Among high yield dividend stocks boosting their payday this week are blue chips Texas Instruments (NYSE: TXN), Kroger Co. (NYSE: KR) and Yum! Brands Inc. (NYSE: YUM). Dividend stock investments like these remain in favor as investors look for the safety of yield instead of just betting on a stock’s share appreciation.
One good rule of thumb for dividend stock investors is to make sure they purchase companies raising their dividends instead of just keeping them steady – or even worse, cutting them. A long track record of dividends is also important, and one of this week’s dividend increases in Paccar (NASDAQ: PCAR) boasts a record of dividends since 1943.
It’s pretty quiet on the dividend front this week without many earnings reports. Typically, increases in dividend payouts occur around quarterly earnings numbers. However, there are a few stocks raising their yields worth pointing out:
Texas Instruments Dividend Increase
On Thursday, Texas Instruments (NYSE: TXN) approved a $7.5 billion stock buyback alongside a dividend increase of +8% for the tech giant. Texas Instruments raised its dividend by a penny to 13 cents a share quarterly, giving TXN stock a new dividend yield of about 1.9%.
Dividends at Texas Instruments are reliable, with a quarterly payday since 1962, however the 1 cent increase is meager and the first dividend boost in over five fiscal quarters.
Texas Instruments has a market cap of just under $30 billion, as has been lagging the broader markets lately. In 2010, TXN stock is down about 2% compared with a small gain for the Dow Jones.
Kroger Dividend Increase
Grocery store heavyweight Kroger Co. (NYSE: KR) posted strong earnings this week, and along with that report came news of an +11% increase to the company’s dividend. The increase of a penny will give KR stock a 10.5 cent dividend this quarter, for a dividend yield of about 1.9%
On Tuesday, supermarket giant Kroger said earnings per share rose to 41 cents in the second quarter of fiscal 2010 from 39 cents a year earlier. Sales, including gasoline at Kroger stores, were $18.8 billion for the quarter, up +6% from a year earlier. Without fuel, sales rose +2.7%.
Kroger has been outperforming the market in 2010, with shares up about +6% so far since January 1.
Yum Dividend Increase
Yum! Brands Inc. (NYSE: YUM) announced a +19% dividend increase this week. The more boosted YUM stock’s quarterly dividends from 21 cents to 25 cents a share and gave the fast-food leader a new dividend yield of 2.1%.
The dividend payment to be distributed on November 5 to shareholders of record October 15. The Yum! dividend policy continues to target a payout ratio of 35 to 40% of annual net income.
YUM stock is having a breakout year, with shares up +31% year to date compared to a relatively flat stock market.
Paccar Dividend Increase
Truck maker Paccar (NASDAQ: PCAR) said Tuesday it will raise its quarterly dividend to 12 cents from 9 cents per share, a +33% increase that gives the company a new yield of about 1%.
The dividend will be paid Dec. 6 to shareholders of record as of Nov. 19. Though the company’s yield isn’t stunning, Paccar has been paying dividends since 1943.
PCAR stocks has been performing very well this year, with gains of about +22% so far in 2010 compared to a small increase in the major indexes.
Colony Financial Dividend Increase
Small-cap real estate finance company Colony Financial Inc. (NYSE: CLNY) approved a +19% increase for the REIT’s quarterly dividend. This is the company’s third increase this year, from 21 to 25 cents previously, and brings the dividend yield of Colony Financial to about 4.6%
Colony Financial went public about a year ago, and has had a rough go of it due to the mortgage crisis. The stock is off about -5% since its fall 2009 IPO and off about -9% year-to-date. However, the big dividend yield is worth noting.
As of this writing, Jeff Reeves did not own a position in any of the stocks named here.
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