the stock is removed from the underlying S&P 500.

On December 4th, S&P announced changes to the Dividend Aristocrats Index. Standard & Poor’s will perform the annual reconstitution of the S&P 500 Dividend Aristocrats Index after the close of trading on Friday, December 18, 2009.

The following stocks will be added to the Dividend Aristocrats:

• Brown-Forman Corporation (BF.B)
• Cintas Corp. (CTAS)

The following stocks will be dropped from the Dividend Aristocrats:

• Avery Dennison Corporation (AVY)
• BB&T Corp. (BBT)
• Gannett Co., Inc. (GCI)
• General Electric Co. (GE)
• Johnson Controls Inc. (JCI)
• Legg Mason Inc. (LM)
• M&T Bank Corp. (MTB)
• Pfizer Inc. (PFE)
• State Street Corp. (STT)
• US Bancorp (USB)

As the number of drops vs. adds indicates, the last two years were difficult for dividend stocks, but that is not necessarily a bad thing.  During good times it is easy for companies to increase dividends, and many companies were added to the index. It is during times of adversity that we learn who the real aristocrats are.

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

(Photo Credit)

Recently, Daniel Gross in a Newsweek article stated, “The Great Recession, which rolled over our financial lives like one of P.J. Keating’s giant pavers, is most likely over.” He went on to make the following observations in the article:

• The U.S. economy shrank at nearly a 6 percent annualized rate between September 2008 and March 2009, placing the global economy into recession for the first time since World War II.
• Home sales have risen for three straight months—a first since 2004.
• The stock market has rallied 44 percent since March.
• Seven of the 10 indicators in the Conference Board Leading Economic Index pointed upward.
• When economists proclaim a recession over, they mean economic output has stopped contracting.
• The U.S. economy needs annual growth of at least 1.5 percent just to feel like we’re standing still.
• Unemployment is likely to keep climbing.
• “I see 1 percent growth in the economy in the next few years. It’s going to feel like a recession, even when it ends.” stated New York University economist Nouriel Roubini
• The Obama administration’s strategy rests on what some might call industrial policy or excessive government intervention—or even creeping socialism.

Not surprising, a lot of the hardest hit stocks have seen the largest increase off their 52 week low. Based on August 4, 2009 prices, these would include: General Electric (GE) 141%, U.S. Bank (USB) 169%, Manulife Financial Corp. (MFC) 249%, AFLAC Inc. (AFL) 268%,  Bank of America (BAC) 518%.

Not all dividend stocks have fully enjoyed the recent run up.  Some are still relatively close to their 52 week low and are fairly valued based on my buy price. Based on August 4, 2009 prices, here are some to consider:

• Procter & Gamble Co. (PG) – 26% – Recent Price: $55 – Fair Value: $65.98 – Analysis
• Sysco Corp. (SYY) – 26% – Recent Price: $24 – Fair Value: $27.56 – Analysis
• Automatic Data Processing Inc. (ADP) – 23% – Recent Price: $38 – Fair Value: $40.86 – Analysis
• McDonald’s Corp. (MCD) – 20% – Recent Price: $55 – Fair Value: $67.86 – Analysis
• Wal-Mart Stores, Inc. (WMT) – 8% – Recent Price: $50 – Fair Value: $56.19 – Analysis

I look at a market recovery as a bitter-sweet event. For a dividend investor, buying stocks at a highly depressed price is a Godsend, but for the market to remain healthy and liquid, it must eventually rise.

Full Disclosure: Long MFC, AFL, PG, SYY, MCD, WMT. See a list of all my income holdings here.

Comparing Berkshire Hathaway’s (BRK.A) December 31, 2008 13-F with its March 31, 2009 13-F, I made the following observations for Q1/2009:

• BRK didn’t add any new positions to its portfolio
• BRK didn’t fully liquidate any positions in its portfolio
• BRK added shares in seven stocks: BNSF Railway (BNI), Union Pacific (UNP), Wells Fargo (WFC), U.S. Bancorp (USB), Johnson & Johnson (JNJ), and Nalco Holding Company (NLC)
• BRK reduced shares in four stocks: CarMax (KMX), ConocoPhillips (COP), Costco Wholesale Corporation (COST) and Constellation Energy Group, Inc. (CEG)

Of the stocks held in BRK’s 13-F portfolio, the following ones are either held in my income portfolio or are on my watch list of dividend stocks:

Coca Cola (KO) – Yield 3.34% – Analysis
The Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world.

