Monday, May 22, 2017

7 Companies Compounding Shareholder's Wealth With Higher Dividends

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 shareholder's wealth with increased cash dividends:

Southwest Airlines Co. (LUV) operates a passenger airline that provides scheduled air transportation in the United States and near-international markets. Recently the company increased its quarterly dividend 12% to $0.125 per share. The dividend is payable June 28, 2017 to stockholders of record on June 7, 2017, with an ex-dividend date of June 5, 2017. The yield based on the new payout is 0.9%.

KeyCorp (KEY) provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance, and investment banking products and services to individual, corporate and institutional clients. Recently the company increased its quarterly dividend 12% to $0.095 per share. The dividend is payable June 15, 2017 to stockholders of record on May 30, 2017, with an ex-dividend date of May 25, 2017. The yield based on the new payout is 2.2%.

Chubb Limited (CB) provides a range of insurance and reinsurance products and services to clients around the world. Recently the company increased its quarterly dividend 2.9% to $0.71 per share. The dividend is payable July 21, 2017 to stockholders of record on June 30, 2017, with an ex-dividend date of June 28, 2017. The yield based on the new payout is 2.1%.

PACCAR Inc (PCAR) is a technology company. The Company's segments include Truck, Parts and Financial Services. Recently the company increased its quarterly dividend 4.2% to $0.25 per share. The dividend is payable June 6, 2017 to stockholders of record on May 19, 2017, with an ex-dividend date of May 17, 2017. The yield based on the new payout is 1.6%.

Marsh & McLennan Companies, Inc. (MMC) is a professional services firm offering clients advice and solutions in risk, strategy and people. Recently the company increased its quarterly dividend 10% to $0.375 per share. The dividend is payable August 15, 2017 to stockholders of record on July 11, 2017, with an ex-dividend date of July 7, 2017. The yield based on the new payout is 2.0%.

The Timken Company (TKR) engineers, manufactures and markets bearings, transmissions, gearboxes, belts, chain, couplings and related products and offers a spectrum of power system rebuild and repair services across the world. Recently the company increased its quarterly dividend 3.8% to $0.27 per share. The dividend is payable June 1, 2017 to stockholders of record on May 19, 2017, with an ex-dividend date of May 17, 2017. The yield based on the new payout is 2.3%.

W. R. Berkley Corporation (WRB) is an insurance holding company. Recently the company increased its quarterly dividend 7.7% to $0.14 per share. The dividend is payable July 5, 2017 to stockholders of record on June 15, 2017, with an ex-dividend date of June 13, 2017. The yield based on the new payout is 0.8%.

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: No position in the aforementioned securities. See a list of all my Dividend Growth Portfolio holdings here.

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Tags: LUV, KEY, CB, PCAR, MMC, TKR, WRB,

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