Pepsico and 6 Other 'Dividend Increasers'

Dividend investors love companies that can sustain consistent dividend growth through the good times and the bad. For three years in a row PepsiCo (PEP) has been named to the Dow Jones Sustainability Index in recognition of the company’s economic, environmental and social performance.

On May 6th, PEP extended its string of dividend increases to 37 consecutive years by announcing a 6% increase in the annual dividend to $1.80/share. The quarterly dividend of $0.45 is payable June 30, 2009, to shareholders of record on June 5, 2009.

PepsiCo Chairman and CEO Indra Nooyi said:

“We are pleased to announce our thirty-seventh annual dividend increase, reflecting the strength of our cash flow and balance sheet. Even in this difficult economy, we are committed to return cash to our shareholders while continuing to invest in the long-term growth of our business.”

Based on the new rate, PEP is currently yielding 3.64%. (Analysis)

Below are several other companies, like PEP, that are returning cash to their shareholders with higher cash dividends:

• Alcon (ACL) increases its annual dividend 39% to $3.49, yielding 3.63%
• Spectra Energy Partners (SEP) raises its quarterly dividend 11.4% to $0.39/share, yielding 6.90%
• Tower Group (TWGP) boosts it quarterly dividend 40% to $0.07/share, yielding 1.04%
• Avista (AVA) bumps its quarterly dividend 16.7% to $0.21/share, yielding 5.04%
• RLI (RLI) increases its quarterly dividend 3.8% to $0.27/share, yielding 2.30%
• Expeditors Int’l of Washington (EXPD) raises quarterly dividend 19% to $0.19/share, yielding 2.26%

It is great to see a substantial number of companies raising their dividends and keeping alive the momentum that was started last week. For more companies with a long string of consecutive dividend increases, see this list.

Full Disclosure

: Long PEP. See a list of all my income holdings here.

Comments

[a. palmer jr.:]

What's with the Pepsico boycott? I used to go to restaurants and ask for Coke and they only had Pepsi. Now these same restaurants, when you ask for Pepsi, thinking that's all they have, say "Coke only" and usually with a sneer on their faces. Must be some kind of morality thing!

May 10 11:27 AM

[notsosmart:]

the yields are not that great.

May 10 11:27 AM

[snopake:]

I know it would take a lot of time to do actual research, but you could have tried clicking on your own link to see what it says EXPD's yield is. There you would have found that the pre-hike rate was $.32 per year, for a yield of about 1.00%. With the increase (and the stock's plunge on Friday), it's about 1.13%.

The trick is this: they pay semi-annually, not quarterly.

May 10 12:02 PM

[L S:]

Just do your research. Past history can't be your sole guide. Just because a company has a lengthy history of keeping their dividend steady (or increasing it) does not necessarily mean it will continue. This is particularly true in these turbulent times. Case in point: Dow Chemical had kept a string of nearly 100 years of holding or raising their quarterly dividend. That is... until Q1 of 2009 when their dividend was cut by nearly 2/3.

May 11 07:46 AM