Johnson & Johnson (JNJ) – Yield 3.55% – Analysis
Johnson & Johnson is engaged in the research and development, manufacture and sale of a range of products in the healthcare field.

Kraft Foods (KFT) – Yield 4.44% – Analysis
Kraft is engaged in manufacturing and marketing packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products.

Lowes Companies (LOW) – Yield 1.89% – Analysis
Lowe’s Companies, Inc. is a home improvement retailer.

M&T Bank (MTB) – Yield 5.57%
M&T Bank Corporation is a bank holding company. As of December 31, 2008, the Company had two wholly owned bank subsidiaries.

Procter & Gamble Co. (PG) – Yield 3.39% – Analysis
The Procter & Gamble Company is focused on providing branded consumer goods.

Wal-Mart Stores, Inc.  (WMT) – Yield 2.19% – Analysis
Wal-Mart Stores, Inc. operates retail stores in various formats worldwide.

In addition, Buffett continues to hold a position in several stocks that I sold over the last twelve months for either cutting or failing to raise their dividend. Those are:

Bank of America Corporation (BAC) – Yield 0.35%
Bank of America Corporation (Bank of America) is a bank holding company and a financial holding company.

General Electric (GE) – Yield 9.20%
General Electric Company is a diversified technology, media and financial services company.

The Home Depot, Inc. (HD) – Yield 3.89%
The Home Depot, Inc.is a home improvement retailer selling an assortment of building materials, home improvement and lawn and garden products, and provide a number of services.

SunTrust Banks, Inc. (STI) – Yield 3.04%
SunTrust Banks, Inc. is a diversified financial services holding company whose businesses provide a range of financial services to consumer and corporate clients.

U.S. Bancorp (USB) – Yield 1.04%
U.S. Bancorp operates as a financial holding company and a bank holding company. U.S. Bancorp provides a range of financial services, including lending and depository services, cash management, foreign exchange, and trust and investment management services.

It is not surprising that the most famous value investor holds several dividend stocks. Historically, stocks that pay dividends have out-performed those that don’t. When you buy dividend stocks at a discount, it’s like turbo-charging your return!

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

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.

~

The “%” column is the percentage decrease between the “Sell Price” and “Recent Price”.  As you can see, each of the stocks continued to fall after it was sold. That adds substantive evidence that my sell after a dividend cut rule is the correct thing to do. With that said, I have begun to question if there were other indicators that should have led me to an earlier sale. Four of the above stocks have one other thing in common – they froze their dividend before cutting it. The table below shows those stocks and the price on the dividend freeze date (declaration date), along with the three stocks I currently hold with a frozen dividend:

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The “Freeze Price” is the closing price the first trading day after the dividend freeze was announced. The “Sell Price” for the first four (those that I have already sold), is the actual price I sold it for and for the three I still hold it is a recent price. Based on the above, it appears the prudent thing to do would be to sell a stock after it freezes its dividend. Like a dividend cut, an investment with a froze dividend is no longer aligned with my dividend portfolio’s goal of building an ever-increasing source of dividend income.

Care should be taken in considering that not only have the above stocks fell over the last year or so, but virtually every other stock has fell. So what appears to be hard and fast rules in this market, will need to be evaluated under different phases of the cycle. But for now, selling after a dividend cut or a dividend freeze appears to be a prudent rule to follow. However, I do not see the dividend freeze rule as stringent as the dividend cut rule. Each situation needs to be evaluated and sometimes an immediate sale is not warranted. Considering all this, I would phrase my dividend rule as such:

When an individual stock held as a dividend investment freezes its dividend, this is a strong sell indicator. The specific facts and circumstances should be immediately evaluated and continuously monitored until the stock is either sold or it increases its dividend.

If it is decided not to sell the stock, the pressure to sell should increase as time passes.  Another strong indicator to sell would be if the dividend freeze persists long enough to incur a flat dividend year-over-year. Dividend freezes need to be monitored closely. In many instances they are the first step to a dividend cut.

