dividend increases

Checking the pulse of dividend increases is an exercise whose goal is to uncover potential dividend growth plays that I might have otherwise missed out on. Another reason for that is to refute the idea that dividend investing is dead. It is also interesting to look for trends in the data, while browsing through the list of dividend increasers.

After a slow week for dividend increases last week, eleven companies with strong balance sheets showed enough confidence in their ability to generate sufficient cash flows to substantiate dividend raises. Despite the tough economic conditions the USA is experiencing, these companies still managed to defy the odds and increase their cash dividends.

Companies have several means through which they share their prosperity with shareholders. Dividends are the portion of corporate profits paid out to stockholders in the form of cash. Share buybacks on the other hand distributes cash to existing shareholders in exchange for a fraction of the company’s outstanding equity.

Several companies rewarded their patient investors with dividend raises. The companies include:

Several stocks had some major dividend increases over the past week. Others didn’t deliver such exciting news but reaffirmed their payments to shareholders.

Any dividend investor knows cuts have been coming at a fast and furious pace. Not all the cuts are from the financial sector though. Dividend paying stocks in the S&P 500 Index lost a great deal of ground to the non-payers in February.

The past two weeks have been pretty uneventful in terms of dividend increases, mainly due to the Christmas and New Year’s holidays. Once the majority of market participants returned to their trading desks, it was again business as usual. The markets did end the week 4.20% lower, which left the largest ETF by assets that tracks S&P 500, the SPY, down 1.2% on the year.

Dominion Resoures and Realty Income Increased their payouts to shareholders last week..

Last week saw even more notable dividend increases as companies from many sectors showed confidence not only in their ability to generate increasing profits, but also to share the wealth with their owners.

Last week marked yet another rollercoaster performance in the stock market, as major indices clocked in yet another weekly loss. Markets rebounded from their lows on Monday as they were reassured by General Electric (GE) that it will maintain its dividend payment in 2009, which boosted the stock by over $2 in one day.

Not all companies are conserving cash in this difficulat credit environment; there were several dividend increases which reiterate my opinion that the dividend cuts might not spread to the non-financial sector.

Both McCormick & Co. (MKC) and Becton Dickinson (BDX) announced increases in their quarterly dividends today.

Last week the markets broke through yet another set of support levels to the lowest point in 11 years. Pundits, technical analysts and others kept getting more bearish on the markets and the economy. There were however several stocks which showed enough confidence in their financial situation that they decided to stick with their dividend payment plans.

In theory it makes sense for companies to reinvest all of their earnings straight back into the business, compounding the growth rate of the enterprise to achieve a higher asset base. If a company can put their earnings to good use, there is no reason for them to pay fat dividends.

Last week the markets continued their roller coaster ride, sending most investors accounts to new five year lows. On Thursday the S&P 500 broke through its October lows and reached its lowest level since 2003, before recovering the very same day.