Compound interest is what occurs when interest previously earned is added to the principle and is considered when calculating future interest – i.e. earning interest on interest. So, what’s more powerful than compound interest? Compound dividends! Compound dividends are like compound interest on steroids – you are not only earning on reinvested dividends, but the dividend rate is increasing.
Here are several companies compounding their dividends by recently raising their cash distributions to shareholders:
Safeway (SWY) is a major food retailer that operates about 1,750 stores in the U.S. and Canada. December 11th the company increased its quarterly cash dividend to $0.10/share. The dividend is payable on January 14, 2010 to stockholders of record at the close of business on December 24, 2009. The ex-dividend date is December 22. The yield based on the new payout is 1.87%.
Pfizer (PFE) is the world's largest pharmaceutical company. It produces a wide range of drugs across a broad therapeutic spectrum. December 14th the company raised its quarterly dividend 12.5% to $0.18/share. The dividend is payable March 2, 2010, to shareholders of record at the close of business on February 5, 2010. The yield based on the new payout is 3.91%.
General Mills (GIS) is a major producer of packaged consumer food products, including Big G cereals and Betty Crocker desserts/baking mixes. December 14th the company boosted its quarterly dividend 12% $0.49/share. The dividend is payable February 1, 2010, to shareholders of record January 11, 2010. The yield based on the new payout is 2.87%.
Hatteras Financial (HTS) is a REIT investing in adjustable-rate and hybrid adjustable-rate single-family residential mortgage pass-through securities. December 15th the company increased its quarterly dividend to $1.20/share. The dividend will be paid on January 22, 2010, to stockholders of record on December 28, 2009, with an ex-dividend date of December 23, 2009. The yield based on the new payout is 15.82%.
Moody's (MCO) is a leading global credit rating, research and risk analysis concern. December 15th the company increased its quarterly dividend 5% to $0.105/share. The dividend is payable March 10, 2010 to stockholders of record at the close of business on February 20, 2010. The yield based on the new payout is 1.56%.
BCE (BCE) is a Canadian wireline and wireless telecommunications company. December 17th the company raised its annual dividend 7% to $1.74/share. The first quarter installment is payable on April 15, 2010 to shareholders of record at the close of business on March 15, 2010. The yield based on the new payout is 6.80%.
Waste Management (WM) is the largest U.S. trash hauling/disposal company. December 17th the company increased its quarterly dividend 9% to $0.315/share. This marks the sixth consecutive year that the Company has increased its quarterly dividend. The yield based on the new payout is 3.85%.
Urstadt Biddle Properties (UBA) this REIT owns and manages commercial real estate properties primarily in the northeastern United States. December 17th the company boosted its quarterly dividend to $0.2425/share. The dividends are payable January 22, 2010 to stockholders of record on January 8, 2010. The yield based on the new payout is 6.44%.
To maximize the compounding effect, a company must raise their dividends each year. 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.
Tags: [BCE] [GIS] [HTS] [MCO] [PFE] [SWY] [UBA] [WM]
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