15 Attractive Stocks for Increasing Dividends

Dividends from a quality, well-diversified portfolio are much more predictable than capital gains and best of all, they are passive. You don’t have to do anything, they just show up in your brokerage account each quarter. Inflation? Not to worry, the good companies routinely raise their dividends well in excess of the inflation rate.

This week, as the weather turns cold the dividend increases heat up. Below are several companies heating up their yields with increased cash dividends:

PPG Industries (PPG) is a global supplier of protective and decorative coatings. October 16th the company increased its dividend 2% to $0.54/share. The dividend is payable on December 11 to shareholders of record November 10. The ex-dividend date is November 6. PPG is a Dividend Aristocrat and has increased its dividend for 38 consecutive years. The yield based on the new payout is 3.62%.

El Paso Pipeline Partners L.P. (EPB) owns and operates natural gas transportation pipelines, storage and other midstream assets. October 19th the company raised its quarterly cash distribution 6% to $0.35/unit. The distribution will be paid November 13, 2009 on all unitholders of record as of the close of business on October 30, 2009. The ex-dividend date is October 28. The yield based on the new payout is 6.15%

Plains All American Pipeline (PAA) engages in interstate and intrastate crude oil transportation, terminalling and storage, as well as crude oil gathering and marketing. October 19th the company boosted its quarterly distribution 2% to $0.92/unit. The distribution is payable on November 13, 2009, to unitholders of record at the close of business on November 3, 2009. The yield based on the new payout is 7.38%

Universal Forest Products (UFPI) engineers, manufactures, treats, distributes and installs lumber, composite, plastic and other building products. October 19th the company bumped its quarterly dividend to to $0.20/share. The dividend is payable on December 15, 2009, to shareholders of record on December 1, 2009. The ex-dividend is November 27, 2009. The yield based on the new payout is 1.03%.

Stepan Co. (SCL) produces specialty and intermediate chemicals. October 20th the company increased its quarterly dividend 9.1% to $0.24/share. This dividend is payable December 15, 2009, to shareholders of record on November 30, 2009. The ex-dividend date is November 26, 2009. SCL is a Dividend Achiever and has increased its dividend for 42 consecutive years. The yield based on the new payout is 1.49%.

Shenandoah Telecom (SHEN) is a diversified telecommunications holding company. October 20th the company raised is dividend to $0.32/share. The dividend will be payable December 1, 2009, to shareholders of record on November 10, 2009. The ex-dividend date is November 6, 2009. SHEN is a Dividend Achiever. The yield based on the new payout is 1.89%.

Ecology and Environment (EEI) is an environmental consulting and testing firm. October 20th the company bumped to $0.21/share. The dividend is payable on or before December 30, 2009, to shareholders of record as of December 8, 2009. The ex-dividend is December 4, 2009. The yield based on the new payout is 2.66%.

Hanover Insurance Group (THG) is an insurance and financial services company. October 20th the company increased its annual dividend 67% to $0.75/share. The dividend is payable December 9, 2009, to shareholders of record at the close of business on November 25, 2009. The board also authorized a change in the company’s dividend payment schedule from a single annual cash dividend to quarterly dividend payments beginning in fiscal year 2010. The yield based on the new payout is 1.80%.

Artesian Resources (ARTNA) distributes and sells water, including water for public and private fire protection. October 20th the company increased its quarterly dividend 5% to $0.1873/share. The dividend is payable November 20, 2009 to shareholders of record at the close of business on November 10, 2009. The yield based on the new payout is 4.52%.

Visa (V) operates a retail electronic payments network. October 21st the company bumped its quarterly dividend by 19% to $0.125/share. The dividend is payable on December 1, 2009 to shareholders of record as of November 16, 2009. The ex-dividend date is November 12. The yield based on the new payout is 0.66%.

Brown & Brown (BRO) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization. October 21st the company increased its quarterly dividend by 3.3% to $0.0775/share. The dividend is payable on November 18, 2009, to shareholders of record on November 4, 2009. The ex-dividend date is November 2. BRO is a Dividend Achiever and has increased its dividend for 17 consecutive years. The yield based on the new payout is 1.66%.

Eaton Vance (EV) is engaged in managing investment funds and providing investment management and counseling services to high-net-worth individuals and institutions. October 21st the company raised its quarterly dividend 3% to $0.16/share. The dividend is payable on November 13, 2009 to shareholders of record on October 30, 2009. The ex-dividend date is November 11. EV is a Dividend Achiever and has increased its dividend for 29 consecutive years. The yield based on the new payout is 2.11%.

Peabody Energy (BTU) is a coal company. October 22nd the company bumped its quarterly dividend 17% to $0.07/share. The dividend is payable on Nov. 27, 2009, to shareholders of record on Nov. 5, 2009. The ex-dividend date is November 3. The yield based on the new payout is 0.64%.

Holly Energy (HEP) operates a system of refined product and crude oil pipelines, storage tanks and distribution terminals. October 22nd the company bumped its quarterly 1.3% to $0.795/unit. The distribution will be paid November 13, 2009, to unitholders of record November 2, 2009. The ex-dividend date is October 29. The yield based on the new payout is 7.93%.

