9 Dividend Stocks Sending More Cash to Shareholders

We all are looking for the perfect dividend stock. In a utopian world, the perfect dividend stock would be one that is both high-yield and provides a high dividend growth rate. Its share price would appreciate ratable with its increasing dividend. All of this would be driven by increasing earnings and cash flow.

Though they are not perfect, the stocks below did recently reward their investors with higher cash dividends:

Wynn Resorts (WYNN) is involved in the design, development, financing and construction of gaming projects in Las Vegas and Macau. November 9th the company declared a special cash dividend of $4.00/share. This dividend will be payable on December 3, 2009, to stockholders of record on November 19, 2009. The stock will begin to trade ex-dividend on November 17, 2009. The company’s Board of Directors also approved the commencement of a regular cash dividend program, beginning in 2010. This regular cash dividend will be $0.20 per share of common stock for the first quarter of 2010. The yield based on the new payout is 1.22%.

Baxter (BAX) is a global medical products and services company. November 10th the company increased its quarterly dividend 12% to $0.29/share. The dividend is payable on January 5, 2010, to shareholders of record as of the close of business on December 10, 2009. The ex-dividend date is December 8. The yield based on the new payout is 2.02%.

ADP (ADP) provides a broad range of data processing services. November 10th the company increased its quarterly dividend 3% to $0.34/share. The dividend is payable on January 1, 2010 to shareholders of record at December 11, 2009. The ex-dividend date is December 9. ADP is a Dividend Aristocrat and has increased its dividend for 34 years. The yield based on the new payout is 3.15%.

Tennant (TNC) designs, manufactures, and markets cleaning solutions. November 10th the company raised its quarterly dividend 8% to $0.14/share. The dividend is payable on December 15, 2009, to shareholders of record November 30, 2009. The ex-dividend date is November 26. The yield based on the new payout is 1.90%.

Cliffs Natural Resources (CLF) is a mining company that produces iron ore pellets and supplies metallurgical coal to the steelmaking industry primarily in North America. November 10th the company boosted its quarterly dividend more than 100% to $0.0875/share. The dividend is payable on Dec. 1, 2009, to shareholders of record as of the close of business on Nov. 20, 2009. The yield based on the new payout is 0.90%.

DeVry (DV) offers career-oriented degree programs, preparatory coursework for the CPA and CFA exams, and medical, veterinary, and nursing education. November 11th the company increased its dividend 25% to $0.20/share. Payable semi-annually, the next dividend payment of $0.10/share will be made on Jan. 7, 2010, to common stockholders of record as of Dec. 11, 2009. DV also announced that its board of directors authorized a third share repurchase program of $50 million to commence upon completion of the existing $50 million program. The yield based on the new payout is 0.37%.

Span-America Medical (SPAN) manufactures and distributes a variety of polyurethane foam products for the medical and custom products markets. November 11th the company raised its quarterly dividend 11% to $0.10/share. The dividend is payable December 4, 2009, to shareholders of record on November 20, 2009. The yield based on the new payout is 2.47%.

MDU Resources (MDU) is involved in electric and natural gas distribution, natural gas storage, gathering and transmission, construction materials and mining, and oil and natural gas production. November 12th the company increased the quarterly dividend to $0.1575/share. The dividends are payable January 1, 2010 to stockholders of record December 10, 2009. The ex-dividend date is December 4, 2009. MDU is a Dividend Achiever and has increased its dividend for 18 consecutive years. The yield based on the new payout is 2.87%.

AmerisourceBergen (ABC) is a distributor of pharmaceutical products and related health care services. November 12 the company raised it’s quarterly dividend 33% to $0.08/share. The dividend will be payable December 7, 2009, to stockholders of record at the close of business on November 23, 2009. The yield based on the new payout is 1.33%.

The first step for a stock to become a perfect dividend stock is to raise its dividends each and every year. For a list of stocks with a long string of consecutive dividend increases, see this list.

Full Disclosure: Author has no positions in the aforementioned stocks. See a list of all my income holdings here.

