High-Yield Dividend Growth Stock You Likely Haven’t Considered. Usually, investors have to choose between income stocks and growth stocks. If you pick a stock that offers a yield much higher than the vast majority of its peers, chances are it won’t offer much in terms of growth...
And that, my dear reader, is what makes Delek Logistics Partners LP (NYSE:DKL) special. DKL stock is one of the few double-digit yielders trading in today’s market. And yet its payout keeps on growing. Delek Logistics Partners LP is a master limited partnership (MLP) headquartered in Brentwood, Tennessee. It was created in 2012 by Delek US Holdings Inc (NYSE:DK) to own, operate, acquire, and construct crude oil and refined products logistics and marketing assets.
Source: Income Investors
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Cash truly is king. That’s especially true when looking at dividend stocks. Perhaps nothing matters more to dividend stocks than cash flows and balance sheet health. These two factors are probably the two biggest determinants of whether a firm can significantly grow their payout down the line. Or more importantly, keep a high-yield going. After all, you can “fake” earnings-per-share with accounting tricks, but you can’t fake how much money a firm has in the bank. So, it stands to reason, that investors looking for big-time dividends, should focus not on just initial yield, but on a firm’s cash/cash flows. But what dividend stocks are truly “cash rich” and have plenty of Franklin’s in cash flows and hoarded away on their balance sheets? Here are five that fit the bill perfectly.
The biotech sector isn’t normally someplace investors go to find dividend stocks. However, when you’re one of the first biotech’s to have major blockbusters under your belt, you can’t help but generate billions in cash flows. And that’s just the case with Amgen, Inc. (NASDAQ:AMGN). Satya Nadella could end up being the most important person in Microsoft Corporation’s (NASDAQ:MSFT) history besides Bill Gates. Nadella was responsible for sparking the recent renaissance at Mr. Softy and took the software company to the cloud. When it comes to dividend stocks, it’s good to be the king. And downstream player Valero Energy Corporation (NYSE:VLO) just happens to wear the crown. I know what you’re thinking. A 0.70% dividend? I came here for dividend stocks, not a token payout. But that small yield at Visa Inc (NYSE:V) is truly masking one of the market’s best dividend growth stories around. When looking for dividend stocks with big cash flows and balances, the best plays often have little to no overhead or capital spending. With that idea in mind, there’s a reason why Warren Buffett owns shares of Moody’s Corporation (NYSE:MCO).
Source: InvestorPlace
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Just because you're retired doesn't mean you have to settle for a fully defensive position for your portfolio. After all, many retirements can stretch happily on for decades. And that sort of time frame creates room for growth-focused equities in addition to the traditional, income-heavy investments.
Below, Motley Fool investors put the spotlight on a few attractive stocks, Sherwin Williams (NYSE:SHW), Thermo Fisher Scientific (NYSE:TMO), and Welltower (NYSE:HCN), that they think offer that rare balance between growth and income that can keep your nest egg growing deep into your retirement years.
Source: Motley Fool
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Dividend-paying companies can help grow your portfolio income through their sizeable dividend payouts. Great dividend payers create a safe bet to increase investors’ portfolio value as payouts provide steady income and cushion against market risks Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Today I will share with you my best paying dividend shares you should be considering for your portfolio.
Rogers Communications Inc. (TSX:RCI.B) operates as a communications and media company in Canada. Started in 1920, and run by CEO Joseph Natale, the company now has 25,200 employees. The Toronto-Dominion Bank (TSX:TD) provides various personal and commercial banking products and services in Canada and the United States. Royal Bank of Canada (TSX:RY) operates as a diversified financial service company worldwide. Founded in 1864, and currently lead by David McKay, the company employs 78,210 people.
Source: Simply Wall St.
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1.) An abrupt or permanent shift in a company’s business model as a result of business conditions.
2.) A dividend yield that is higher than average and/or higher than others in the industry.
3.) Diminishing cash available to pay dividends.
Ultimately, the ability of a company to pay its dividend is determined by its cash position – both cash on its balance sheet and its ability to generate cash flow. Below are several companies that are NOT cutting their dividends, but instead raising them:
Read More... Read More...
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When looking at payout ratios, I prefer using a free cash flow payout instead of the traditional dividend payout based on GAAP earnings, which contains a lot of non-cash "noise." Some sectors, such as consumer staples and pharmaceuticals, are expected to do well during a downturn. For example, stocks such as Kimberly Clark Corp (KMB) and Abbott Laboratories (ABT) that sell products less dependent on economic conditions were able to grow both earnings and free cash flow between 2007 and 2009. What about industrials and other cyclical stocks whose results are tied to the economy?
One sign of a great management team is the ability to increase free cash flow when earnings are falling. Below are some companies that accomplished this feat over the last couple of years:
Commerce Bancshares (CBSH) | Yield: 2.20%
- Earnings (2007/2009): $2.56/$2.07
- Free Cash Flow (2007/2009): $3.68/$5.74
- Years of Consecutive Dividend Increases: 42
Emerson Electric Co. (EMR) | Analysis | Yield: 2.24%
- Earnings (2007/2009): $2.66/$2.27
- Free Cash Flow (2007/2009): $2.90/$3.37
- Years of Consecutive Dividend Increases: 53
Lowe's Companies, Inc. (LOW) | Analysis | Yield: 1.40%
- Earnings (2007/2009): $1.99/$1.49
- Free Cash Flow (2007/2009): $0.38/$0.58
- Years of Consecutive Dividend Increases: 47
3M Co. (MMM) | Yield: 2.50%
- Earnings (2007/2009): $5.06/$4.89
- Free Cash Flow (2007/2009): $3.51/$4.33
- Years of Consecutive Dividend Increases: 51
The ability of a company to grow its dividend throughout the economic cycle is highly dependent on the management's ability to generate cash in a downturn. This doesn't just happen. Management must be proactive and guide the company down a path that it otherwise would not go. Working capital must be a focus with inventories lowered, receivables aggressively pursued and payables stretched out to their maximum term. Another focus is deferring replacement capital without jeopardizing safety and long-term viability. It is all a delicate balancing act, requiring intimate knowledge of the company.