Full Disclosure: Long HD, MTB, RY

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)

The Good

As you might guess, these dividend stocks that are doing exactly what they should do – consistently raising their dividends each year in spite of troubled economic times. Some of these companies are in sectors that are less affected by the economic downturn, but they have one thing in common, they are well-managed by executives that understand the importance of growing the companies dividends. Here are some examples of these companies:

• Johnson & Johnson (JNJ) in May 2008 increased its quarterly dividend 10.8% to $0.46/share
• Kimberly-Clark Corporation (KMB) in March 2008 increased its quarterly dividend 9.4% to $0.58/share
• McDonald’s Corp. (MCD) in November 2008 increased its quarterly dividend 35.1% to $0.50/share
• Pepsico, Inc. (PEP) in June 2008 increased its quarterly dividend 13.3% to $0.425/share
• Procter & Gamble Co. (PG) in April 2008 increased its quarterly dividend 14.3% to $0.40/share
• Wal-Mart Stores Inc. (WMT) in April 2008 increased its quarterly dividend 8.2% to $0.238/share

The Bad

Companies that held their dividends flat. Dividend investors are keying on companies that can consistently raise their dividends year after year. Sometimes a company can’t do this this. Instead of cutting the dividend, they hold it flat and try to weather the economic storm. This may not always be a bad thing, because it shows that management understands the importance of maintaining its dividend. Many dividend investors, myself include, may overlook a single flat year. Here are several companies that missed their last dividend increase:

• General Electric Co. (GE) last raised its dividend December 2007
• The Home Depot, Inc (HD) last raised its dividend November 2006
• Pfizer Inc. (PFE) last raised its dividend November 2007
• US Bancorp (USB) last raised its dividend December 2007

Each of the above stocks has been classified as On The Shelf. That means they will be set aside within my income portfolio with no additional purchases made until its outlook improves or deteriorates to the point it should be sold. As I was writing this article, PFE announced Monday that it was going to slash its second quarter dividend 50%. I immediately sold the stock after its dividend cut.

The Ugly

Companies that cut their dividends. Fourth quarter 2008 was the worst period for dividend cuts since 1956 when Standard & Poor’s started keeping records. Unfortunately, the carnage may not be over. UBS Securities strategist Thomas Doerflinger estimates that S&P 500 dividends per share will drop an additional 8% in 2009. That would be the largest decline since the Great Depression and only the eighth time since 1942 that dividends fell in consecutive years. Here are several companies that contributed to the 2008 decline:

• Bank of America Corporation (BAC) first dropped its dividend in December 2008
• Fifth Third Bancorp (FITB) first dropped its dividend in June 2008
• KeyCorp (KEY) first dropped its dividend in August 2008
• Regions Financial Corp. (RF) first dropped its dividend in September 2008

Long-term, the best companies to add to our dividend portfolios are those that will continue raising their dividends even during economic downturns. These stocks tend to have conservative payouts less than 50%, which allows them to maintain their dividends during the tough times. They also have growing sales and earnings – you can’t continue to pay higher dividends unless you have the earnings to back it up.

Full Disclosure: Long JNJ, KMB, MCD, PEP, PG, WMT, GE, HD, USB

In a report issued last Friday, the Congressional Budget Office (CBO) concluded that the Treasury lost more than 25% of the $247 billion it spent as of Dec. 31 bailing out banks, according to a report released on Friday.

The CBO used a modified Black-Scholes option pricing model to value the TARP assets. The calculation was based on the present value of the dividends banks are required to pay taxpayers on the warrants issued in exchange for the funds received. The present value of the warrants was only $183 billion at December 31st, resulting in the Treasury providing a “subsidy” to the banks of $64 billion.

Terms of the TARP agreement require banks to pay back 5% annually in dividends for the first five years, and 9% after that if taxpayers haven’t been repaid. The warrants expire in 10 years. Last Thursday, Lawrence Summers, President-elect Barack Obama’s chief economic advisor, promised that the incoming administration would take steps to improve returns on TARP funds for taxpayers, in part by limiting dividend payouts to shareholders.

Prominent financial companies participating in TARP include:

• American Express Company (AXP)
• Bank of America Corporation (BAC)
• BB&T Corp. (BBT)
• U.S. Bancorp (USB)
• Wells Fargo & Co. (WFC)

Some institutions, such as Bank of America, have returned to the trough to feed again off TARP funds. As dividend investors, we must carefully consider whether or not banks participating in the TARP program should be included in our income portfolios.

Full Disclosure: Long BBT, USB