Friday, June 24, 2011

10 Stocks Using Real Cash To Pay Higher Dividends

You can’t spend earnings! At first glance, this seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important axiom for all types of investors. Through fraud and manipulation financial statements can be made to look quite impressive, but the cash that arrives in your brokerage account is real.

An increasing cash dividend keeps pressure on management to ensure the company is well run. If there are too many missteps, eventually the dividend will slip. Here are several stocks where management recently met the challenge by raising their cash dividends:

Medtronic, Inc. (MDT) manufactures and sells device-based medical therapies worldwide. June 23rd the company increased its quarterly dividend 8% to $0.2425 per share. Medtronic's dividend has more than doubled over the past five years, and today's announcement marks the company's 34th consecutive year of increased dividend payments. The dividend is payable on July 29, 2011, to shareholders of record at the close of business on July 8, 2011. The dividend is payable on July 29, 2011, to shareholders of record at the close of business on July 8, 2011. The yield based on the new payout is 2.5%.

Hingham Institution for Savings (HIFS) provides various financial products and services to individuals and small businesses in Boston and southeastern Massachusetts. June 23rd the company increased its quarterly dividend 4.2% to $0.25 per share. The dividend will be paid on July 21, 2011 to stockholders of record as of July 11, 2011. This represents a 4.2% increase over the previous quarterly dividend. The yield based on the new payout is 1.9%.

Education Realty Trust, Inc. (EDR) is a real estate investment trust (REIT) that develops, acquires, owns, and manages student housing communities located near university campuses in the United States. June 23ed the company increased its quarterly dividend 40% to $0.07 per share of common stock for the quarter ending June 30, 2011. The dividend is payable August 16, 2011, to shareholders of record as of July 29, 2011. The yield based on the new payout is 3.4%.

Realty Income Corporation (O) engages in the acquisition and ownership of commercial retail real estate properties in the United States. June 21st the company increased its monthly dividend 0.2% to $0.144875 per share. The dividend is payable on July 15, 2011 to shareholders of record as of July 1, 2011. This is the 55th consecutive quarterly increase and the 62nd dividend increase since Realty Income went public in 1994. The yield based on the new payout is 5.2%.

Duke Energy Corporation (DUK) operates as an energy company in the Americas. June 21st the company increased its quarterly dividend 2.0% to $0.25 per share. The dividend is payable on Sept. 16, 2011, to shareholders of record at the close of business Aug. 12, 2011. This is the 85th consecutive year that Duke Energy has paid a quarterly cash dividend on its common stock. The yield based on the new payout is 5.3%.

Best Buy Co., Inc. (BBY) operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services. June 21st the company increased its quarterly dividend 7% to $0.16 cents per share. The dividend is payable on October 25, 2011 to shareholders of record as of October 4, 2011. The yield based on the new payout is 2.0%.

Annaly Capital Management, Inc. (NLY), a real estate investment trust, engages in the ownership, management, and financing of a portfolio of investment securities. June 20th the company increased it quarterly dividend 5% to $0.65 per share.This dividend is payable July 28, 2011 to common shareholders of record on June 30, 2011. The ex-dividend date is June 28, 2011. The yield based on the new payout is 13.9%.

IDT Corporation (IDT) operates as a telecommunications and energy company. June 20th the company increased its quarterly dividend 4.5% to $0.23 per share. The dividend is payable on July 12, 2011 to shareholders of record of IDT Corporation Class A Common Stock and Class B Common Stock as of the close of business on July 1st. The ex-dividend date will be June 29th. The yield based on the new payout is 3.5%.

American Water Works Company, Inc. (AWK) provides water and wastewater services to residential, commercial, and industrial customers in the United States and Canada. June 17th the company increased its quarterly dividend 4.5% to $0.23 per share. The dividend is payable on September 1, 2011 to all shareholders of record as of August 12, 2011. The yield based on the new payout is 3.1%.

PetSmart, Inc. (PETM) operates as a specialty retailer of products, services, and solutions for pets in North America. June 17th the company increased its quarterly dividend 12% to $0.14 per share beginning in the second quarter of fiscal 2011. The yield based on the new payout is 1.2%.

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 MDT, O. See a list of all my income holdings here.

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(Photo Credit)

Tags: [MDT] [HIFS] [EDR] [O] [DUK] [BBY] [NLY] [IDT] [AWK] [PETM]

3 comments:

  1. Good point on manipulation. Best Buy has started scaling back its B&M stores to remain competitive. I think that is a good move. Maybe if it also ramped up its online presence, I might have more faith in BBY.

    ReplyDelete
  2. Is Realty Income's (O) raising of cash from stock sales and borrowings to pay these dividends anything to be concerned about? Has it been this way since 1994?

    ReplyDelete
  3. Anon: Most REITs fund dividends through debt and equity issuances. For more info see:

    http://www.dividend-growth-stocks.com/2010/03/increasing-dividend-yield-part-ii-reits.html

    Best Wishes,
    D4L

    ReplyDelete

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