Often running a business for cash is detrimental to short-term GAAP earnings. For example, when when you produce less inventory than you are selling, you experience lower fixed cost absorption which increases current expenses, but also increases cash flow. Smart analysts understand this and focus on cash, not GAAP earnings.
Full Disclosure: Long ABT, EMR, KMB, MMM See a list of all my income holdings here.
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Entergy Corp. (ETR) is an electric utility holding company serves 2.6 million customers in Arkansas, Louisiana, Mississippi and Texas. April 5th the company increased its quarterly dividend to $0.83/share. The dividend is payable June 1 to stockholders of record on May 12, reflecting the first increase in its quarterly common stock dividend since July 2007. The ex-dividend date is May 10, 2010. Yield on the dividend is 4%. The yield based on the new payout is 4.04%. Bank of the Ozarks (OZRK) provides retail & commercial banking products and services via 70 banking and two loan production offices in AR, TX, NC. April 6th the company raised its quarterly dividend 7% to $0.15/share. The dividend is payable April 23, 2010 to shareholders of record as of April 16, 2010. The ex-dividend date is April 14, 2010. OZRK is a Dividend Achiever and has raised its dividend for 11 consecutive years. The yield based on the new payout is 1.62%. TJX (TJX) operates eight chains of off-price apparel and home fashion specialty stores in the U.S., Canada, Germany, Ireland and the U.K. April 6th the company increased its quarterly dividend 25% to $0.15/share. TJX is a Dividend Achiever and has raised its dividend for 11 consecutive years. The yield based on the new payout is 1.34%. IDEX (IEX) designs, makes and markets a broad range of pump products, dispensing equipment and other engineered products, serving a diverse customer base worldwide. April 6th the company increased its quarterly dividend 25% to $0.15/share. The dividend is payable on April 30 to shareholders of record on April 15. The ex-dividend date is April 13. The yield based on the new payout is 1.79%. Tanger Factory Outlet (SKT) is a real estate investment trust develops, acquires, owns, operates and manages factory outlet shopping centers in the United States. April 8th the company raised its quarterly dividend to $0.3875/share. The dividend will be payable on May 14, 2010 to holders of record on April 30, 2010. The ex-dividend date is April 28, 2010. Yield on the dividend is 3.6%. SKT is a Dividend Achiever and has raised its dividend for 17 consecutive years. The yield based on the new payout is 3.55%. In addition to the above dividend raisers, two Dividend Achievers declared regular quarterly cash dividends. April 6th RPM International (RPM) declared a quarterly dividend of $0.205/share with a 3.70% yield. The dividend is payable on April 30, 2010 to stockholders of record as of April 16, 2010. The ex-dividend date is April 14, 2010. Also, Murphy Oil (MUR) on April 7th declared a quarterly dividend of $0.25/share with a 1.70% yield. The dividend is payable June 1, 2010 to holders of record May 14, 2010. The ex-dividend date is May 12, 2010. To provide superior long-term returns a companies need to increase their dividends on a consistent basis. 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.
Recently, the following companies announced increased cash dividends:
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Yield does not come without a price. The five options looked at in prior weeks carry some form of added risk and/or complexity. Ultimately, dividend growth investors realize that long-term and sustainable high-yield investments are grown over time. This is accomplished by purchasing high-quality dividend investments with a reasonable yield and a long history of growing their dividends, and waiting for the yield on cost to grow. Consider the following stocks:
Sysco Corp. (SYY)
- Current Yield: 3.36%
- Assumed Dividend Growth Rate: 6.52%
- Yield On Cost in 10 Years: 6.32%
- Yield On Cost in 20 Years: 11.89%
Coca Cola Co. (KO)
- Current Yield: 3.22%
- Assumed Dividend Growth Rate: 7.32%
- Yield On Cost in 10 Years: 6.53%
- Yield On Cost in 20 Years: 13.22%
Abbott Labs (ABT)
- Current Yield: 3.25%
- Assumed Dividend Growth Rate: 8.27%
- Yield On Cost in 10 Years: 7.20%
- Yield On Cost in 20 Years: 15.93%
Raven Industries Inc. (RAVN)
- Current Yield: 1.85%
- Assumed Dividend Growth Rate: 15.00%
- Yield On Cost in 10 Years: 7.49%
- Yield On Cost in 20 Years: 30.31%
Kimberly Clark Corp. (KMB)
- Current Yield: 4.20%
- Assumed Dividend Growth Rate: 6.67%
- Yield On Cost in 10 Years: 8.02%
- Yield On Cost in 20 Years: 15.30%
United Technologies Corp. (UTX)
- Current Yield: 2.09%
- Assumed Dividend Growth Rate: 15.00%
- Yield On Cost in 10 Years: 8.46%
- Yield On Cost in 20 Years: 34.24%
Harleysville Group Inc (HGIC)
- Current Yield: 4.09%
- Assumed Dividend Growth Rate: 8.00%
- Yield On Cost in 10 Years: 8.83%
- Yield On Cost in 20 Years: 19.07%
Cardinal Health Inc (CAH)
- Current Yield: 1.98%
- Assumed Dividend Growth Rate: 15.00%
- Yield On Cost in 10 Years: 8.00%
- Yield On Cost in 20 Years: 32.34%
Nucor Corp. (NUE)
- Current Yield: 3.15%
- Assumed Dividend Growth Rate: 15.00%
- Yield On Cost in 10 Years: 12.76%
- Yield On Cost in 20 Years: 51.60%
McDonalds Corp. (MCD)
- Current Yield: 3.27%
- Assumed Dividend Growth Rate: 15.00%
- Yield On Cost in 10 Years: 13.23%
- Yield On Cost in 20 Years: 53.53%
The growth rates rates used above are the minimum of the compound annual dividend growth rate for the last 1, 3, 5, 7, 10 years or 15% if dividends grew on average in excess of 15% for each consecutive 4 year period, within the last 10 years. The growth rates are for illustrative purposes only. Obviously, no one can definitively say what any stock's future dividend growth rate will be. However, there were dividend growth superstars over the past 10-years and, needless to say, there will be several in the next 10 years.
