How to Uncover Hidden Dividend Gems
Uncovering the best dividend stocks is a difficult process. It requires constant screening of the dividend achievers and dividend aristocrat indexes, in order to identify companies which are worth your time to further research. Research entails reading analysts reports, annual company reports, staying up to date on news in the industry and competitors in general and constantly evaluating whether the stock is worth your investment or not. If you find the right dividend stocks however, the rewards could be tremendous. Sometimes however certain stocks would not be widely followed by dividend investors, because of their small size. Another reason could be that they are very close to getting on the dividend achievers list, but are not there yet.
Several companies increased distributions over the past week. The companies include:
National Bankshares, Inc. (NKSH) operates as the bank holding company for The National Bank of Blacksburg (NBB), which provides various retail and commercial banking services to individuals, businesses, non profits, and local governments in Virginia. The company increased its semi-annual dividend by 7.3% to 44 cents/share. This was the tenth consecutive annual dividend increase for the company. The stock yields 3.10% and has a dividend payout ratio of less than 50%.
Mine Safety Appliances Company (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. The company increased its quarterly dividend to 25 cents per share, an increase of about 4% over its prior dividend in February of 24 cents. This was the thirty-eight consecutive annual dividend increase for this dividend champion. The stock yields 3.40%.
FactSet Research Systems Inc. (FDS) provides financial and economic information, analytical applications, to investment professionals. The company’s board of directors approved a 15% increase in the quarterly dividend to 23 cents/share. This is the eleventh consecutive annual dividend increase for this dividend achiever. The stock yields 1.20%.
NACCO Industries, Inc.(NC), through its subsidiaries, engages in lift trucks, small appliances, specialty retail, and mining businesses primarily in the Americas, Europe, and the Asia-Pacific. The Board of Directors increased its regular cash dividend from 51.75 cents to 52.25 cents per share. This dividend achiever has raised distributions for 25 consecutive years. The stock yields 2%.
For the above stocks, I typically require a current dividend yield of at least 2.50% before I start researching them. For the stocks below, since they have not raised distributions for at least one decade, I would just keep an eye on them.
Assurant, Inc. (AIZ), through its subsidiaries, provides specialized insurance products and related services in North America and internationally. The company raised distributions by 7% to 16 cents/share. This is the sixth consecutive annual dividend increase for the company. The stock yields 1.80%.
Portland General Electric Company (POR) operates as an integrated electric utility in Oregon. The company raised dividends by 2% to 26 cents/share. This is the fourth consecutive annual dividend increase since 2006. The stock yields 5.30%.
Quaker Chemical Corporation (KWR) develops, produces, and markets formulated chemical specialty products for various heavy industrial and manufacturing applications. The company increased its quarterly dividend to $0.235 per share from $0.23/share. This was the first increase since 2008. The stock yields 3.30%.
CPI Corp.(CPY), through its subsidiaries, provides professional portrait photography services. The company declared a second quarter cash dividend of $0.25 per share, an increase of 56%. This was the first dividend increase since 2003. The stock yields 3.50%.
Cliffs Natural Resources Inc.(CLF) a mining and natural resources company, produces iron ore pellets, lump and fines iron ore, and metallurgical coal. The board of directors increased the quarterly cash dividend on the Company’s common shares by 60% to $0.14 per share. The stock yields 1%.
The Timken Company (TKR), together with its subsidiaries, manufactures engineered anti-friction bearings and assemblies, alloy steels, aerospace power transmission systems, and related products and services worldwide. The company raised its quarterly distributions by 44.40% to 13 cents/share. This isn’t too impressive however, given the fact that the company cut its distributions in half in 2009. Over the past decade the company has always managed to cut distributions whenever they reached 18 cents/share. The stock yields 1.60%.
Once again I was able to identify a hidden dividend gem, while browsing through the list of dividend increases. The hidden gem is called National Bankshares, Inc. (NKSH), which has decided to forgo taking any monies from the U.S. Treasury through the Capital Purchase Program due to its already strong capital position. I would be featuring a stock analysis of the stock in the future. I would not expect the company to be added to the dividend achievers index, particularly because its market capitalization is less than $200 million and it trades six thousand shares per day.
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