Comments

[prudentinve...:]

Interesting to see a company which has a dividend yield of 0.37% described as a "Dividend Stock" !

Nov 13 07:50 AM

[StockMaster...:]

I can't really get excited about those stocks for dividends

Nov 13 10:23 AM

[mbkelly75:]

DV pays a low dividend, but it IS still a dividend. You might take notice of the share buybacks at the same time. This is another way to give value to the investor and you can judge the effect of it by looking at their market cap - getting a percentage of the buyback on that cap and adding that percentage to the dividend percentage. That 50 million buyback that they just authorized is the 3rd one. Let us be conservative and just use one of them to show the point. Their Market Cap is 3.79 Billion. The buyback is 50 million. The percentage is around 1.32% making the dividend more like 1.69%. Still not huge but their payout ratio is only 6% - even after a 25% raise in that dividend that is paid out. Their Total Return over the last 5 Years is a very impressive 243.63%. They have not been paying a dividend long enough to show any kind of a long term record, but it looks like they are doing a good job for their investors. They have NO long term debt. I would prefer a quarterly dividend, but that is just my preference.


On Nov 13 07:50 AM prudentinvestor wrote:

> Interesting to see a company which has a dividend yield of 0.37%
> described as a "Dividend Stock" !

Nov 13 10:26 AM

[mbkelly75:]

D4L - nice catch on WYNN. It is a best-of-breed stock and I had not seen the news about the dividend yet. Thank you - please keep up the good work.

Nov 13 10:28 AM

[Peter Mycro...:]

I have taken the list of nine stocks and put them through a free cash flow analysis. With dividend plays you want to always make sure that the dividend that is paid out can be covered by the company’s free cash flow otherwise they will need to borrow money to pay you. All the company’s on this list can cover their dividends through their free cash flow.

My key ratios for analysis are price to free cash flow (PFCF) and Free Cash Flow Return on Invested Capital (FROIC) as well as debt to equity.

When investing I look for PFCF below 15 times and FROIC above 20%+. When you are lucky enough to find a combination of the two you find a perfect balance of growth + value and you get capital appreciation through capital preservation.

For those who don't know;

PFCF =Market Price/ (Cash flow per share-Capital Spending per share)

FROIC = FCF per share/ (long term debt per share + shareholders equity per share)

FROIC basically tells you how much return in free cash flow a company generate for every dollar of Total Capital they employ.

I consider FROIC the primary determining factor in identifying growth companies as you can compare every company (except financials) on an equal basis. The question I ask every company I analyze is = how much return (in percent) in FCF are you going to give me for every dollar of total capital you invest?

The following are 2010 estimates (Data Source= Value Line)

WYNN RESORTS (WYNN)

FCF PS = $ 1.00
TCAP PS = $ 49.75
FROIC = 2.00%
PRICE TO FCF = 69.22

BAXTER INTERNATIONAL (BAX)

FCF PS = $ 3.60
TCAP PS = $ 20.00
FROIC = 18.00%
PRICE TO FCF = 15.28

AUTOMATIC DATA PROCESSING (ADP)

FCF PS = $ 2.40
TCAP PS = $ 13.00
FROIC = 18.46%
PRICE TO FCF = 18.12

CLIFFS NATURAL RESOURCES (CLF)

FCF PS = $ 2.05
TCAP PS = $ 22.05
FROIC = 9.29%
PRICE TO FCF = 19.85

DEVRY (DV)

FCF PS = $ 2.35
TCAP PS = $ 16.19
FROIC = 14.51%
PRICE TO FCF = 22.63

TENNANT COMPANY (TNC)

FCF PS = $ 1.70
TCAP PS = $ 12.70
FROIC = 13.39%
PRICE TO FCF = 17.29

SPAN AMERICA MEDICAL (SPAN) (no 2010 estimates available for this company)

FCF PS = $ NA
TCAP PS = $ NA
FROIC = % NA
PRICE TO FCF = NA

MDU RESOURCES (MDU)

FCF PS = $ 0.70
TCAP PS = $ 25.95
FROIC = 2.69%
PRICE TO FCF = 31.67

ALLIANCEBERNSTEIN (AB)

FCF PS = $ 2.15
TCAP PS = $ 18.87
FROIC = 11.40%
PRICE TO FCF = 12.55

FROIC gives me a real return on Main Street and if I can get a 20%+ return on Main Street and at the same time buy a stock that is selling for less than 15 times its FCF then there is a very high probability that it should be very successful investment.

