Stocks enjoyed a good week of gains to start off the fourth quarter, and the move higher is a welcome respite from the selling that plagued the markets throughout the third quarter. Historically, the fourth quarter is the strongest for stocks, and Q4 tends to be particularly strong in years when the market suffers big losses in the previous quarter.
Now that the stage is set for a potential final-quarter rebound, investors will be looking for companies with strong fundamentals and sound financial metrics, as shares of these companies provide the best chance for big upside. One of the strongest financial metrics revealing the health of a company is its quarterly dividend — particularly if a company is increasing that dividend. With this thesis in mind, here are seven companies increasing dividends this week.
American Financial Group
Property and casualty insurance provider American Financial Group (NYSE:AFG) raised its premium payout to shareholders by 8%, lifting its quarterly dividend to 17.5 cents per share. The new dividend yield, based on the Oct. 3 (the day the dividend was announced) closing price of $30.26, is 2.31%. The dividend is payable on Oct. 25 to shareholders of record as of Oct. 14.
Bank of the Ozarks
Regional financial firm Bank of the Ozarks (NASDAQ:OZRK) — which has banking operations in Arkansas, Texas, Georgia, Florida, North Carolina, South Carolina and Alabama — put a little Southern hospitality into its quarterly dividend. The firm increased its payout by 5.3% to 10 cents per share. The new dividend yield, based on the Oct. 3 closing price of $20.64, is 1.94%. The company has increased its quarterly dividend in seven of the past eight quarters. In September, Bank of the Ozarks completed a 2-for-1 stock split.
The maker of specialty glass and ceramics products is perhaps best known for making the high-tech glass used in LCD screens. This week, Corning Inc. (NYSE:GLW) polished up a clear dividend picture for shareholders by increasing its quarterly payout to 7.5 cents per share, an increase of 50% over its prior dividend in August. The new dividend yield, based on the Oct. 5 closing price of $12.60, is 2.38%. The company also announced a $1.5 billion share buyback program, which it expects to begin in the fourth quarter. The buyback plan authorization expires at the end of 2013.