Six Dividend Stocks Raising the Bar

The stock market averages keep responding in a way that shows investors are expecting the worst in terms of profitability for most major US and Global corporations. Some pundits are getting bullish, while others are getting increasingly bearish. The odds of both camps being correct are slim to none. With this confusing information, what are investors supposed to do?
My main recommendation for buy and hold investors is to ignore all the day to day chatter and forecasts, since noone can predict enough market movements in order to make money. The best course of action to take is to assume a long-term strategy of buying stocks that keep increasing their dividends even during the current uncertain economic and market conditions.

CVS Caremark Corporation (CVS) announced that its Board has approved a 10.5% increase in its quarterly dividends to $0.07625 per common share. CVS Caremark Corporation has consistently increased its dividends since 2003. The stock currently yields 1.10%.

Cintas Corporation (CTAS) announced that its Board has approved a 2% increase in its annual dividends from $0.46 to $0.47 per common share. Cintas Corporation is a dividend achiever, which has consistently increased its dividends for 25 years. The stock currently yields 2.00%. Over the past 8 years the company has managed to double its dividends.

Enterprise GP Holdings L.P., (EPE), which is engaged in the ownership of general and limited partner interests of publicly traded partnerships engaged in the midstream energy industry and related businesses, announced that its Board has approved an increase in its quarterly dividend to $0.47 per unit. Enterprise GP Holdings L.P. has consistently paid and increased its dividends every single quarter since 2005. The partnership shares currently yield 9.20%.

Linear Technology (LLTC) announced that its Board has approved an increase in its quarterly dividend from $0.21 to $0.22 per common share in an effort to return value to shareholders. Linear Technology is a dividend achiever, which has consistently increased its dividends since 1992. The dividend growth has been astounding, as LLTC has managed to double its dividend payments to shareholders every three years on average for the past 16 years. The stock currently yields 3.80%.

Monsanto Company (MON), announced that its Board has approved a 10% increase in its quarterly dividend from $0.24 to $0.265 per common share. Monsanto Company has consistently increased its dividends since 2001. In fact the new dividend payment represents a 489% increase in comparison to the first dividend payments in 2001 of $0.045/share. The stock currently yields 1.20%.

Family Dollar Stores, Inc. (FDO) announced that its Board has approved a 8% increase in its quarterly dividend from $0.125 to $0.135 per common share. Family Dollar Stores, Inc.is a dividend aristocrat that has consistently increased its dividends for thirty-three consecutive years. The stock currently yields 1.80%.

LLTC looks like a promising dividend growth stock in order to gain some technology exposure in my dividend stock portfolio. I will add it to my list for further research. FDO looks promising in the current economic environment, however due to its low yield I would only consider initiating a position there on dips below $18.

Disclosure: Author is long FDO

Comments

[donzelion:]

Long-term, Monsanto makes the most sense to me, but at P/Es of 19, it still seems a tad expensive right now. For dividend purposes, the yield is less than I get from cash in my money market account. Monsanto makes (among other things) specialty seeds - but for every farmer, one has to plant in the right season, and I don't think we're there quite yet.

Jan 19 09:08 AM

[legmaker:]

Monsanto looks to be the most solid. Farmers cannot pull up a crop if they dont have seeds, although they can delay using fertilizer. Not only have they beat number by quite a bit recently, they have been beaten up recently with respect to stock price. The new seeds hitting the market and round up ready technology should still increase revenues for sometime going forward. Great article.

Jan 19 07:29 PM

[Teutonic Kn...:]

In the current climate where almost everything sinks, and rushing into buying is like catching a falling knife, a portfolio strategy of accumulating good solid dividend stocks sounds prudent.

If the underlying dividend stock price stays low during the next 12-to-18 months, automatic dividend re-investing into a low equity price seems a winning strategy during troubled times.

Jan 20 11:41 AM

[ArtfulDodger:]

LLTC used to be a debt free company, but in the past couple of years it's taken on massive amounts of debt.

It doesn't make sense to me that this company raised its dividend.

I'd have to avoid it because of the debt.

Jan 20 05:58 PM

[Old Trader:]

I'm not certain that trumpeting the fact that a company has raised its dividend for 4 or 5 years is that big a deal. I'd think a decade of dividend increases would be an absolute MINIMUM to be worthy of consideration, and I'd actually prefer to see a lengthier period of increases.

Jan 20 10:36 PM

[Baby Bear:]

LLTC only took on debt in order to buyback huge amounts of stock (don't remember exactly but about 1/4 to 1/3 of outstanding stock).

They attempted to take advantage of a great interest rate on convertibles.

One can argue how smart that was to do, but they had the shareholder in mind when instituting the transaction.

The debt will be easily handled and the company has already started paying down the amount of debt taken on convertibles (see most recent quarter)


On Jan 20 05:58 PM ArtfulDodger wrote:

> LLTC used to be a debt free company, but in the past couple of years
> it's taken on massive amounts of debt.
>
> It doesn't make sense to me that this company raised its dividend.
>
>
> I'd have to avoid it because of the debt.

Jan 21 11:48 AM

[Diegojames:]

CVS is where the consumer spends in recession. CVS has everything people want, need and can afford. And if they work for a company that gives benefits then a drug plan will be there.
Expect dividend to be safe and to grow. And CVS will had to its Market Share....
Buy CVS on any dips below 26.50 if you can.
Diegojames

Jan 22 02:37 AM

[legmaker:]

After stating today they will be doubling their gross profit by 2012, it is hard not to get real excited about this company. The stock price is still intriguing, and seems no one is taking them serious even as they continue to outperform and should be releasing their drought resistant corn seed soon. God Bless

Feb 05 01:03 AM