Below are links to the other five options to increase the yield in our income portfolio:
1. Increasing Dividend Yield Part I: Utilities
2. Increasing Dividend Yield Part II: REITs
3. Increasing Dividend Yield Part III: Preferred Stock
4. Increasing Dividend Yield Part IV: Bonds
5. Increasing Dividend Yield Part V: MLPs
Full Disclosure: Long SYY, KO, ABT, KMB, UTX, HGIC, NUE, MCD. See a list of all my income holdings here.(Photo Credit)
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Recently, the following companies announced increased cash dividends:
Brinker (EAT) operates or franchises over 1,700 casual dining restaurants, including more than 1,500 Chili's, and owns a minority interest in Romano's Macaroni Grill. March 26th the company increased its quarterly dividend 27% to $0.14/share. The yield based on the new payout is 2.95%.
Todd Shipyards (TOD) a shipyard and dry dock facilities in the Pacific Northwest. March 29th the company raised its quarterly dividend to $0.075/share. The dividend is payable June 23, 2010 to all shareholders of record as of June 8, 2010. The yield based on the new payout is 1.83%.
Wayne Savings (WAYN) is the holding company for two bank subsidiaries that operate banking offices in Ohio. March 29th the company increases its quarterly dividend 20% to $0.06/share. The dividend is payable on April 28, 2010 to stockholders of record as of April 14, 2010. The ex-dividend date is April 12, 2010. The yield based on the new payout is 2.84%.
Oxford Industries (OXM) produces branded and private label apparel for men, women, and children. March 30th the company raised its quarterly dividend 22% to $0.11/share. The dividend is payable on April 30, 2010 to shareholders of record as of the close of business on April 15, 2010. The ex-dividend date is April 13, 2010. The yield based on the new payout is 2.16%.
In addition to the above dividend raisers, two Dividend Achiever declared regular quarterly cash dividends. March 26th AT&T (T) declared a quarterly dividend of $0.42/share with a 6.50% yield [Analysis]. The dividend is payable on May 3, 2010, to stockholders of record at the close of business on April 9, 2010. Also, McCormick & Company (MKC) on March 31st declared a quarterly dividend of $0.26/share with a 2.70% yield. The dividend is payable April 26, 2010, to shareholders of record on April 12, 2010. The ex-dividend date is April 8, 2010.
It is a cute trick to turn one dollar into five, but great dividend stocks grow their payout on a consistent basis. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: Long T. See a list of all my income holdings here.
(Photo Credit)
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A MLP is by far the most unique investment we will look at in this series. It combines the tax benefits of a limited partnership with the liquidity of common stock. MLPs are a product of the U.S. Tax Reform Act of 1986 and the U.S. Revenue Act of 1987. These laws define which companies are eligible to structure their operations as MLPs. To qualify, a firm must earn 90% of its income through activities or interest and dividend payments relating to natural resources, such as petroleum and natural gas extraction and transportation. Certain real estate operations may also qualify as MLPs.
Like other limited partnerships, MLPs pay no income tax, instead the liability is passed to the unit holders (MLPs' name for shareholders). Instead of dividends, MLPs pay quarterly required distributions (QRD), based on the stated amount in the contract between the unit holders and the general partner. These distributions are not taxed when they are received. They are treated as a return of capital, thus reducing the cost basis of the investment. MLPs are extremely tax efficient.
However, this tax efficiency comes with a price. Once a year, each investor receives a K-1 statement providing details of the unit holder's share of the partnership's net income. K-1s can be quite large (I've had some up 30-40 pages) and complex for those without a tax background. Unit holders will record items such as their pro-rata share of the MLP's depreciation, state taxes, etc. on their individual tax form. In addition to the tax burden, MLPs require more bookkeeping to track their basis. Each year the share basis is adjusted down by the amount of cash distributions and also adjusted by the unit holders allocation of net income. Below are some MLPs that have a history of increasing their unit distributions each year:
Enterprise Products Partners LP (EPD) - Yield: 6.60%
EPD is an integrated provider of natural gas and natural gas liquids services, including processing, fractionation, storage, transportation and terminalling. Years of distribution growth: 11
TC PipeLines LP (TCLP) - Yield: 7.80%
TCLP has interests in three interstate natural gas pipelines, including a 46.5% stake in Great Lakes Gas Transmission LP. Years of distribution growth: 11
Suburban Propane Partners LP (SPH) - Yield: 7.10%
SPH markets propane gas and other refined fuels to residential, commercial, industrial, and agricultural customers. Years of distribution growth: 11
Buckeye Partners LP (BPL) - Yield: 6.40%
BPL is one of the largest independent U.S. pipeline common carriers of refined petroleum products, with over 5,400 miles of pipeline. Years of distribution growth: 15
One way to avoid some of the tax headaches is to own MLPs via funds. The funds deal with the K-1s and issue 1099s to shareholders of the fund. This too comes with a price. Note the management fees of the MLP funds below:
Fiduciary-Claymore MLP Opportunity (FMO) - Yield 7.01%
Fiduciary/Claymore MLP Opportunity Fund is a closed ended equity mutual fund launched by Claymore Securities, Inc. It is co-managed by Claymore Advisors, LLC and Fiduciary Asset Management, LLC.
- Total Assets: $444.3 million
- Expense Ratio: 2.92%
Tortoise Energy Capital Corporation (TYY) - Yield: 6.43%
Tortoise Energy Capital Corp. is a close-ended equity mutual fund launched and managed by Tortoise Capital Advisors L.L.C. It invests in the public equity markets of the United States.
- Total Assets: $22.6 million
- Expense Ratio: 3.92%
Tortoise North American Energy Corporation (TYN) - Yield: 6.30%
Tortoise North American Energy Corporation is a close-ended equity mutual fund launched and advised by Tortoise Capital Advisors, L.L.C. The fund primarily invests in the public equity markets of North America.
