This week has seen another stunning amount of dividend increases for large US companies with 18 companies reporting increases. US economic data has suggested that the economy is starting to grow at a faster pace, and it seems that, maybe, these companies are looking towards a better year and can afford to increase their dividends to attract investment, or alternatively rewarding investors who stayed with them through the ‘rough patch’.

General Shares

Kicking off the week PG&E Corp. (PGC), the parent company of Pacific Gas & Electric, raised its quarterly dividend to $0.455 per share, giving a new yield of 4.33%. The dividend will be paid to shareholders of record at the close of business on March 31. ITT Corp. (ITT), a manufacturer of advanced technology products, has increased its dividend a respectable 18% to $0.25% per share, generating a not-so-respectable new yield of 1.95%. ITT Corp. will go ex-dividend on March 1. Home Depot (HD), a market leader in retail home improvement, has increased its dividend 5% to $0.23625 per share, producing a new yield of 3.01%. Cleco Corp. (CNL), electricity generators and distributors for Louisiana, increased its dividend 11% to $0.25 per share. The resultant yield is 3.90% and will be paid on May 15.

MOCON (MOCO), a provider of equipment to test packaging material (a curious niche), raised its dividend to 6% giving a new dividend of $0.095 per share, and a resultant yield of 3.74%. MOCON shares will go ex-dividend on May 5, 2010. Westar Energy (WR), providing electric generation and transmission to Kansas, has increased its dividend to $0.31 per share, resulting in a healthy yield of 5.62%. Westar Energy goes ex-dividend on March 5. Finally, GAP Inc. (GPS), a large clothing retailer, has increased their dividend 18% to $0.10 per share. The new yield remains low at 1.96% and, for those interested, will be payable to shareholders of record at the close of business on April 7.

Dividend Aristocrats

The dividend aristocrats have been relatively busy this week with Abbott (ABT), one of the best pharmaceutical companies, increasing their dividend for the 38^th consecutive year, up 10% to $0.44 per share. Abbott will go ex-dividend on April 13, and the yield for this new dividend is 3.24%. Kimberly-Clark (KMB), the parent company of internationally renowned brands such as Huggies and Kleenex, has increased their quarterly dividend to $0.66, an increase of 10%, generating a current yield of 4.38%. As with Abbott, Kimberly-Clark has raised their dividend for 38 consecutive years and they will go ex-dividend on March 3 with the payout on April 5. Chubb (CB), one of the largest property-casualty insurers in the US has increased their dividend to $0.37 per share, producing a new yield of 2.90% payable to shareholders of record at the close of business on March 19. Finally, CenturyLink (CTL), a large US voice services provider, increased their dividend for the 36^th consecutive year to $0.725 per share. The current yield for this stock is a huge 8.37% payable to all shareholders of record at the close of business on March 9.

Dividend Achievers

More dividend achievers have increased their dividends this week, with some of the companies looking much more attractive as investments than most dividend aristocrats. Altria Group (MO), the largest cigarette producer in the US, has increased their dividend to $0.35 per share, giving a new yield of an attractive 6.91%. Altria Group has increased its dividend for 14 consecutive years and will go ex-dividend on March 11. McGrath Rentcorp (MGRC) has increased its dividend for the 18^th consecutive year up to $0.225 per share. The resultant yield is 3.69% and is payable on April 30.

Donaldson (DCI), an international manufacturer of filtration systems, increased its quarterly dividend, for the 24^th consecutive year, to $0.12%, up 4%. This produces an unattractive yield of 1.147% and will be paid on March 19. Old Republic Int. (ORI), writer of property and liability, mortgages and insurance, raised its quarterly dividend for the 28^th consecutive year to $0.1725 per share. This takes the new yield to a healthy 6.13%, payable on March 15.

Other Investment Vehicles

Digital Realty Trust (DLR) operates as a real estate investment trust, and will pay their common shareholders a dividend of $0.48 per share on March 31 after going ex-dividend on March 11. The yield on this trust is 3.76%. Another real estate investment trust, Weingarten Realty Investors (WRI), focusing mainly on shopping centers, has increased its dividend to $0.25, giving a current yield of 4.86%. Essex Property Trust (ESS), both a real estate investment trust and dividend achiever having raised its dividend for 16 consecutive years, has increased its dividend to $1.0325 per share generating a yield of 4.83%. Essex Property Trust will go ex-dividend on March 29.

Final Thoughts

Most of the stocks featured here have a current yield of 3 to 4%, which may not seem much to an income investor. However, it is important to bear in mind that yields of stocks have provided a cushion for investors over the last 18 months as markets have fallen sharply, and capital-growth investors have been burned.

A few stocks do stand out in this week’s dividend increases, some for the wrong reasons, others for having high yields. ITT Corp. and Gap Inc. have yields below the 2% mark, which aren’t attractive investments for income investors. One may then wonder if they are attractive for capital-growth investment, but it would appear not – both companies seem to be currently going on steadily, and provide relatively low-risk growth over time, but not on a large scale.

At the other end of the spectrum, CenturyLink in particular has a very impressive yield at 8.37%. If you can afford to risk it, you may be able to pick these up on a down day and squeeze a few extra percentage points out of the yield, maybe taking it up to the very-respectable 8.50% mark. Altria Group, Westar Energy and Old Republic all have attractive yields that would be difficult to find in a savings account at present and are all definitely worth considering as an income investment.

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