Despite a disappointing payroll report that weighed on the market to end the week, the stock market remains in the black on the year by a small margin. But since moving sideways is no way to make money for your retirement, high yield dividend stocks remain crucial to investors who want to build profits despite Wall Street’s volatility.
By focusing on stocks raising dividends and boosting dividend yields, investors can limit risk and ensure they still get something back every quarter. To help you find the best dividend stocks, here’s a list of 4 important dividend increases in the past week or so:
Monsanto Dividend Increase
Bad news can be good news on Wall Street — and Russia’s announcement that the drought-stricken third largest grain exporter in the world is banning grain exports next year sent agricultural stocks soaring. Monsanto Co. (NYSE: MON) was one of them this week, tacking on about +4%.
But for long term investors, the best news is that Monsanto also increased its quarterly dividend to 28 cents a share from 26.5 cents, payable on Oct. 29 to shareholders of record on Oct. 8. The new dividend yield for Monsanto is nearly 1.9% at current valuations.
The world’s biggest seed maker said in June that it plans to buy back up to $1 billion shares over three years. Its executives also said the company could see earnings growth in the mid-teen percentages after this year.
Monsanto’s two main segments are seeds and traits and agricultural productivity. The former consists of MON’s global seeds and traits business, and genetic technology platforms, including biotechnology, breeding and genomics. Those products are sold through seed brands in large-acreage crops like corn, cotton, oilseeds and wheat as well as small-acreage crops like vegetable seeds.
Agricultural productivity consists of protection products and residential lawn and garden herbicide products. One of its better known products is Roundup. But its other brands are household names, at least in farming country: Acceleron, DeKalb, Genuity, Deltapine, Yield Guard and WestBred, among others.
Murphy Oil Dividend Increase
In other dividends news, Murphy Oil Corp. (NYSE: MUR) raised its quarterly dividend by 10%, to 27.5 cents a share. That gives Murphy stock a dividend yield of about 1.9%. The dividend is payable Sept. 1 to shareholders as of Aug. 16.
The company, which has more than 1,000 gas stations, many of them at Wal-Mart (NYSE: WMT) stores, cited increasing production, good cash flow and its expected ability to fund growth.
This is a familiar refrain for dividend stocks. Strong cash flow also helped GE raise its dividend recently.
The dividend announcement came in tandem with Murphy Oil Corp.’s earnings report. On Thursday, MUR stock execs said the oil company’s second-quarter 2010 operating earnings were $1.41 a share. But it projected Q3 earnings of $1.10 to $1.15 a share. Analysts surveyed by Thomson Reuters expected $1.30. Q2 revenue rose 22.7%, to $5.6 billion from $4.5 billion a year earlier.
MUR said last month it is selling three oil refineries in order to repay debt and buttress the growth of its more profitable exploration business.
It’s the first company in its peer group to completely exit the refining industry. And that may happen as early as the first quarter of next year.
Standard & Poor’s Ratings Services put its ratings on Murphy on watch for downgrade, saying a divestiture “weakens the company’s business risk profile” and reduces diversity.
Leggett & Platt Dividend Increase
Diversified manufacturer Leggett & Platt Inc. (NYSE: LEG) raised its quarterly dividend by a penny, or 3.8%, to 27 cents. The yield is a hefty 5.2% at an annual rate.
LEG, based in Carthage, Mo., had first-half earnings from continuing operations of 64 cents per diluted share, up from 14 cents in the first half of 2009, when an increased provision for bad debts associated with a customer bankruptcy impacted results.
LEG says it has had annual dividend increases for 39 consecutive years at more than over 14% compound annual growth. The company has 19 business units, 19,000 employees and more than 140 manufacturing locations in 18 countries.
More than bedsprings, the 127-year-old company’s segments are residential furnishings, commercial fixturing and components, industrial materials, and specialized products through its automotive, machinery, and commercial vehicle products groups. This diversification could serve Leggett & Platt well in the months ahead. And the big dividend may be nice for investors, too.
Buckeye Technologies Dividend Increase
Buckeye Technologies Inc. (NYSE: BKI) declared its first regular quarterly dividend — 4 cents — payable Sept. 15 to shareholders of record at the close of business Aug. 16. Annualized, that’s about a 1% dividend yield if the payout stands unchanged and valuations stay steady.
On Tuesday, Buckeye reported record earnings in its fiscal fourth quarter of an adjusted 26 cents a share compared with 18 cents in Q4 of 2009. Sales rose 16% from a year earlier.
BKI is trading above $12 and with a 1-year target estimated at $18.60. Analysts’ general opinion: A strong buy. Though it’s worth noting that the company is relatively small ($480 million market cap and about $850 million in annual revenue) so it’s not that well-covered. Buckeye, based in Memphis, manufactures and distributes cellulose-based specialty products made from wood and cotton. BKI stock competes with the likes of International Paper (NYSE: IP), $10.42 billion market cap; Fibia Cellulose (NYSE: FBR), $7.77 billion; Avery Dennison Corp. (NYSE: AVY) $3.84 billion; and Sonoco Products (NYSE: SON), $3.33 billion.
Buckeye is able to use the cash to reward stockholders because it has reduced debt and interest expenses, Buckeye leadership said. The company cut its debt by $36 million in Q4 2010, to a total of $238 million.
BCE Inc. Dividend Increase
BCE Inc. (NYSE: BCE) Canada’s largest phone company, reported second-quarter profit Thursday that beat analysts’ estimates, thanks in part to the addition of Apple Inc. (NASDAQ: AAPL) iPad and iPhone service. As a result, BCE raised its full-year forecast and dividend.
Specifically, BCE raised its full-year dividend by 5 percent to $1.83 – giving the stock a mammoth yield of nearly 5.5%.
It appears BCE has the cash to back up those big payouts. In the latest BCE earnings report, profit rose to 77 Canadian cents a share from 58 cents a year earlier, the Montreal-based company said. The average earnings estimate was just 72 cents a share.
Bell Mobility, BCE’s mobile-phone business, started offering data plans for the iPad in May along with the iPhone it began selling in November. Bell signed up 98,459 wireless subscribers last quarter, beating expectations, in large part due to demand for Apple products.
As of this writing, Wayne Faulkner did not own a position in any of the stocks named here.
GameChanger Stocks to Build Your Wealth. GameChangers are companies that rewrite the rules, revolutionizing the way we live and thrive. And their business breakthroughs delivered handsome profits for savvy investors who got in early. Discover the next generation of GameChangers you should be buying now. Download your FREE copy of Hilary Kramer’s new report here.
