Have you ever pondered the concept of forever or infinity? It is truly mind boggling! What is even more astonishing is that when I buy a stock, my target holding period is forever. For most people, myself included, that is hard to grasp and to carry out. When things start going bad, our primal instinct of flight kicks in and we want to sell. In many cases that is the time to be buying. Owning companies that systematically raise their dividends each and every year makes it much easier to hold them through the tough times.

Below are several select companies that recently made their shareholders smile by raising their cash dividends:

  • ProLogis (PLD) Raises Qtr. Dividend 10% to $0.57/Share (5.27% yield)
  • Methode Electronics (MEI) Boosts Qtr. Dividend 40% to $0.07/Share (2.98% yield)
  • Texas Instruments (TXN) Bumps Dividend 10% to $0.11/Share (1.94% yield)
  • Microsoft (MSFT) Raises Qtr. Dividend 18% to $0.13/Share (2.00% yield)
  • Atlantic Tele-Network (ATNI) Boosts Qtr. Dividend 12.5% to $0.18/Share (1.22% yield)
After running these companies through my D4L-PreScreen.xls model, PLD with a NPV of MMA Differential of $5,957 showed me enough that it is worthy of a full evaluation. MSFT is one to keep an eye on. It paid its first dividend in 2003 and has double-digit growth rate since then. None of the others achieved the necessary NPV of MMA Differential to justify a full evaluation.


Disclosure: No position in any of the aforementioned stocks.

(Photo: Steve Woods)


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5 comments

  1. sirbeef // September 29, 2008 at 6:46 PM

    Weee! Two percent.

  2. Dividend Growth Investor // September 30, 2008 at 10:45 AM

    If MSFT keeps raising the dividends as fast as it has over the past 3-4 years I wouldn't be surprised if the yield on cost in a decade hits 8 - 10%..

  3. Dividends4Life // September 30, 2008 at 1:13 PM

    sirbeef: Don't look at the 2%, look at the 18% - long-term that is the important number.

    DGI: I am actually taking a hard look at MSFT. My problem is my models were not designed to analyze a company that has paid a dividend less than 10 years.

    Best Wishes,
    D4L

  4. Anonymous // October 26, 2008 at 11:40 PM

    DGI/DFL:

    that's really shockingly sloppy. you base your projections for growth, not even upon the historical div growth rate (8%)- which is an overestimate for forward growth the vast majority of the time, but from a SINGLE INCREASE??

  5. Dividends4Life // October 27, 2008 at 6:22 AM

    Anon: No. In my analysis I use the lower of the 1, 3, 5 or 10 year compound annual growth rate. The above statements are for effect - if you are going to focus on a single number it should be growth rate not yield.

    Best Wishes
    D4L

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