Nine Companies Increasing Dividends

I typically try to summarize each week’s dividend increases in the news by outlining the company that raised distributions and whether it is an achiever or not. Just because I list a stock in an article however does not mean I am recommending it. Identifying the dividend raisers each week however helps me in finding out quality dividend stocks which either should be bought on dips or after they have raised distributions for at least a decade. Even if a list contains some interesting stock ideas however, this does not mean that one should blindly enter a position in such securities. Only after one understands whether such a stock could grow earnings into the future in order to support a growing dividend, should they start accumulating a position over time.

Questar Corp (STR), which engages in gas and oil exploration and production, midstream field services, energy marketing, interstate gas transportation, and retail gas distribution businesses, increased its quarterly dividend by 4% to 13 cents per share. Questar Corp is a dividend aristocrat, which has raised distributions for 30 consecutive years in a row. The stock currently yields only 1.30%.

Stryker Corporation (SYK), which operates as a medical technology company worldwide, has declared a cash transition dividend of $0.10 per share, payable December 16, 2009, to shareholders of record at the close of business on November 18, 2009. The transition dividend will increase the total dividends paid in 2009 to $0.50 per share, up 52% from the $0.33 per share paid in 2008. Subject to further action by the Company's Board of Directors, the Company anticipates the first quarterly dividend to be paid in January 2010 at a targeted quarterly rate of $0.15 per share. Stryker Corporation is a dividend achiever, which has raised distributions for 16 consecutive years in a row. The stock yields 1.30%, based off its new quarterly rate of 15 cents/share.

Middlesex Water Company (MSEX), which operates as a food company in North America and internationally, increased its quarterly dividend by 2.5% to 20.50 cents per share. Middlesex Water Company is a dividend champion, which has raised distributions for 36 consecutive years in a row. The stock currently yields 4.60%.

Inergy Holdings GP LLC (NRGP), the general partner of propane supplier Inergy LP, on Monday said it will increase its quarterly cash distribution 9 percent for the three-month period ended Sept. 30. The company will raise its distribution to 85 cents per limited partner unit, up from the previous quarter's distribution of 78 cents per limited partner unit. Separately, Inergy GP LLC (NRGY), managing general partner of Inergy LP, said its board of directors increased its quarterly cash distribution to 67.5 cents per limited partner unit for the quarter ended Sept. 30. This represents the 32nd consecutive quarterly increase and an approximate 6.3% increase over the distribution for the same quarter of the prior year. Inergy, L.P., with headquarters in Kansas City, Mo., is among the fastest growing master limited partnerships in the country. The company’s operations include the retail marketing, sale, and distribution of propane to residential, commercial, industrial, and agricultural customers. Inergy Holdings GP LLC (NRGP), currently yields 7% , while Inergy GP LLC (NRGY) yields 8.80%.

The following stocks announced their intent to raise distributions to shareholders:
Visa, Inc. (V) which operates retail electronic payments network worldwide increased its quarterly dividend by 19% to 12.50 cents per share. The stock currently yields 0.70%.

Strayer Education Inc. (STRA), which provides various academic programs in traditional classroom courses and online via the Internet, increased its annual dividend by 50% to $3 per share. Strayer Education Inc. has consistently raised distributions since 2005. The stock currently yields 0.90%.

SouthWest Water Company (SWWC), which provides water and wastewater related services principally in the United States, doubled its quarterly dividend to 5 cents per share. SouthWest Water Company is a dividend achiever. The weird part here is that the previous dividend of 2.5 cents/share was below the quarterly dividend of 6 cents/share paid in 2008. The stock currently yields 3.70%.

American Financial Group (AFG), which engages in property and casualty insurance business in the United States, increased its quarterly dividend by 5.8% to 13.75 cents per share. American Financial Group has consistently raised distributions only since 2006. The stock currently yields 2.10%.

Disclosure: None

Comments

[No Free Cake:]

You said MSEX operates as a food company. Hmmmm.

Yahoo says this:
"Middlesex Water Company, together with its subsidiaries, owns and operates regulated water utility and wastewater systems in New Jersey and Delaware."

A regulated water utility sounds like, well, a utility. I think of food companies as consumer sector.

Nov 02 11:55 PM

[User 458794:]

To: Dividend Growth Investor (not sure how to reach you otherwise), or other contributor:
Question: Is there a highly rated (Morningstar 5-star) Mutual Fund you would suggest as a core holding for my Roth IRA which contains the top Dividend Growth U.S. companies that you mention often, that is also no load and low fees? This would hopefully anchor a portfolio of individual dividend stocks. Looking at a 10 to 15 year time frame now. I am having trouble looking for this data myself. Thanks.

Nov 03 08:52 AM

[gjg49:]

user458794:
vanguard has a relatively low fee (0.35% per year) fund called the dividend appreciation index fund (vdaix) that mimics the index of the s&p dividend achievers. mstar gives it 4 stars, but i didn't check out who mstar benchmarks the fund against. one caveat, firms like wells fargo and pfizer cut their dividends during 2009, but s&p only creates the list once per year; hence, vanguard includes them in the fund just as s&p currently includes them in the list of dividend achievers--you and i know with virtual certainty that s&p will exclude them in the 2010 list but vanguard will not eliminate the position until the new list comes out (ironically, wells fargo is the largest holding according to vanguard's web site.)

vanguard also has an actively managed fund, the dividend growth fund (vdigx) that gets 5 stars from mstar, has slightly lower fees (0.32% per year), and also offers a higher current yield than vdaix.

by the way, if you prefer etfs, vanguard also offers vig, an etf that should tracks the same index used by vgaix but only costs 0.24% per year. mstar gives vig 4 stars.


On Nov 03 08:52 AM User 458794 wrote:

> To: Dividend Growth Investor (not sure how to reach you otherwise),
> or other contributor:
> Question: Is there a highly rated (Morningstar 5-star) Mutual Fund
> you would suggest as a core holding for my Roth IRA which contains
> the top Dividend Growth U.S. companies that you mention often, that
> is also no load and low fees? This would hopefully anchor a portfolio
> of individual dividend stocks. Looking at a 10 to 15 year time frame
> now. I am having trouble looking for this data myself. Thanks.

Nov 03 04:42 PM

[Adonis:]

I fully agree with gjg49. We manage many IRA's with a dividend growth strategy and we own all three that was mentioned. They have performed very well in the past and I believe that the quality names that they own will continue to perform (and increase dividends).

Nov 04 08:42 AM

[Tom S.:]

to 458794: You may also want to check out DRIPX. It's a 4-star fund focused on quality dividend growth.

Nov 05 10:41 AM

[Bert Mariani:]

Investing in "aristocrat dividend" stocks that pay less than 3% does not make any sense whatsoever when investing for an steadily increasing dividend income stream. The only company on your list that I would by is NRGP / NRCY beacuse the dividend is substantial at 7-9% and have a been steadily increasing. Its the absolute Dollar Amount of dividends that is absolutely important. Not the percent increase that increases the yield to a measly 1-2-3%.

Its how much of the cash dividend that you bring to the grocery store that counts

Nov 05 12:13 PM