- Total Assets: $148.9 billion
- Expense Ratio: 3.21%
Even if I could accept the high fees, there is one other item about MLPs that gives me pause. They are notoriously late in their tax reporting. It was usually well into February before the first K-1 shows up. Then I would normally get one or more corrected K-1s, sometimes as late as early April. MLPs provide excellent yields and are a tax efficient way to invest, but you must prepared to deal with their quirky characteristics.
Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.
(Photo: Steve Woods)
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Recently, the following companies announced increased cash dividends:
Village Super Market (VLGEA) operates a chain of 23 ShopRite supermarkets in New Jersey and Pennsylvania. March 19th the company increased its quarterly dividend 4% to $0.25/share. The dividend is payable on April 22, 2010 to shareholders of record at the close of business on April 1, 2010. The ex-dividend date is March 30, 2010. The yield based on the new payout is 3.61%.
Williams-Sonoma (WSM) sells high-quality products for the home via its retail stores and various direct-to-customer channels. March 22nd the company raised its quarterly dividend to $0.13/share. The yield based on the new payout is 1.88%.
Raven (RAVN) provides electronic precision-agriculture products, reinforced plastic sheeting, electronics manufacturing services, specialty aeronautics, and sewn products. March 22nd the company increased its quarterly dividend to $0.16/share. The dividend is payable April 15, 2010, to shareholders of record on March 31, 2010. The ex-dividend date is March 29, 2010. RAVN is a Dividend Achiever and has raised its dividend for 24 consecutive years. The yield based on the new payout is 2.89%. [Analysis]
ConocoPhillips (COP) is the the fourth largest integrated oil company in the world. March 24th the company raised its dividend 10%. COP also announced it would sell of 10 percent of LUKOIL and other assets over the next two years. The yield based on the new payout is 4.22%.
Starbucks (SBUX) is the leading coffee roaster and retailer of high-quality coffee products in the world. March 24th the company approved its first ever quarterly cash dividend of $0.10/share. The quarterly dividend of $0.10 per share will be paid on April 23, 2010, to shareholders of record on the close of business on April 7, 2010. The yield based on the new payout is 1.58%.
Clifton Savings Bancorp (CSBK) serves northeast New Jersey through its Clifton Savings Bank, S.L.A. subsidiary with assets of $801 million. March 24th the company raised its quarterly dividend to $0.06/share. The yield based on the new payout is 2.50%.
Raytheon (RTN) the world's sixth largest military contractor, specializes in making high-tech missiles and electronics. March 24th the company increased its quarterly dividend 21% to $0.375/share. The dividend will be paid on April 29, 2010 to shareholders of record as of the close of business on April 6, 2010. The yield based on the new payout is 2.62%.
Hingham Institution for Savings (HIFS) is a Massachusetts-chartered savings bank with offices located in Hingham, South Hingham, Hull, Scituate, Cohasset, SouthWeymouth, Norwell and Boston's South End. March 25th the company raised its quarterly dividend 4.5% to $0.23/share. The dividend is is payable on April 20, 2010 to stockholders of record as of April 9, 2010. Robert H. Gaughen, Jr., President and Chief Executive Officer of the Bank, in announcing the dividend, stated, "We are proud of the fact that we have increased cash dividends to shareholders in each of the past 15 years." The yield based on the new payout is 2.83%.
Avoiding the cash trap works best when applied on a consistent basis. 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)
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A bond is a debt security in which the issuer agrees to repay borrowed money with interest at fixed intervals. Bondholders have a creditor stake in the company. Technically, bonds do not pay dividends, but instead they pay interest. However, bonds are an important allocation for many income investors, thus I chose to include them in this series. There are certain things an informed investor needs to understand before purchasing bonds.
Interest rates play an integral part in determining the current value of a bond. Interest rates and the price of a bond are inversely related. The longer the time until a bond matures, the more susceptible its price is to changes in interest rates. Consider two bonds, one that has a maturity of 30 years and another with a 7 day maturity. If after both bonds are sold, interest rates go up one percent, the price of both bonds will decline since new investors expect to earn the prevailing interest rate. However, the interest rate decline will affect the price of the 30 year bond more than the 7 day bond, due to the longer period of "lost" earnings. It works the same in the other direction - if interest rates drop the bond holder will sell it at higher price which lowers the yield to the market rate.
In summary, longer-term investments have lower rate volatility at the expense of higher price volatility. Therefore, the term of the bond purchased should be dictated by your long-term investment goals. If your goal is capital preservation, short-term is the most appropriate investment. If an investor is willing to hold a bond until it matures and values lower rate volatility, then a longer-term investment will likely better meet this investor's needs.
Like preferred stocks, many investors choose not to research and buy individual bonds. Instead, they have opted to make their bond investments in funds. Consider the following bond funds:
Vanguard Long-Term Bond ETF (BLV) - Yield: 5.16%
Vanguard Long-Term Bond ETF seeks to track the performance of a market-weighted bond index with a long-term dollar-weighted average maturity. It maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 15 and 30 years.
- Total Assets: $2.9 billion
- Expense Ratio: 0.14%
- Holdings: 40% US Corporate, 39% US Treasury, 8% Foreign Corp, 5% Foreign Govt, 8% Other
- Distributions: Monthly
Vanguard Intermediate-Term Bond ETF (BIV) - Yield 4.32%
The investment seeks to track the performance of a market-weighted bond index with an intermediate-term dollar-weighted average maturity.The fund maintains a dollar-weighted average maturity consistent with that of the index ranging between 5 and 10 years.
- Total Assets: $9.8 billion
- Expense Ratio: 0.14%
- Holdings: 45% US Treasury, 37% US Corporate, 9% Foreign Corp, 5% Foreign Govt, 9% Other
- Distributions: Monthly
Vanguard Short-Term Bond ETF (BSV) - Yield: 2.74%
The investment seeks to track the performance of a market-weighted bond index with a short-term dollar-weighted average maturity. The fund's dollar-weighted average maturity is not expected to exceed 3 years
- Total Assets: $9.8 billion
- Expense Ratio: 0.14%
- Holdings: 52% US Treasury, 24% US Corporate, 14% US Agency, 8% Foreign Corp, 2% Other
- Distributions: Monthly
Vanguard Total Bond Market ETF (BND) - Yield: 3.98%
The investment seeks to track the performance of a broad, market-weighted bond index. The fund maintains a dollar-weighted average maturity consistent with that of the index, ranging between 5 and 10 years.