Matthews International (MATW) is a designer, manufacturer and marketer principally of memorialization products and brand solutions. October 22nd the company increased its quarterly dividend 7.7% to $0.07/share. The dividend payable November 16, 2009 to stockholders of record November 2, 2009. The ex-dividend date is October 29. The yield based on the new payout is 0.70%.

Real dividend growth investors are not looking for a flash in the pan, but instead for stocks that can deliver consistent dividend growth. For a list of stocks with a long string of consecutive dividend increases, see this list.

Disclosure: No position in the aforementioned stocks.

Comments

[mbkelly75:]

A very nice list - thank you for your suggestions. Some of these are new to me. I have introduced many people to your list - please keep up the good work.

Oct 23 04:08 PM

[DES:]

I amalways searching for companies that respect shareholders' interest by increasing dividend along with executive pay!

Oct 24 10:21 AM

[oagfy:]

These types of articles can get you in for a hassle at tax time by recommending some MLPs and such that furnish the taxpayer a K1 at the end of the year. Should always state that a K1 will be coming so that the buyer is prepared for a hassle.

Where is Steve Forbes flat tax when we need it?

Oct 24 11:27 AM

[David Van K...:]

The yields on many of these stocks are so low that it will take many years of dividend growth just to reach a modest 4% or so return on original cost. Just because a company raises its dividend every year is a necessary, but not sufficient, reason to consider it for a dividend portfolio.

Oct 24 12:01 PM

[oagfy:]

Of course, if you are investing $100K, its not such a big issue because you can probably afford a tax accountant. But if I had only a few thousand to invest, because of the tax complications, I would rather look at some funds that own a basket of the MLPs, i.e., that issue 1099s at the end of the tax year instead of K1s.

See Forbes Pipeline to Profits - by Richard Lehmann www.forbes.com/forbes/...

On Oct 24 11:27 AM User 47559 wrote:

> These types of articles can get you in for a hassle at tax time by
> recommending some MLPs and such that furnish the taxpayer a K1 at
> the end of the year. Should always state that a K1 will be coming
> so that the buyer is prepared for a hassle.
>
> Where is Steve Forbes flat tax when we need it?

Oct 24 12:13 PM

[Shishir Nigam:]

When I look at dividend stocks, especially those with sub-3% yields, I also look at the potential for capital appreciation. Because if I was looking for sub-3% yields..I could just own one of the many bonds that yield 3% which would be much safer than the stocks. I agree with David's point completely, starting off with a 1% yield and waiting for those yearly dividend raises is not an attractive proposition to me.

On a side note, Peabody Energy (BTU) is one stock where I can see capital appreciation coming together with dividend growth. As a coal producer, BTU is the bashing boy of many investors who see coal usage only for its pollution generation. But the fact of the matter is that coal is still the cheapest and most available source of energy out there. China produces 70% of its electricity from coal (www.eia.doe.gov/emeu/c...) while India produces 53% of it from coal (www.eia.doe.gov/emeu/c...). While the data is slightly dated, coal demand is going to be around for much longer that people are ready to believe.

For more analysis, check out my blog: youngandinvested.com

Oct 24 01:38 PM

[Bob Beamer:]

I agree with David and Shishir. Until I see them cross the 5% mark, it's really difficult for me to get excited versus the due diligence required to avoid unknown future risk. But on the other hand, the future of bond and Treasury markets leave me shivering. I'm still looking for energy and commodities to lead the future...and coal is still one of my favorite short term option trading vehicles...especially as China expands their demand for electricity to drive manufacturing.

Oct 25 03:15 PM

[Dividend Gr...:]

Well, it does help you to monitor dividend increasers over time. Companies cannot control the yield, but can control only the dividend payment. If you find a solid stock yielding 2% which has raised dividends for 10 years in a row and keep raising them every year for the next few decades, you could simpyl add it to your watchlist. If the stock dips on negative news, the economy, some other factor which doesn't affect the company's moat, then you could accumulate it.
Of course the waiting part is the toughest, since you do not know if you are ever going to get into the stock at your required entry price..

Oct 25 07:23 PM

[User 243797:]

Just a point of correction: Universal Forest Products, Inc., issues dividends semiannually, not quarterly as stated above.

Lynn Afendoulis, Director, Corporate Communications
Universal Forest Products, Inc.

Oct 26 10:23 AM

[mbkelly75:]

Hello David - It may not be enough all by itself, but it is one heck of a starting place for your DD and worth it just for that. It is MUCH easier to watch 80 stocks as opposed to 8000 or so around the world. Cramer (whatever you might think of him) had a good point about accidental high yields - If the stock crashes and is still a solid company (broken stock and NOT broken company) - it can be a wonderful time to get into it. Once you have bought the stock with a good yield - simply because the stock price went down - that yield is yours and is locked in. This last crash downwards that ended in March had a HUGE number of great stocks on sale with great yields to lock in. The run-up that we just had made me some great cash from beaten down stocks that paid a great dividend. It will happen again and I will still be here - looking for good stocks on sale.


On Oct 24 12:01 PM David Van Knapp wrote:

> The yields on many of these stocks are so low that it will take many
> years of dividend growth just to reach a modest 4% or so return on
> original cost. Just because a company raises its dividend every year
> is a necessary, but not sufficient, reason to consider it for a dividend
> portfolio.

Oct 26 07:37 PM