By choosing 20%+ as my minimum FROIC I have built a portfolio of 29 holdings for my clients that has a combined portfolio FROIC of 32% and sells as a group for 12.35 PFCF.

As for PFCF I came up with the 15 or less number as being Ideal after performing a 58 year backtest. To view the backtest just click the link below.


mycroftresearch.com/up...


Disclosure: No Position in any of these stocks.

The Fine Print: As Registered Investment Advisors, we see it as our responsibility to advise the following: We do not know your personal financial situation, so the information contained in this communiqué represents the opinions of Peter "Mycroft" Psaras, and should not be construed as personalized investment advice.

It should not be assumed that investing in any securities we are investing in will always be profitable. We take our research seriously, we do our best to get it right, and we “eat our own cooking,” but we could be wrong, hence our full disclosure as to whether we own or are buying the investments we write about.

Nov 13 02:27 PM

[Advill:]

Sorry mister ....advertising is not allowed in this site, you has been posting your comment (quite superficial by the way) in all the comments articles of SA.

I reported you for abuse.


On Nov 13 02:37 PM PARTICULARMEN wrote:

> Warren Buffett: The financial panic is over (Reuters headline)<br/>
>
> Why Warren Buffett pays $34 billion (market cap) for BNI instead
> max. $24 billion when market DJIA was at 6500?
> Why BRK depends on Goldman Sachs bankers?
> Why Buffett is buying stuff at the peak of the market instead of
> waiting to buy cheaper in a very short time ?
> Does he think DJIA at 10000 is "cheap" ?
> Why he wanna split his highly priced BRK.B shares and make it appeal
> to average John Q. Public investor ?
> He buys BNI at the top to calm the matket panic and "make you buy
> too".
> Why BRK is not selling all their stuff, when W. Buffett knows very
> clear that DJIA will be 5000 soon and will bottom only at 2000 that
> will hit him too?
> Find out in WARREN BUFFET? link
> snipr.com/t7w23

Nov 13 07:18 PM

[bobbybutte:]

author has right philosophy about dividends but as a person who has become financially independent solely from buying and holding div stocks and reinvesting the dividends it is clear we do not share teh same philosophy in choosing our filters to screen out the best of the best

All you dividend investors keep on the path

Financial independence is right around the corner
I know because it happened to me

Nov 14 10:36 AM

[AnonAnon:]

WYNN and the likes are very unpredictable for dividends, in fact almost went bankrupt last year. You need the likes of KO, PG that will do more or less the same decade after decade after decade.

Nov 14 11:28 AM

[bobbybutte:]

trick is not finding the RIGHT dividend stock

The key is finding the right stock at the RIGHT PRICE

As a person who has achieved financial independence SOLELY from allocating capital and have writtena book and newsletter based on buffett's teaching you would KNOW this.peace

Nov 15 10:53 AM

[Plan B Econ...:]

Here's a list of S&P 500 stocks with 6%+ dividend yields:

www.planbeconomics.com.../

Nov 15 01:07 PM

[The Lonely ...:]

Wow, all these so-called dividend stocks are overvalued and have paltry dividends. Here are 9 that are better!

BKS
CATO
ELNK
FL
LLY
MO
NOC
NTDOY
PTNR
SUP
TKPHY
VIVDY

Sorry that was 12... the list of dividend payers that are better than those in this article is nearly endless. Devry with a yield of 0.37%? Really?

Nov 15 10:11 PM