As many income investors know, dividend investing can result in the guarantee of income, or in certain cases where the investor has a dividend reinvestment account, more shares. I personally prefer the latter, but that's just me. In the case of the three stocks featured, the dividend increases shouldn't be the only factors taken into account before establishing a position.
York Water Co. (YORW) announced a 3.5% or $0.0047/share increase on November 20, to its current dividend of $0.1336/share. It also announced the date of its regular dividend distribution, which is now set for January 15th to shareholders of record as of December 15th. As a result of the increase, the company now yields 3.2% ($1.52) on an annual basis, which is then broken down and distributed to shareholders each quarter.
When it comes to York Water the dividend hike isn't thing that potential investor should consider a positive catalyst. In my opinion there are three more variables that need to be taken into account. The first catalyst to consider is the fact the stock is trading at a 3.09% discount to its current 50-DMA and a 4.13% discount to its current 200-DMA.The second variable to consider are the company's profit (21.95%) and operating (48.89%) margins which have been quite solid over the last 12 months. Lastly, and most importantly, is the recent announcement the company has made with regard to the acquisitions of York Starview, LP and Section A Water Corp. On November 7th and coupled with the company's most recent quarterly report, York Water announced the closings of both transaction and noted the immediate effect both have already had on the company's performance.
Lancaster Colony Corp. (LANC) announced a 5.6% or $0.02/share increase on November 19, to its current dividend of $0.36/share. It also announced a special dividend of $5.00/share to be paid on the same date of its regular dividend distribution, which will be December 28th to shareholders of record as of December 10th. As a result of the increase, the company now yields 2.13% ($1.52) on an annual basis, which is then broken down and distributed to shareholders each quarter.
For potential investors of Lancaster Colony Corp., the dividend hike isn't the only catalyst long-term investors should consider. In fact, I think that potential investors need to consider the company's outlook as the primary catalyst moving forward. Chairman and CEO John Gerlach, noted that the company's outlook back in August was quite positive and reiterated a similar sentiment earlier this month: "We anticipate that Specialty Foods operating income may initially benefit from modestly higher pricing and from overall commodity costs beginning the year somewhat below year ago levels. We also believe that the strength of our market positions, along with a solid and flexible balance sheet, leave us well positioned to support future growth."
International Game Technology (IGT) announced a 16.7% or $0.01/share increase on November 19, to its current dividend of $0.06/share. It also announced that the date of its regular dividend distribution, which will be December 31st to shareholders of record as of December 19th. As a result of the increase, the company now yields 2.15% ($0.28) on an annual basis, which is then broken down and distributed to shareholders each quarter.
When it comes to International Game Technology there are a few other things to consider aside from the company's most recent dividend hike. The first catalyst to consider is the fact the stock is trading at a 2.15% premium to its current 50-DMA and a 1.01% discount to its current 200-DMA. The second and most important thing to consider is the company's mobile presence and the positive impact it has demonstrated on both growth and revenue. According Leigh Nissim, IGT's Commercial Director for its Interactive Segment, "The size of the mobile market is expanding by the day and a selection of superior branded content and consistently high performing games helps make IGT a driving force behind this growth. Choosing the right casino game supplier in the world of mobile gaming is crucial - our experience, expertise and compliance record at IGT is second to none."
For potential investors looking to establish a position in York, Lancaster or International Game Technology, I'd continue to pay very close attention to the overall state of the U.S. economy, as certain factors could have an effect on the overall pricing structure at all three companies. Based on the streak all three of the companies have established in terms of consecutive dividend payouts, I'd look to initiate a small to medium sized position given their current yields of 3.20%, 2.13% and 2.15%, respectively.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.