10 Companies: Increased Dividends and Long-Term Returns

It is well-documented that a significant portion of the historical equity returns are a result of reinvested dividends. In Triumph of the Optimists: 101 Years of Global Investment Returns (2002), the authors looked at equity returns from capital gains and dividends from 1900 to 2000. They determined that performance in any given year was driven by capital appreciation, but long-term returns were largely the result of reinvested dividends.

Here are 10 companies looking to increase their long-term returns by raising their cash dividends:

• Interactive Data (IDC) Raises Qtr. Dividend 33% to $0.20/Share (3.48%)
  
• Graco (GGG) Boosts Qtr. Dividend by 3% to $0.19/Share (3.50%)
  
• Hillenbrand (HI) Raises Qtr. Dividend 1.4% to $0.185/Share (4.51%)
  
• Triangle Capital Corporation (TCAP) Increases Dividend 33.3% To $0.40 Per Share (15.46%)
  
• Nucor (NUE) Raises Qtr. Dividend by 9.4% to $0.35/Share (3.14%)
  
• Progress Energy (PGN) Boosts Qtr. Dividend to $0.62/Share (6.20%)
  
• DPL Inc. (DPL) Raises Qtr. Dividend by 3.6% to $0.285/Share (5.49%)
  
• Valspar (VAL) Boosts Dividend from $0.14 to $0.15/Share
  
• Erie Indemnity (ERIE) Raises Qtr. Dividends 2.3% (4.72)
  
• Harsco (HSC) Raises Qtr. Dividend by 2.6% to $0.20/Share (3.20%)
  

NUE was reviewed on 9/1/2008 with a 5 Star-Buy rating. After running the remaining companies through my D4L-PreScreen.xls model, the Dividend Achiever PGN with a NPV of MMA Differential of $4,626 is one that I own and have on my watch list. None of the other companies' NPV of MMA Differentials were close enough to warrant a more complete evaluation.

Disclosure: Long NUE and PGN.

Comments

[BlueOkie:]

I own HSC. The company picks up all the fees for additional cash purchases and dividends, using the transfer agent.

2008 Dec 14 09:01 AM