Friday, March 6, 2009

* As Financials Wither, One Titan Stands Strong

Last week we mentioned that JPMorgan (JPM), the second-largest U.S. bank, slashed its dividend by 87% to $0.05. Possibly that wasn't quite enough to keep keep big brother happy, so JPM took their quarterly dividend down to $0.01/share. The dividend is to be paid on Friday, April 3, 2009 to common stockholders of record as of Friday, March 20, 2009. JPM closed down 8.14% - it is always good to deliver bad news twice.

Wednesday, following in JPM's footsteps, U.S. Bancorp (USB) slashed its dividend by 88% to $0.05/share. U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, "The decision to reduce our quarterly dividend was thoughtfully considered and very difficult, given the importance of the dividend to our shareholders." USB closed down 12.48% after the announcement. Then dropped another 18.2% on Thursday.

While the financials continue to wither, some companies are designed to flourish in these difficult economic times. Yesterday, Wal-Mart (WMT) reported that same store sales, ex-fuel, for the month rose 5.1%, and its Board increased the quarterly dividend 15% to $0.2725/share. WMT's dividend now yields around 2%. This is the 35th consecutive year WMT has raised its dividend. CEO Mike Duke said, "The strength of our operations and the resulting strong financial position allow us to increase our dividend payout to shareholders again this year. Our free cash flow remains strong enough to fund Wal-Mart's growth around the world, make strategic acquisitions and fund returns to shareholders through dividends and share repurchases."

Other companies are poised to perform by raising their cash dividends to shareholders. Here are several that have recently done just that:
  • Qualcomm (QCOM) lifts its qtr. dividend 6% to $0.17/share (yield 1.84%)
  • General Dynamics (GD) boosts its qtr. dividend 8.6% to $0.38/share (yield 3.48%)
  • WGL Holdings (WGL) raises its quarterly dividend 3.5% to $0.3675/share (yield 4.68%)
For more companies around the world with a long string of consecutive dividend increases, see Dividends Value's Stock Ideas page.

Full Disclosure: Long WMT

Tags: [GD] [JPM] [QCOM] [USB] [WGL] [WMT]