Friday, September 7, 2012

This Largely Unknown Tech Stock Just Announced A HUGE Cash And Dividend Increase

Tech companies are not usually known for dividend increases. Historically, most of them would pour every dollar back into the business to meet growth expectations. When growth slowed, they would purchase their stock with excess cash and eventually pay a dividend when all other uses of cash were extinguished. Not all tech companies follow this pattern...

Epiq Systems (EPIQ) is a software and services company that deals with bankruptcy claims, assets, financial records, and other data associated with liquidations and reorganizations for the legal profession. In July 2010 it paid its first dividend at $0.035 per share. From there it nearly doubled its original dividend to $0.065 per share. An 85% increase in 2 years is impressive, but EPIQ didn't stop there.

In the company's latest press release it stated, "Net cash provided by operating activities has continued to be exceptionally strong for the company, up over 300% year-to-date at June 30, 2012 compared to the prior year." With this much available cash investors would generally expect a larger dividend, and the company didn't disappoint them.

On September 6th the EPIQ increased its quarterly dividend an additional 38% to $0.09 cents per share. The dividend is payable on November 27, 2012, to stockholders of record at the close of business on November 9, 2012. The yield based on the new payout is 2.8%. Year-to-date, the quarterly cash dividend per share has increased 80% as compared to the dividend of $0.05 cents per share paid in the first quarter of 2012.

Below are some other companies increasing their cash dividends during the last week:

Verizon Communications Inc. (VZ) provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. September 6th the company increased its quarterly dividend 3% to $0.515 per share. The dividend is payable on Nov. 1, 2012, to shareholders of record at the close of business on Oct. 10, 2012. This is the sixth consecutive year that the company has raised its dividend. Increases were 2.6 percent in each of the past two years. The yield based on the new payout is 4.7%.

Brady Corporation (BRC) manufactures and markets identification solutions and specialty products that identify and protect premises, products, and people. September 6th the company increased its quarterly dividend 2.7% to $0.19 per share. The dividend is payable October 31, 2012 to shareholders of record at the close of business on October 10, 2012. This dividend represents the 27th consecutive annual increase in dividends. The yield based on the new payout is 2.7%.

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 VZ in my High-Yield Portfolio. See a list of all my dividend growth holdings here.

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(Photo Credit)

Tags: [EPIQ] [VZ] [BRC]

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