10 Companies Raising Their Dividends

Are you confident and secure in your investing process? It appears many people were not. From the famed Canadian dividend investor Derek Foster who sold all his dividend investments in February to co-workers who have moved to the sidelines waiting on the bottom. Many investors who lost confidence and exited the market missed the significant rally over the last couple of months.

Below are several companies showing confidence in the future by rewarding their shareholders with higher cash dividends:

G&K Services (GKSR) rents uniforms, and offers uniforms and other related products for sale. This past week, the company increased its quarterly dividend by 7% to $0.075/share. The dividend is payable on September 24, 2009 to shareholders of record at the close of business on September 17, 2009. The current yield based on the new dividend is 1.31%.

HCC Insurance (HCC) is a multi-line insurer specializes in aviation, marine, medical stop-loss, offshore energy and property and casualty insurance in the U.S. and the U.K. Recently, the company increased its quarterly dividend by 8% to $0.135/ahare. The dividend is payable to stockholders of record on October 1, 2009, and will be paid on or about October 14, 2009. HCC is a Dividend Achiever and has increased its dividend for 13 consecutive years. The current yield based on the new dividend is 2.06%.

Delta Natural Gas (DGAS) distributes or transports natural gas to some 38,000 retail customers in central and southeastern Kentucky; and transports natural gas to industrial customers. Last Friday, the company boosted its quarterly dividend 1.6% to $0.325/share. The dividend will be paid September 15, 2009 to all common shareholders of record as of August 31, 2009. The current yield based on the new dividend is 5.18%.

MGE Energy (MGEE) is the holding company is Madison Gas & Electric, which generates and distributes electricity and distributes natural gas in Wisconsin. This past week, the company raised its quarter dividend to $0.3684/share. The dividend is payable Sept. 15, 2009, to shareholders of record Sept. 1, 2009. MGEE is a Dividend Achiever and Dividend Champion, and has increased its dividend for 33 consecutive years. The current yield based on the new dividend is 4.01%.

Westlake Chemical (WLK) is an integrated manufacturer of petrochemicals, polymers and fabricated vinyl products. Monday, the company raised its quarterly dividend 9.5% to $0.0575/share. The dividend is payable September 17, 2009, to stockholders of record on September 2, 2009. The current yield based on the new dividend is 0.93%.

Alliance Financial (ALNC) provides financial and banking products and services via 29 customer service facilities and a trust administration center in New York. Tuesday, the company boosted its quarterly dividend 7.7% to $0.28/share. The dividend is payable October 2, 2009 to shareholders of record on September 17, 2009. The current yield based on the new dividend is 4.01%.

Guess? (GES) offers one of the world’s leading lifestyle collections of contemporary apparel and accessories for men, women and children. Wednesday, the company raised its quarterly dividend 25% to $0.125/share. The current yield based on the new dividend is 1.56%.

ESSA Bancorp (ESSA) is a holding company of ESSA Bank & Trust, a full-service, community-oriented savings association. Wednesday, the company jumped its quarterly dividend 25% to $0.05/share. The dividend is payable on September 30, 2009. The current yield based on the new dividend is 1.48%.

Altria (MO) Yesterday, the company increased its quarterly dividend 6.4% to $0.34/share. The quarterly dividend is payable on October 9, 2009 to stockholders of record as of September 15, 2009. The current yield based on the new dividend is 7.44%.

Lawson Products (LAWS) primarily distributes replacement fasteners and other parts. Thursday doubled its quaterly dividend to $0.06/share. The dividend is payable October 13, 2009 to stockholders of record September 29, 2009. The current yield based on the new dividend is 1.26%.

Increasing dividends are a positive sign that companies have confidence in the future. For stocks with a long string of consecutive dividend increases, see this list.

Full Disclosure: No position in the aforementioned stocks. See a list of all my income holdings here.

Comments

[oldman:]

the funds that have companies that are dividend growers, achievers, have done so poorly over past couple years, such as DVY, BDV has me wondering if there might be a fund with a short list of companies that would have performed well? Of course, we could buy 10 stocks that might be the best choice for dividends and stock performance that would accomplish that and do much better.

Aug 30 10:14 AM

[David Van K...:]

oldman,

If you are a serious dividend investor, by all means put together your own portfolio of the absolute best, dividend-raising individual stocks that you can find. I think 10-15 stocks is sufficient, others think around 40 is ideal (to get more diversification). You can decide that for yourself.

Funds and ETFs are not the best choices for a dividend strategy, in my opinion, because they invariably hold stocks that have dividends in peril (and in the last couple years, companies in peril). You can do better on your own. Choose an initial yield below which you won't go (I use 3%, or 2.5% if the company has raised its dividend 20+ consecutive years), do your own research to be sure that (1) you like the company's prospects for continuing to raise its dividends and (2) it has an advantageous valuation, and go for it!

Also remember, with a true dividend strategy, you will come to care a great deal less about the actual prices of the stocks as you hold them. That's because the main ball you are keeping your eye on is not the stock's price, but the continually rising stream of dividends. That stream will continue to grow irrespective of the vagaries of the stock's price. If you buy at a favorable valuation, hopefully over time your stocks' prices will hold their own. But that's not the main reason to buy them--the main reason to buy them is to get the dividend stream flowing, growing, and compounding.

Best of luck in your dividend investing.

Aug 30 02:27 PM

[YoYoMama:]

"Funds and ETFs are not the best choices for a dividend strategy, in my opinion, because they invariably hold stocks that have dividends in peril (and in the last couple years, companies in peril). You can do better on your own."

Mmmm...depends. I agree with David's dislike of funds. I absolutely despise them. But not every fund or etf is based on stocks. If you want to diversify with bonds, CEFs or bond ETFs (not funds) are a good choice and are consistent with a dividend strategy.

If you want to hold tax-free bonds, government bonds or multi- or foreign government bonds, there are CEFs that do a splendid job in this area. CEFs such as JGG and JGT provide stability and income (taxable) in my IRA, and I hold tax-free CEFs such as KTF, MAV, OIA, FMN, NMZ and others in my brokerage account. All of these I have mentioned have yields at 6% or more.

Aug 30 05:25 PM

[notsosmart:]

worked great for me. good div paying cos. join their drip program.if you have time on your side & have patience this will enhance your retirement.my yield last year was 7.2% together with my ss gives me a comfortable retirement.dont be fooled into day trading.it only enriches wallst.think for yourself & ignore the talking heads.they are interested in ratings not putting money in your pocket.

Aug 30 07:38 PM