5 Dividend Hikes Making Headlines

by Dividend Growth Investor | December 20, 2011 1:00 am

In the world of dividend investing, there is always a trade-off between dividend yield and dividend growth. Companies that typically spot above average yields tend to increase distributions very slowly, and corporations that manage to increase distributions very quickly typically tend to pay a low current yield. I believe that there is a place for both strategies[1] in a dividend growth investor’s portfolio:

The high-yielders provide a steady stream of distribution income today, which will likely have a hard time keeping up with inflation, and the high dividend growth stocks pay low yields today, but provide a great opportunity for high yields on cost [2]in the future (coupled with strong potential for capital gains[3]).

The boards of five consistent dividend-paying companies recently approved higher dividend payments to their loyal shareholders. The following consistent dividend payers exhibited the above mentioned characteristics very closely:

Nucor (NYSE:NUE[4]), together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: steel mills, steel products and raw materials. The company raised its quarterly dividend by 0.7% to 36.5 cents per share. This marked the 39th consecutive annual dividend increase for this dividend champion[5]. Yield: 3.8% (analysis[6]).

Realty Income (NYSE:O[7]) engages in the acquisition and ownership of commercial retail real estate properties in the U.S. This real estate investment trust raised its monthly dividend to 14.55 cents per share. Realty Income is a dividend achiever[8], which has increased dividends for 17 years in a row. Yield: 5.2% (analysis[9]).

Franklin Resources (NYSE:BEN[10]) is a publicly owned asset management holding company. It manages, through its subsidiary, separate client-focused equity, fixed income and balanced portfolios. The company raised its quarterly dividend by 8% to 27 cents per share. This marked the 31st consecutive annual dividend increase for this dividend champion[5]. Yield: 1.1%.

ABM Industries (NYSE:ABM[11]), through its subsidiaries, provides facility services for commercial, industrial, institutional and retail facilities primarily in the U.S. It operates in four segments: janitorial, engineering, parking and security. The company raised its quarterly dividend by 3.6% to 14.5 cents per share. This marked the 45th consecutive annual dividend increase for this dividend champion[5]. Yield: 2.8%.

Urstadt Biddle Properties (NYSE:UBP[12]) is another REIT which engages in the acquisition, ownership and management of commercial real estate properties in the U.S. The company raised its quarterly dividend by 1% to 24.75 cents per share. This marked the 18th consecutive annual dividend increase for this dividend achiever[8]. Yield: 5.73%

Full Disclosure: Long NUE and O

For more information visit DividendGrowthInvestor.com[13].

Endnotes:
  1. for both strategies: http://www.dividendgrowthinvestor.com/2010/04/three-dividend-strategies-to-pick-from.html
  2. yields on cost : http://www.dividendgrowthinvestor.com/2009/02/yield-on-cost-matters.html
  3. potential for capital gains: http://www.dividendgrowthinvestor.com/2011/12/dividend-investors-do-not-forget-about.html
  4. NUE: http://studio-5.financialcontent.com/investplace/quote?Symbol=NUE
  5. dividend champion: http://www.dividendgrowthinvestor.com/2011/02/dividend-champions-best-list-for.html
  6. analysis: http://www.dividendgrowthinvestor.com/2010/10/nucor-corporation-nue-dividend-stock.html
  7. O: http://studio-5.financialcontent.com/investplace/quote?Symbol=O
  8. dividend achiever: http://www.dividendgrowthinvestor.com/2011/01/dividend-achievers-offer-income-growth.html
  9. analysis: http://www.dividendgrowthinvestor.com/2011/07/realty-income-o-dividend-stock-analysis.html
  10. BEN: http://studio-5.financialcontent.com/investplace/quote?Symbol=BEN
  11. ABM: http://studio-5.financialcontent.com/investplace/quote?Symbol=ABM
  12. UBP: http://studio-5.financialcontent.com/investplace/quote?Symbol=UBP
  13. DividendGrowthInvestor.com: http://www.DividendGrowthInvestor.com

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