3 Notable Dividend Increases

Ever since Cramer went on the Today Show and advised investors with shorter term goals to sell stocks if they planned to hold for less than five years, he’s been mostly been ostracized in the news. I do believe however that this was a useful piece of advice for anyone that needs the money in less than half a decade from now. Jim Cramer gave another good piece of advice last week when he advised investors who are scared from the enormous volatility in the stock markets to simply purchase dividend paying stocks. The reasoning behind that is that no matter what the daily range of the S&P 500 is, dividend stocks should still be viewed as a business governed by fundamentals and not some sort of fancy lottery tickets. No matter how volatile your stocks are, as long as they are fundamentally sound and have a business model that supports increasing their dividend payments over time, just like my favorites in the dividend aristocrats and achievers lists, you have nothing to worry about.

Despite all the record volatility and record price whipsaws up and down, there were several stocks that showed enough confidence in their future earnings ability to declare modest dividend increases.

PPG Industries (PPG) declared a regular quarterly dividend of 53 cents a share, an almost 2% increase over PPG’s prior quarterly dividend of 52 cents a share. PPG Industries is a dividend aristocrat as well as a component of the S&P 500 index. It has been increasing its dividends for the past 36 consecutive years. PPG currently yields 4.70 %

VF Corporation (VFC) Board of Directors declared a quarterly cash dividend of $.59 per share, an increase of $.01. It is a dividend aristocrat as well as a component of the S&P 500 index. It has been increasing its dividends for the past 34 consecutive years. VFC currently yields 4.20%.


Kinder Morgan Energy Partners, L.P. (KMP) increased its quarterly cash distribution per common unit from $0.99 to $1.02. Kinder Morgan Energy Partners, L.P. owns and manages energy transportation and storage assets in North America. The partnership currently yields 8.70%.

Of these three stocks, only KMP looks promising in terms of dividend growth. Check out my analysis of the stock for your reference.

Disclosure: Author is long KMR.

Comments

[eagleputt:]

Oil majors offer good dividend returns. Examples:
Shell(RDSA) is around 6%; BP at 8%. These companies are solid; cars are here to stay and energy for all purposes is not going to be replaced by alternatives in my lifetime.

Obama's threat to take away oil profits will become a non-issue with crude prices at or below $70 and gasoline below $2.50.

2008 Oct 19 08:50 PM

[notsosmart:]

check out FRO & NAT. check dividend history.

2008 Oct 20 11:23 AM

[henarl:]

Not only should you concentrate on high dividends but you should also be selling out of the money covered calls to take advantage of the high volitility. This is a traders market and should be worked for income rather than capital gains. Notsosmart is right about the tanker stocks - they are spectacular income stocks, both for income and covered calls.

2008 Oct 20 04:05 PM

[whisperonth...:]

I'm in agreement on FRO, just got into NAT (and thus hoping to see some good dividends). As far as I'm concerned with the way stocks have been rolling around lately, with these dividends, even just staying steady is an improvement. The overall value may not be rising but when the market finally settles down we should have more shares and therefore increase more rapidly. And for those who prefer to just take the dividends home, that too can be considered an income booster.

2008 Oct 21 06:33 PM