Ned Davis Research examined the relative performances of stocks between 1972 and 2006 and established a link between rising dividends and superior long-term returns. The study found S&P 500 stocks that consistently increased their dividends returned 10.4% total return (dividends + share price appreciation), while those that did not increase their dividends returned only 8.2%. The 2.2% advantage of the dividend raisers would equate to an additional $1,802 per $100 invested in 1972.
Below are several companies looking to provide their share holders with superior long-term returns by increasing their cash dividends:
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.
Tags: [ETR] [IEX] [MUR] [OZRK] [RPM] [SKT] [TJX]
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