by Jim Woods | October 7, 2011 11:44 am
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.
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.
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.
Northwest Natural Gas (NYSE:NWN) provides natural gas service to about 675,000 customers in western Oregon and southwestern Washington. The Great Northwest’s demand for gas is hefty, and that has translated into a hefty dividend for the company’s shareholders. Northwest increased its quarterly payout to 44.5 cents from 43.5 cents per share. The new dividend yield, based on the Oct. 5 closing price of $45.01, is 3.95%. The new dividend will be paid Nov. 15 to shareholders of record as of Oct. 31. The increase represents the 56th consecutive year in which the company has raised its annual dividend.
Crude oil and natural gas firm QR Energy LP (NYSE:QRE) pumped up its quarterly dividend, raising its payout to shareholders by more than six cents to 47.5 cents. The new dividend yield, based on the Oct. 4 closing price of $20.45, is a substantial 9.29%. The Texas-based energy company said the new dividend would be dealt out on Feb. 10 to unitholders of record as of the close of business on Jan. 30. The company also approved a third-quarter dividend of 41.25 cents per unit. That dividend will be payable on Nov. 11 to unitholders of record on Oct. 31. If two dividends at once weren’t enough, QR Energy also reported that it has closed its $577 million acquisition of oil and natural gas fields in Texas, Oklahoma and New Mexico.
Specialty chemical products maker RPM International (NYSE:RPM) went into the financial laboratory and came back out with a newly increased quarterly dividend concoction. The new payout of 21.5 cents per share represents a 2.4% increase over the prior quarter’s payout of 21 cents. The new dividend yield, based on the Oct. 6 closing price of $20.43, is 4.21%. The new payout will be made on Oct. 31 to shareholders of record as of Oct. 17. The increase by RPM represents the company’s 38th consecutive year of consistently higher payouts, which, according to RPM’s press release, puts it in an elite category of less than half of 1% of all 19,000 publicly traded U.S. companies.
Senior Housing Properties (NYSE:SNH) is a REIT that operates 320 properties in 36 states and Washington, D.C., including 226 senior living properties and two rehabilitation hospitals. Business was good in the third quarter, as the company nursed a penny increase in its quarterly dividend, upping the payout to 38 cents per share from 37 cents. The new dividend yield, based on the Oct. 4 closing price of $21.51, is 7.07%. The company plans to pay the dividend on Nov. 11 to shareholders of record as of Oct. 19.
As of this writing, Jim Woods did not own a position in any of the aforementioned stocks. Check out other companies increasing dividends in past weeks here.
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