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sagitarius84 (< 20)

Seven Solid Dividend Increases bucking the trend of dividend cuts

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March 08, 2009 – Comments (3) | RELATED TICKERS: GD , QCOM , WMT

Last week marked one of the worst times for dividend investors as several prominent companies cut their dividends significantly. The last bastion of companies standing, which were paying dividends such as US Bancorp and Wells Fargo, disappointed their shareholders with dividend cuts. In addition to that markets fell to fresh 12-year lows.

However there were several notable dividend increases from a few solid investor focused stocks. Companies that still continue raising their dividends show that they have enough cash flows to not only operate successfully but also appear relatively immune to overall disruptions in the economy.

Wal-Mart (WMT), which operates the largest chain of retail stores in various formats worldwide, announced that its Board has approved a 15% increase in its quarterly dividend to $0.2725 per share. CEO Mike Duke said, "The strength of our operations and the resulting strong financial position allow us to increase our dividend payout to shareholders again this year. Our free cash flow remains strong enough to fund Wal-Mart's growth around the world, make strategic acquisitions and fund returns to shareholders through dividends and share repurchases."
Wal-Mart is a dividend aristocrat, which has consistently increased its dividends for thirty-five consecutive years. The stock currently yields 1.90%. Check out my analysis of Wal-Mart.

WGL Holdings (WGL), which engages in the delivery and sale of natural gas, and provides energy-related products and services, announced that its Board has approved an increase in its quarterly dividend from $0.355 to $0.3675 per common share. WGL Holdings is a dividend champion, which has consistently increased its dividends for thirty-three consecutive years. The stock currently yields 4.70%.

Qualcomm (QCOM), which designs, manufactures, and markets digital wireless telecommunications products and services based on its code division multiple access (CDMA) technology and other technologies, announced that its Board has approved a 6% increase in its quarterly dividend from $0.16 to $0.17 per common share. Qualcomm has consistently increased its dividends for six consecutive years. The stock currently yields 1.90%.

General Dynamics (GD), which provides business aviation; combat vehicles, weapons systems, and munitions; shipbuilding design and construction; and information systems, technologies, and services, announced that its Board has approved an 8.60% increase in its quarterly dividend from $0.35 to $0.38 per share. General Dynamics has consistently increased its dividends for fifteen consecutive years. The stock currently yields 3.20%.

Piedmont Natural Gas (PNY), which engages in the distribution of natural gas to residential, commercial, industrial, and power generation customers, announced that its Board has approved a 3.80% increase in its quarterly dividend from $0.26 to $0.27 per share. Piedmont Natural Gas is a dividend champion, which has consistently increased its dividends for thirty-one consecutive years. The stock currently yields 4.30%.

Essex Property Trust (ESS), which engages in the ownership, operation, management, acquisition, development, and redevelopment of apartment communities, announced that its Board has approved a small increase in its quarterly dividend from $1.02 to $1.03 per share. Essex Property Trust is a dividend achiever, which has consistently increased its dividends for fourteen consecutive years. This real estate investment trust currently yields 7.50%.

Canadian Natural Resources Limited (CNQ), which engages in the acquisition, exploration, development, production, marketing, and sale of crude oil, natural gas liquids, natural gas, and bitumen, announced that its Board has approved 5% increase in its quarterly dividend from $0.10 to $0.105 per share. Canadian Natural Resources Limited is an international dividend achiever, which has consistently increased its dividends since 2001. The stock currently yields 1.00%.

The latest list of solid dividend raisers proves that income investors should seek to invest in companies with business models that are not cyclical. Companies which have a moat in a certain geographical area, industry or product should do fine irrespective of the overall gyrations of the economy and the stock market. It is companies like these that could generate increasing streams of income, which dividend growth investors are after.

Full Disclosure: Long WMT

Relevant Articles:

- Wal-Mart Dividend Analysis
- Dividend Aristocrats List for 2009
- The Dividend Edge
- Best Dividends Stocks for the Long Run

3 Comments – Post Your Own

#1) On March 08, 2009 at 3:06 PM, Aerius (81.49) wrote:

Added QCOM to my "end of crisis" picks. It'll have to shed a bit more in terms of price, but overall good looking company - definately worth looking into. Nice post.

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#2) On March 08, 2009 at 3:36 PM, Seano67 (65.03) wrote:

It's great that these companies are increasing dividends- but still, the yields are so crappy. Big, big money making operations like WalMart and Qualcomm paying a measly 1.9%? It's nice they pay a dividend, but a yield that low almost begs the question of, what's the fricken point? If I were a shareholder in one of those companies, I'd almost rather they just stick that money right back into the company rather than continuing to pay out a dividend that by almost any measure I'd consider to be token and sub-par.

I've noticed that many of the 'dividend aristocrats' are low yielders like that. Hell, far as I'm concerned if you want dividends yielding a solid rate look to Europe and Latin America. On average, they are *much* more generous than American companies when it comes to paying dividends.

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#3) On March 09, 2009 at 8:30 AM, sagitarius84 (< 20) wrote:

Seano,

 Some yields might be low, thus one could have a certain criteria for minimum yield. You should not look into dividends only chasing yield - you should look for a balance between yield and dividend growth. Your yield on cost on WMT might be 2% no, but if WMT keeps raising dividends by 12% for the next 12 years, your yield on cost would reach 8%.. Not bad.. At the same time fixed income instruments bought today would keep yielding 3-4%..

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