- Total Assets: $68.8 billion
- Expense Ratio: 0.14%
- Holdings: 33% Mtg Pass-thru, 29% US Treasury, 19% US Corporate, 7% US Agency, 12% Other
- Distributions: Monthly
Invest Grade Corp Bond (LQD) - Yield: 5.44%
The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the iBoxx $ Liquid Investment Grade index. The fund typically invests at least 90% of assets in the bonds of the underlying index, and at least 95% of assets in investment-grade corporate bonds.
- Total Assets: $12.2 billion
- Expense Ratio: 0.15%
- Holdings: 82% US Corporate, 18% Foreign Corp, 0% Other
- Distributions: Monthly
Emerging Mkts Sovereign Debt (PCY) - Yield: 6.44%
The investment seeks investment results that correspond generally to the price and yield (before fees and expensed) of an index called the DB Emerging Market USD Liquid Balanced index. The fund normally invests at least 80% of total assets in emerging markets U.S. dollar-denominated government bonds.
- Total Assets: $520.3 billion
- Expense Ratio: 0.50%
- Holdings: 80% Foreign Govt, 20% Other
- Distributions: Monthly
20+ Year Treasury Bond (TLT) - Yield 3.95%
The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital U.S. 20+ Year Treasury Bond index. The fund generally invests at least 90% of assets in the bonds of the underlying index.
- Total Assets: $2.4 billion
- Expense Ratio: 0.15%
- Holdings: 100% US Treasury
- Distributions: Monthly
Some authors have minimized the importance of bonds in a portfolio primarily focused on dividend growth securities. You can ignore them, but as the past decade has shown it may be to your own peril.
Full Disclosure: Long BLV, BIV, LQD, PCY. See a list of all my income holdings here.(Photo: Steve Woods)
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Recently, the following companies announced increased cash dividends:
Birner Dental (BDMS) develops, acquires, and provides business services to dental practice networks in Colorado, New Mexico and Arizona. March 12th the company increased its quarterly dividend 17% to $0.20/share. The yield based on the new payout is 4.92%.
Warwick Valley Telephone Co. (WWVY) provides telephone, Internet and video services to customers in the towns of Warwick, Goshen and Wallkill, New York andWest Milford and Vernon townships, New Jersey. March 12th the company raised its quarterly dividend 9.1% to $0.24/share. The dividend is paid on March 31, 2010 to shareholders of record as of March 22, 2010. The ex-dividend date is March 18, 2010. The yield based on the new payout is 6.63%.
Lennox Int (LII) is a global provider of heating, ventilation and air conditioning and refrigeration products. March 12th the company increased its quarterly dividend 7% to $0.15/share. The dividend is payable on April 15, 2010 to stockholders of record as of March 26, 2010. The ex-dividend date is March 24, 2010. The yield based on the new payout is 1.35%.
PepsiCo (PEP) is a major international producer of branded beverage and snack food products. March 15th the company raised its quarterly dividend 7% to $0.48/share. The dividend is payable on June 30, 2010 to shareholders of record on June 4, 2010. The ex-dividend date is June 2, 2010. PEP is a Dividend Aristocrat and has raised its dividend for 38 consecutive years. The yield based on the new payout is 2.89%. [Analysis]
Astro-Med Inc. (ALOT) designs, develops, manufactures and distributes specialty printers and electronic instruments that acquire, store, analyze and present data in multiple formats. March 16th the company raised its quarterly dividend to $0.07/share. The dividend is payable on April 2, 2010 to shareholders of record on March 19, 2010. The ex-dividend date is March 17, 2010. The yield based on the new payout is 3.76%.
Mead Johnson (MJN) is a global leader in pediatric nutrition. March 17th the company increased its quarterly dividend 12.5% to $0.225/share. The dividend is payable April 1, 2010, to shareholders of record on March 24, 2010. The ex-dividend date is March 22. The yield based on the new payout is 1.75%.
Guess? Inc. (GES) offers one of the world's leading lifestyle collections of contemporary apparel and accessories for men, women and children, sold in multiple channels including wholesale, company-owned retail locations, e-commerce, and licensed stores. March 17th the company increased its quarterly dividend to $0.16/share. The yield based on the new payout is 1.37%.
Air Products (APD) is a major producer of industrial gases and electronics and specialty chemicals also has interests in environmental and energy-related businesses. March 18th the company raised its quarterly dividend by 9% to $0.49/share. The dividend is payable on May 10, 2010 to shareholders of record at the close of business on April 1, 2010. The ex-dividend is March 30. APD is a Dividend Aristocrat and has raised its dividend for 28 consecutive years. The yield based on the new payout is 2.62%.
Prospect Capital (PSEC) is a financial services company that primarily lends to and invests in middle market privately-held companies. March 18th the company raised its cash distribution to $0.41/share. This distribution marks the Company's 22nd consecutive quarterly increase. The ex-dividend date is Monday, March 29, 2010. The record date is Wednesday, March 31, 2010. The yield based on the new payout is 13.48%.
When looking for companies that are likely to build future yield, look first at those that have done it in the past. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: Long PEP. See a list of all my income holdings here.
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Preferred stock is a special equity security that has properties of both equity and debt. Terms of the preferred stock are stated in a "Certificate of Designation" and all are unique to each security. However, there are some generalities. In the order of payments, preferred stock normally has preference to common stock, but are subordinate to bonds. Preferred stock usually has no voting rights, but some have a convertibility feature into common stock. Like bonds, preferred stocks are rated by the major rating agencies such as Moody's and S&P. The rating for preferred stock is generally lower since preferred dividends do not carry the same guarantees as interest payments from bonds, thus offer yields that are higher than bond market yields and common stock yields.
