Friday, June 26, 2009

* PetSmart (PETM) Announces a 233% Dividend Increase

In this environment many income investors are happy to see any dividend increase. Not all companies are hiding behind the economic downturn and short-changing their dividend increases. To the contrary, PetSmart (PETM) after an extensive analysis of expected free cash flows showed confidence in their our operating plan with a generous dividend increase and share repurchase plan.

PETM operates more than 1,100 pet stores in the U.S. and Canada, offering pet food, supplies and services. Tuesday the company PETM announced an increase its quarterly dividend of 233% to $0.10/share. In addition, its Board of Directors authorized a $350 million stock purchase plan. In a statement the company said it plans to continue to grow the business by opening about 40 stores per year for the foreseeable future. At the new rate, the stock is yielding 1.92%.

Below are some other companies rewarding their shareholders with increased cash dividends:

Del Monte Foods (DLM) is one of the largest producers, distributors and marketers of premium quality branded food and pet products for the U.S. retail market. The company also produces, distributes and markets private label food and pet products. Recently, DLM increased its quarterly dividend 25% to $0.05/share. The dividend is payable on August 6, 2009 to stockholders of record as of the close of business on July 23, 2009. At the new rate, the stock is yielding 2.22%.

Duke Energy (DUK) provides service to about 3.9 million electric customers in North Carolina, South Carolina, Indiana, Ohio and Kentucky, and 500,000 gas customers in Kentucky and Ohio. Tuesday, the company raised its quarterly dividend 4.3% to $0.24/share. "Despite challenging economic conditions, Duke Energy continues to successfully implement its business strategy. We are pleased to share this success with our investors," said James E. Rogers, chairman, president and CEO. At the new rate, the stock is yielding 6.67%.

Darden (DRI) operates the Red Lobster, Olive Garden, Bahama Breeze and Seasons 52 chains, as well as the LongHorn Steakhouse and Capital Grille chains. On June 23rd the company announced a 25% increase in its quarterly dividend to $0.25/share. At the new rate, the stock is yielding 3.13%.

Hatteras Financial (HTS) is an externally managed mortgage real estate investment trust (REIT) formed to invest in adjustable-rate and hybrid adjustable-rate single-family residential mortgage pass-through securities guaranteed or issued by a U.S. government agency. HTS on Tuesday increased its quarterly dividend by 4.71% to $1.10/share. The dividend will be paid on July 24, 2009, to stockholders of record on July 6, 2009, with an ex-dividend date of July 1, 2009. At the new rate, the stock is yielding 16.52%.

Though it may seem that most companies are cutting their dividends, many continue to show strength and increase their dividends. For stocks 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.
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Tags: [DLM] [DRI] [DUK] [HTS] [PETM]