It is very easy for a CEO to get on a conference call and talk about confidence in the future while communicating glowing projections, but do they really believe what they are saying? Are there any actions that would make you believe what they are saying? Senior management purchasing company stock is a strong indicator of confidence in the future. Another indicator is sticking with a dividend plan, including regular increases. Below are several select companies that recently announced dividend increases:

• Union Pacific (UNP) Boosts Dividend 23% to $0.27/Share
  
• Murphy Oil (MUR) Boosts Qtr. Dividend 32% to $0.25/Share
• Walter Industries (WLT) Doubles Qtr. Dividend to $0.10/Share
• Molex (MOLX) Raises Qtr. Dividend 36% to $0.1525/Share
• Carlisle Companies (CSL) Boosts Qtr. Dividend 10% to $0.155/Share
  
• Graham Corporation (GHM) Raises Dividend 33% to $0.08/Share (split adj.)
  
• Harleysville Group (HGIC) Raises Qtr. Dividend 20% to $0.30/Share
• Olympic Steel (ZEUS) Declares Lifts Qtr Dividend 25% to $0.05/Share
  

After running these companies through my D4L-PreScreen.xls model, none of them warranted additional consideration based on their NPV of MMA Differential. HGIC was the closet with a NPV of MMA Differential of $1,759, well short of the $7,500 I require from a company such as it.

MOLX was an interesting stock. It has aggressively grew its dividends since 2004 when it paid $0.10/share to a 2008 estimate of $0.54/share. Unfortunately, from 2001-2004 the dividend was flat at $0.10. There are too many good stocks out there to spend any more time on this one.

Disclosure: No position in any of the aforementioned stocks.

(Photo: sanja gjenero)


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