We are only two-thirds of the way through February, and there has already been a large amount of dividend increases. In particular, over twenty notable companies raised their dividends in the second week of February alone, bringing the total number of dividend-raisers up to around 30 for the first three weeks of February. In the same period last year, the majority of companies were maintaining, or some even reducing, their dividend payouts after the ‘big crash’. Here we shall take a look at some notable increases, and ponder what the increases the last week of February will bring for income investors.

The utilities sector has announced a lot of dividend increases; CMS Energy (CMS), one of the largest electricity and gas producers in the US, was first to bite the bullet by increasing its quarterly dividend from $0.125 to $0.15, now giving it a current yield of 3.87%. This increase was based on the increasing strength of the company’s financial position and the ‘fundamental soundness’ of their business strategy. NorthWestern Corporation (NWE) followed suit by increasing their dividend to $0.34 per share, giving a healthy yield of 5.24% – a return comparable to some saving accounts but with the added benefit of capital gains being a possibility. The holding company of Public Service Electric and Gas (PEG), which delivers electric and gas to 70% of New Jersey, raised their dividend to $0.3425 per share which equates to a yield of 4.37%. PSE&G have based this increased dividend on their earnings for the fourth quarter of 2009 – up almost 50%, giving an EPS for the period of 69 cents, up from 46 cents.

In the week commencing February 15, Boardwalk Pipeline Partners (BWP) increased their distribution to $0.50 per unit, resulting in an impressive yield of 6.70%, a good investment to consider if you are purely dependent on income rather than growth. Buying BWP on a down day could make you a healthy return in dividends. SCANA Corp. (SCG) finished the week’s utility dividend increases by nudging up theirs by 1.1% to $0.475 per share. This gives another healthy yield of 5.22%.

Infinity Property and Casualty (IPCC), provider of ‘non-standard’ auto insurance, has increased their dividend by 17% to $0.14 per share. However, they are going to have to do better than this to attract investment as the new yield is set at only 1.42%. Corporate Executive Board (EXBD), specializing in excelling the roles of corporate executives, has increased their dividend to $0.11 which is a yield of 1.88%, just beating the yield of Infinity Property and Casualty. It might be best to view Corporate Executive Board as a capital growth investment, rather than an income investment, as they have made favorable capital returns over the last 12 months.

Some of the dividend aristocrats did as expected and raised their dividends this month, with 3M, Sigma-Aldrich, PepsiCo, Coca-Cola and Sherwin-Williams revising their payouts upwards. 3M (MMM) raised its dividend for the 52^nd consecutive year, increasing it to $0.525 per share, giving a yield of 2.60%. Next, Sigma-Aldrich (SIAL) increased their dividend 10% to $0.155 per share, bringing a new yield of 1.28%. Dividends have increased at Sigma-Aldrich for the last 34 years. PepsiCo (PEP) and Coco-Cola (KO), both large soft drink producers, raised their dividends this month to $0.45 and $0.44 respectively. This gives a yield of 2.87% for Pepsi, and a slightly higher 3.15% for Coca-Cola. The last dividend aristocrat to increase this month was Sherwin-Williams (SHW), the largest US producer of paints, increased their dividend to $0.36 per share, taking the yield to 2.20%.

A fair amount of dividend achievers also posted dividend increases this month, including Commerce Bancshares, Mercury General, Jack Henry, United Technologies, Owens & Minor, Avon Products, Diebold, Ross Stores, Colgate-Palmolive and T. Rowe Price.

Commerce Bancshares (CBSH) increased their dividend to $0.235 per share, giving a new yield of 2.33%. Mercury General (MCY), an insurance holdings company, raised their dividend to $0.59, increasing their already high yield to 5.78%. Jack Henry (JKHY), an integrated computer systems provider, has set their dividend up to $0.095 per share; an increase of 12%. This gives them a new yield of 1.69%. United technologies (UTX), the provider of the well known Otis elevators and Sikorsky helicopters, have increased their dividend to $0.425 per share, resulting in a yield of 2.49%. Owens & Minor (OMI), leading distributer of medical instruments, has raised their dividend by 15% to $0.625 per share, resulting in a new yield of 5.34%. Avon Products (AVP), a direct marketer of cosmetics and related items with a peculiar business model, increased their dividend to $0.22 per share, resulting in a yield of 2.90%. Diebold (DBD) increased their quarterly dividend 4% to $0.27 per share, giving a new yield of 3.67%.

The popular dividend achiever, Ross Stores (ROST), increased their dividend a whopping 45% per share to $0.16, and left the new yield at 1.36%; not attractive. Colgate-Palmolive increased their dividend by a large percentage too, boosting it up by 20% to hit $0.53 per share. This gives a yield of 2.58%. Finally, the last dividend achiever to be featured, T. Rowe Price (TROW), increased their dividend for the 23^rd consecutive year to $0.27 per share, resulting in a yield of 2.16%.

Popularity: 4% [?]

Bookmark It