Given the unique nature of each individual preferred stock and the time necessary to research them, many have opted to place their preferred investments in funds. Consider the following preferred stock funds:
iShares S&P U.S. Preferred Stock Index (PFF) - Yield: 7.79%
The iShares S&P U.S. Preferred Stock Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P U.S. Preferred Stock Index.
- Total Assets: $3.3 billion
- Expense Ratio: 0.48%
- Holdings: 88% Financials, 5% Consumer Discretionary, Consumer Staples 2%, 5% Other
- Distributions: Monthly
PowerShares Financial Preferred Profile (PGF) - Yield: 8.59%
Tracks the performance of U.S. listed preferred stocks of preferred stocks issued in the US market by financial institutions and currently includes approximately 30 securities selected by Wachovia pursuant to a proprietary selection methodology.
- Total Assets: $1.5 billion
- Expense Ratio: 0.60%
- Holdings: 100% Financials
- Distributions: Monthly
PowerShares Preferred Portfolio Profile (PGX) - Yield: 7.91%
The Index is designed to replicate the total return of a diversified group of investment-grade preferred securities.
- Total Assets: $885.5 million
- Expense Ratio: 0.50%
- Holdings: 83% Financials, 17% Utilities
- Distributions: Monthly
Two additional ones to watch are SPDR Barclays Capital Convertible Bond (CWB) and SPDR Wells Fargo Preferred Stock ETF Profile (PSK). They were started in 2009, so there is very little historical data to look at. In addition, there is also Nuveen Quality Preferred Income (JTP), which is an exchange traded note (ETN) administered by JP Morgan. ETNs are linked to the performance of a market benchmark. ETNs are not equities or funds and they carry additional risk compared to an ETF. If the underwriting bank bankrupts, the value of the ETN will be eroded.
I currently do not hold any preferred stock (individually or in funds), but I am giving consideration to the funds listed above.
Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.
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Recently, the following companies announced increased cash dividends:
Myers Industries (MYE) manufactures a diverse range of polymer products for industrial, agricultural, automotive, commercial and consumer markets. March 5th the company increased its quarterly dividend 8% to $0.065/share. The dividend is payable April 5, 2010, to shareholders of record as of March 12, 2010. The ex-dividend date is March 10. The yield based on the new payout is 2.52%.
NYMAGIC, INC. (NYM) is an insurance holding company whose property and casualty insurance subsidiaries specialize in underwriting ocean marine, inland marine and non-marine liability insurance. March 5th the company raised its quarterly dividend to $0.10/share. The dividend is payable on April 6, 2010 to shareholders of record on March 31, 2010. The yield based on the new payout is 2.23%.
Applied Materials (AMAT) is the world's largest manufacturer of wafer fabrication equipment for the semiconductor industry. March 8th the company increased its quarterly dividend 17% to $0.07/share. The yield based on the new payout is 2.28%.
Medicis (MRX) develops and markets prescription and OTC products for the treatment of certain dermatological conditions. March 10th the company raised its quarterly dividend 50% to $0.06/share. The dividend is payable on April 30, 2010, to stockholders of record at the close of business on April 1, 2010. The ex-dividend date is March 29, 2010. The yield based on the new payout is 1.01%.
Cohen & Steers (CNS) manages high-income equity portfolios, specializing in U.S. REITs, international real estate securities, preferred securities, utilities and infrastructure securities. March 11th the company increased its quarterly dividend 100% to $0.10/share. The dividend is payable on April 16, 2010 to stockholders of record at the close of business on March 31, 2010. The ex-dividend date is March 29, 2010. The yield based on the new payout is 1.72%.
In selecting the best dividend investments, one must focus on growing cash dividends over time. For a list of stocks with a long string of consecutive cash 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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Below is some background information on REITs from REIT.com:Congress created REITs in the U.S. in 1960 as a way to make investment in large-scale, income-producing real estate accessible to all investors in the same way they typically invest otherwise – through the purchase and sale of liquid securities. U.S. REITs have seen their equity market capitalization soar from $90 billion to roughly $200 billion in just the past 10 years.
The 90% distribution requirement and no corporate taxes are the reasons REITs yields are often above average. However, it is important to note that because REITs pay no income tax, they are not eligible for the special treatment as a "qualified dividends", which are normally taxed at 15%. When comparing REIT yields to investments with qualified dividends, you must always look at them on an after-tax basis.
In order for a company to qualify as a REIT in the U.S., it must comply with certain ground rules specified in the Internal Revenue Code. These include: investing at least 75 percent of total assets in real estate; deriving at least 75 percent of gross income as rents from real property or interest from mortgages on real property; and distributing annually at least 90 percent of taxable income to shareholders in the form of dividends.
Consider an example where a taxpayer with a federal marginal tax rate of 30% owns AT&T (T) with a yield of 6.56% and Universal Health Realty Income Trust (UHT) with a yield of 6.82%. On an after-tax basis T, which qualifies for the 15% tax rate, will yield 5.58%, while UHT will only yield 4.78%.
