Friday, May 1, 2009

* IBM Assumes Familiar Leadership Role

IBM (IBM), a name once synonymous with blue-chip technology, faced a near-death experience in the early 1990's when it misjudged the importance of PCs at a time when demand for mainframes was waning and corporate downsizing was in full swing. IBM has never been able to regain it technology bellwether crown from Microsoft (MSFT) and Intel (INTC), but it has taken steps to regain its leadership role.

Last Tuesday, IBM stood up and was counted as a leader. At a time when the ill-prepared and the fearful are cutting dividends and hoarding cash, IBM increased its quarterly dividend 10% to $0.55/share and announced a $3 billion share repurchase program. The company has increased its quarterly dividend by 175% percent since 2006 and this is the 14th consecutive increase. The dividend is payable June 10, 2009 to stockholders of record May 8, 2009. based on the new rate, IBM is currently yielding: 2.10%

Below are many other companies joining IBM as leaders andrewarding their shareholders with higher cash dividends:
  • Cullen/Frost Bankers (CFR) increased its qtr. dividend 2% to $0.43/share. Yield 3.54% (analysis)
  • Donegal Group (DGICA) raised its qtr. dividend to $0.112/share. Yield: 3.07%
  • Valmont Industries (VMI) ups its qtr. dividend 15.4% to $0.15/share, Yield: 0.95%
  • Bemis (BMS) boosts qtr dividend to $0.225/share. Yield: 3.72%
  • Costco Wholesale (COST) increased its qtr dividend to $0.18/share. Yield: 1.50%
  • BOK Financial (BOKF) raised its qtr. dividend 6.7% to $0.24/share. Yield: 2.48%
  • W.W. Grainger (GWW) ups its qtr. dividend 15% to $0.46/share. Yield: 2.22%
  • Talisman Energy (TLM) boosts its semi-annual dividend 12.5% to $0.1125/share. Yield: 1.47%
  • ExxonMobil (XOM) increased its qtr. dividend to $0.42/share. Yield: 2.45%
  • UGI Corporation (UGI) raised its qtr dividend 4% to $0.20/share. Yield: 3.35%
  • Safeway (SWY) ups qtr. dividend 21% to $0.10/share. Yield: 1.56%
  • Occidental (OXY) boosts qtr. dividend 3.1% to $0.33/share. Yield: 2.23%
Hopefully, this is just the beginning and in the coming weeks we will continue to see more dividend increases. For more companies with a long string of consecutive dividend increases, see this list.

Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.