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15 Dividend Stocks Providing An Inflation Hedge

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May 16, 2011 – Comments (0) | RELATED TICKERS: UG , INTC , M

Investing in dividend growth stocks is not about buying a current high yield, but instead building a high yield-on-cost over time. One of the criticisms I am hearing more often is, "That low yield isn't even covering inflation." This is a very valid concern, if true. The way low many low yielding stocks yields compensate for inflation is by growing their dividend well in excess of the inflation rate.

Below are several companies building an inflation hedge for their shareholders by increasing their cash dividends:

United-Guardian Inc. (UG) researches, develops, manufactures, and markets cosmetic ingredients, personal and health care products, pharmaceuticals, and specialty industrial products. May 12th the company increased its semi-annual dividend 20% to $0.36 per share. The dividend is payable on June 13, 2011 to all stockholders of record as of the close of business on May 30, 2010. The yield based on the new payout is 4.9%.

Delphi Financial Group, Inc. (DFG) is an integrated employee benefit services company. May 12th the company increased its quarterly dividend 9% to $0.12 per share. The dividend is payable on June 8, 2011 to shareholders of record at the close of business on May 25, 2011. The yield based on the new payout is 1.6%.

Portland General Electric Company (POR) is a fully integrated electric utility that serves approximately 821,000 residential, commercial and industrial customers in Oregon. May 11th the company increased its quarterly dividend 2% to $0.265 per share. The dividend is payable on or before July 15, 2011, to shareholders of record at the close of business on June 24, 2011. The yield based on the new payout is 4.1%.

Mine Safety Appliances Co. (MSA) develops, manufactures, and supplies health and safety products used by workers in the fire service, homeland security, construction, and other industries, as well as the military. May 11th the company increased its dividend 4% to $0.26 per share. The dividend is payable June 10, 2011 to shareholders of record on May 23, 2011. The yield based on the new payout is 2.8%.

Quaker Chemical Corporation (KWR) is a leading global provider of process chemicals, chemical specialties, services, and technical expertise to a wide range of industries. May 11th the company increased its quarterly dividend 2.1% to $0.24 per share. The dividend is payable on July 29, 2011, to shareholders of record at the close of business on July 15, 2011. The yield based on the new payout is 2.4%.

Intel Corporation (INTC) engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. May 11th the company increased its quarterly dividend 16 to $0.21 per share, beginning with the dividend that will be declared in the third quarter of 2011. Today’s announcement is the second dividend increase in the past 6 months. Intel previously raised the dividend 15 percent in November 2010. The yield based on the new payout is 3.6%.

Macy's, Inc. (M) operates department stores and Internet websites that sell a wide range of merchandise. May 11th the company increased its quarterly dividend 100% to to $0.10 per share. The dividend is payable July 1, 2011, to shareholders of record at the close of business on June 15, 2011. The yield based on the new payout is 1.4%.

YAMANA GOLD INC. (AUY) engages in gold and other precious metals mining and related activities. May 10th the company increased its quarterly dividend 50% to $0.045 per share. The yield based on the new payout is 1.5%.

Autoliv Inc. (ALV) develops, manufactures, and supplies automotive safety systems to automotive industry. May 10th the company increased its quarterly dividend 5% to $0.45 per share. This is the fourth consecutive quarter that Autoliv has increased its dividend. The yield based on the new payout is 2.3%.

Timken Company (TKR) develops, manufactures, markets, and sells anti-friction bearings and related products and steel products. May 10th the company increased its quarterly dividend 11% to $0.20 per share. The dividend is payable on June 2, 2011, to shareholders of record as of May 20, 2011. It is the 356th consecutive dividend to be paid on the common stock of the company. The yield based on the new payout is 1.5%.

Nelnet (NNI) is a transaction processing and finance company. May 10th the company increased its quarterly dividend 43% to $0.10 per share. The dividend is payable on June 15, 2011, to shareholders of record at the close of business on June 1, 2011. The yield based on the new payout is 1.7%.

Republic Bancorp, Inc. (RBCAA) provides banking, tax refund solutions, and mortgage banking services to individuals and businesses. May 9th the company increased its quarterly dividend 8% to $0.154 per share. The dividend is payable July 15, 2011 to shareholders of record as of June 17, 2011. The yield based on the new payout is 3.0%.

MCG Capital Corporation (MCGC) is a private equity firm specializing in investments in middle market companies. May 9th the company increased its quarterly dividend to $0.17 per share. The dividend is payable on July 15, 2011 to shareholders of record on June 15, 2011. The yield based on the new payout is 10.6%.

Tower Group, Inc. (TWGP) provides a range of commercial, personal, and specialty property and casualty insurance products and services. May 9th the company increased its quarterly dividend 50% to $0.1875 per share. The dividend is payable on June 24, 2011 to stockholders of record as of June 13, 2011. The yield based on the new payout is 3.1%


Marriott International, Inc. (MAR) operates and franchises hotels and related lodging facilities worldwide. May 6th the company increased its quarterly dividend 14% to $0.10 per share. The dividend is payable on June 24, 2011 to shareholders of record on May 20, 2011. The yield based on the new payout is 1.1%.

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

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