Like utilities, most REITs rely on new capital either in the form of debt or equity to fund investments, pay debt and pay dividends, albeit to a lesser extent. Consider the following:
Universal Health Realty Income Trust (UHT) - Yield: 6.82%
Shares Outstanding: 2000 9m; 2008 11m
Long-Term Debt: 1999 $75.2m; 2008 $32.7m
Years of Negative Free Cash Flow: 0 of 10
National Retail Properties, Inc. (NNN) - Yield: 6.76%
Shares Outstanding: 2000 30m; 2009 79m
Long-Term Debt: 1999 $101.7m; 2009 $0m ($961.1m in short-term)
Years of Negative Free Cash Flow: 5 of 10
HCP, Inc. (HCP) - Yield: 6.12%
Shares Outstanding: 2000 102m; 2009 274m
Long-Term Debt: 2000 $1,158.9m; 2009 $5,456.1m
Years of Negative Free Cash Flow: 5 of 10
Realty Income Corporation (O) - Yield: 6.00%
Shares Outstanding: 2000 53m; 2009 103m
Total Debt: 2000 $404m; 2009 $1,354.6m
Years of Negative Free Cash Flow: 7 of 10
Essex Property Trust (ESS) - Yield: 4.56%
Shares Outstanding: 2000 18m; 2009 29m
Long-Term Debt: 2000 $595.5m; 2009 $0.0m ($1,847.4m short-term)
Years of Negative Free Cash Flow: 6 of 10
Corporate Office Properties Trust, Inc. (OFC) - Yield: 4.07%
Shares Outstanding: 2000 25m; 2009 56m
Long-Term Debt: 2000 $193.7m; 2009 $0.0m ($2,053.8m short-term)
Years of Negative Free Cash Flow: 9 of 10
Federal Realty Investment Trust (FRT) - Yield: 3.67%
Shares Outstanding: 2000 39m; 2009 59m
Long-Term Debt: 2000 $485.3m; 2009 $1,731.6m
Years of Negative Free Cash Flow: 2 of 10
Each of the above companies are growing their debt and/or shares outstanding, while not always generating sufficient cash to fund their operating expenses, including normal capital replacements (except for UHT). For a company to consistently raise its dividend, it must generate cash flows sufficient to meet operating obligations and to service outstanding debt. Since a REIT is legally required to pay out 90% of its earnings, it is less likely to eliminate its dividend, but it could drastically cut the dividend in the face of persistent weak earnings (like any company).
Similar to the utilities mentioned last week, I purchased some of the above companies many years ago, but I won't be rushing to add to increase my positions.
Full Disclosure: Long T, NNN, HCP, O. See a list of all my income holdings here.
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Recently, the following companies announced increased cash dividends:
Southwest Gas Corp. (SWX) is engaged in the business of purchasing, distributing, and transporting natural gas in portions of Arizona, Nevada, and California. February 26th the company increased its quarterly dividend 5.3% to $0.25/share. The dividend is payable June 1, 2010, to shareholders of record as of May 17, 2010. The yield based on the new payout is 3.38%.
PPL Corp. (PPL) is a holding company for PPL Utilities also has holdings in the U.K. February 26th the company increased its quarterly dividend 1.4% to $0.35/share. The dividend is payable on April 1 to shareholders of record on March 10. The ex-dividend date is March 8. PPL is a Dividend Achiever and has raised its dividend for 11 consecutive years. The yield based on the new payout is 4.83%.
Piedmont Natural Gas (PNY) distributes natural gas to 1,016,000 residential, commercial and industrial customers in portions of North Carolina, South Carolina and Tennessee. February 26th the company raised its quarterly dividend 3.7% to $0.28/share. The dividend is payable April 15, 2010, to shareholders of record at the close of business on March 25, 2010. The ex-dividend date is March 23. PNY is a Dividend Achiever and has raised its dividend for 32 consecutive years. The yield based on the new payout is 4.25%.
The Andersons (ANDE) operates in the agriculture and transportation markets in the U.S. February 26th the company increased its quarterly dividend 3% to $0.09/share. The dividend is payable April 22, 2010, to shareholders of record on April 1, 2010. The ex-dividend date is March 30, 2010. The yield based on the new payout is 1.08%.
Hanover Insurance (THG) offers insurance and financial products and services in the areas of risk management and asset management. February 26th the company raised its quarterly dividend 33% to $0.25/share. The dividend is payable March 22, 2010, to shareholders of record at the close of business on March 8, 2010. The yield based on the new payout is 2.34%.
Fred's (FRED) operates about 650 company-owned general merchandise stores and markets goods and services to 24 franchised Fred's stores in the southeastern U.S. February 26th the company raised its quarterly dividend 33% to $0.04/share. The dividend is payable on March 15, 2010, to shareholders of record as of March 5, 2010. The ex-dividend date is March 3, 2010. The yield based on the new payout is 1.50%.
Qualcomm (QCOM) focuses on developing products and services based on its advanced wireless broadband technology. March 1st the company raised its quarterly dividend to $0.19/share and announced that it will buyback up to $3 billion in common stock. The yield based on the new payout is 1.95%.
General Dynamics (GD) is the world's sixth largest military contractor and also one of the world's biggest makers of corporate jets. March 3rd the company increased its quarterly dividend 10.58% to $0.42/share. The dividend is payable May 7, 2010, to shareholders of record on April 9. The ex-dividend date is April 7, 2010. The yield based on the new payout is 2.30%.
Wal-Mart (WMT) operates a chain of discount department stores, wholesale clubs, and combination discount stores and supermarkets; and is the largest retailer in North America. March 4th the company raised its annual dividend 11% to $1.21/share. The next quarterly dividend will be paid on April 5, 2010 to shareholders of record on March 12, 2010. The ex-dividend date is March 10. WMT is a Dividend Aristocrat and has raised its dividend for 36 consecutive years. The yield based on the new payout is 2.24%. [Analysis]
American Greetings (AM) is the world's largest publicly owned greeting card company with operations in more than 70 countries. March 4th the company raised its quarterly dividend by 17% to $0.14/share. The quarterly dividend will be paid on April 5, 2010 to shareholders of record at the close of business on March 23, 2010. The yield based on the new payout is 2.71%.
WGL Holdings (WGL) provides natural gas service in theWashington, DC, metropolitan area and surrounding regions, including Maryland and Virginia. March 4th the company raised its quarterly dividend 2.7% to $0.3775/share. The new dividend is payable May 1, 2010, to shareholders of record on April 9, 2010. The ex-dividend date is April 7, 2010. The yield based on the new payout is 4.52%.
Not all dividend paying companies take pride in raising their dividends each year. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: Long WMT. See a list of all my income holdings here.
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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.
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Recently, the following companies announced increased cash dividends:
PG&E Corp. (PCG) is the parent of Pacific Gas & Electric Co. On February 19th the company increased its quarterly dividend to to $0.455/share. The yield based on the new payout is 4.33%.
Abbott (ABT) is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics. February 19th the company raised its quarterly dividend 10% to $0.44/share. The cash dividend is payable May 15, 2010, to shareholders of record at the close of business on April 15, 2010. The ex-dividend date is April 13. ABT is a Dividend Aristocrat and has raised its dividend for 38 consecutive years. The yield based on the new payout is 3.24%. [Analysis]
ITT Corp (ITT) is a diversified industrial manufacturer of advanced technology products. February 22nd the company raised its quarterly dividend 18% to $0.25/share. The dividend is payable on April 1, 2010 to shareholders of record on March 3, 2010. The ex-dividend date is March 1. The dividend yield is 1.95% on the new payout.
Home Depot (HD) operates a chain of over 2,200 retail warehouse-type stores, selling a wide variety of home improvement products. February 23rd the company increased its quarterly dividend 5% to 23.625/share. The dividend is payable on March 25, 2010, to shareholders of record on the close of business on March 11, 2010. The dividend yield is 3.01% on the new payout.
Kimberly-Clark (KMB) is a leading consumer products company's global tissue, personal care and health care brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex and Scott. February 23rd the company raised its quarterly dividend 10% to $0.66/share. The dividend is payable on April 5, 2010, to stockholders of record on March 5, 2010. The ex-dividend date is March 3, 2010. KMB is a Dividend Aristocrat and has raised its dividend for 38 consecutive years. The yield based on the new payout is 4.38%. [Analysis]
MOCON (MOCO) makes equipment to test packages and packaging material, and performs consulting and analytical services. February 24th the company raised its quarterly dividend 6% to $0.095/share. The dividend is payable on May 21, 2010, to shareholders of record on May 7, 2010. The ex-dividend date is May 5, 2010. Yield on the dividend is 3.74%.
Digital Realty Trust (DLR) operates as a real estate investment trust (REIT). February 24th the company increased its quarterly dividend to $0.48/share. The dividend will be paid on March 31, 2010, to common stockholders of record as of the close of business on March 15, 2010. The ex-dividend date is March 11, 2010. Yield on the dividend is 3.76%.
Altria Group (MO) is the largest U.S. cigarette producer. February 24th the company increased its quarterly dividend 3% to $0.35/share. The dividend is payable on April 9, 2010, to stockholders of record as of March 15, 2010. The ex-dividend date is March 11, 2010. MO is a Dividend Achiever and has raised its dividend for 14 consecutive years. The yield based on the new payout is 6.91%.
Westar Energy (WR) provides electric generation, transmission and distribution services to apx. 674,000 customers in Kansas as of December 31, 2007. February 24th the company raised its quarterly dividend 3.3% to $0.31/share. The dividend is payable April 1, 2010 to shareholders of record on March 9, 2010. The ex-dividend date is March 5. The yield based on the new payout is 5.62%.
Chubb (CB) is 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. February 24th the company increased its quarterly dividend 5.7% to $0.37/share. The dividend is payable on April 6 to shareholders of record on March 19. The ex-dividend date is March 17. CB is a Dividend Aristocrat and has raised its dividend for 45 consecutive years. The yield based on the new payout is 2.90%. [Analysis]
Weingarten Realty Investors (WRI) is a REIT focusing on shopping centers and industrial properties. February 24th the company increased its dividend. The yield based on the new payout is 4.92%.
McGrath Rentcorp (MGRC) rents and sells modular buildings and electronic test and measurement equipment; and manufactures and sells portable classrooms. February 24th the company increased its quarterly dividend to $0.225/share. The dividend is payable on April 30, 2010, to all shareholders of record on April 16, 2010. The ex-dividend date is April 14, 2010. MGRC is a Dividend Achiever and has raised its dividend for 18 consecutive years. The yield based on the new payout is 3.69%.
Essex Property Trust (ESS) is a real estate investment trust primarily owns and operates multi-family properties in California and the Pacific Northwest. February 24th the company raised its quarterly dividend to $1.0325/share. The dividend is payable on April 15, 2010 to shareholders of record as of March 31, 2010, will be $1.0325 per share. The ex-dividend date is March 29, 2010. ESS is a Dividend Achiever and has raised its dividend for 16 consecutive years. The yield based on the new payout is 4.83%.
Donaldson (DCI) operates as a worldwide manufacturer of filtration systems and replacement parts. February 24th the company increased its quarterly dividend 4% to $0.12/share. The dividend is payable March 19th to shareholders of record as of March 5th. The ex-dividend date is March 3. DCI is a Dividend Achiever and has raised its dividend for 24 consecutive years. The yield based on the new payout is 1.147%.
CenturyLink (CTL) provides voice service to 7 million customers and Internet service to 2 million customers in both rural towns and larger cities, like Las Vegas. February 25th the company raised its quarterly dividend 3.6% to $0.725/share. The dividend is payable on March 22, 2010 to shareholders of record on March 9, 2010. The ex-dividend date is March 5, 2010. CTL is a Dividend Aristocrat and has raised its dividend for 36 consecutive years. The yield based on the new payout is 8.37%.
Gap Inc. (GPS) is a specialty apparel retailer operates Gap, Banana Republic and Old Navy stores. February 25th the company increased its dividend 18% to $0.10/share. The dividend is payable on April 28, 2010 to shareholders of record at the close of business on April 7, 2010. The yield based on the new payout is 1.96%.
Old Republic Int. (ORI) writes property and liability, mortgage guaranty, title and life, and disability insurance. February 25th the company raised its quarterly dividend 1.4% to $0.1725/share. The dividend is payable March 15, 2010, to shareholders of record on March 5, 2010. Yield on the dividend is 6.1%. ORI is a Dividend Achiever and has raised its dividend for 28 consecutive years. The yield based on the new payout is 6.13%.
Cleco Corp (CNL) generates, transmits, distributes and sells electricity in Louisiana; holds ownership interest in three steam electric generating stations and one gas turbine. February 25th the company increased its quarterly dividend 11% to $0.25/share. The dividend is payable May 15, 2010. The yield based on the new payout is 3.90%.
The only way a company can consistently increase yield-on-cost is to consistently raise their dividends paid. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: Long ABT, KMB, CTL. See a list of all my income holdings here.
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