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Companies that regularly increase dividends are generally more stable. Increasing dividends is the assurance that dividend income retains its purchasing power over time. In this article, I describe three good-yielding stocks that have raised their payouts at a very high rate for the last five years. In my opinion, these stocks can reward an investor a capital gain along with a gratifying income. I recommend readers use this list of stocks as a basis for further research. All the data for this article were taken from Yahoo Finance, Portfolio123 and finviz.com, on November 08, before the market open.

Seagate Technology Plc (NASDAQ:STX)

Seagate Technology designs, manufactures, markets, and sells hard disk drives for enterprise storage, client compute, and client non-compute market applications worldwide.

Seagate Technology has a very low trailing P/E of 10.41 and a very low forward P/E of 7.86. The price-to-sales ratio is at 1.19, and the price to free cash flow for the trailing 12 months is very low at 12.11. The forward annual dividend yield is quite high at 3.23%, and the payout ratio is only 31.3%. The annual rate of dividend growth over the past five years was very high at 25.83%.

The STX stock price is 5.69% above its 50-day simple moving average and 17.33% above its 200-day simple moving average. That indicates a mid-term and a long-term uptrend.

Seagate Technology has recorded strong EPS and dividend growth and moderate revenue growth, during the last five years, as shown in the table below.

Source: Portfolio123

On October 28, Seagate Technology reported its fiscal first quarter 2014 financial results, which missed EPS expectations by $0.01. The company reported revenue of approximately $3.5 billion, gross margin of 28.0%, net income of $427 million and diluted earnings per share of $1.16. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 28.5%, net income of $473 million and diluted earnings per share of $1.29. In the report, Steve Luczo, Seagate's chairman and chief executive officer, said:

The solid financial results we achieved this quarter reflect the ongoing execution of our business model. While the challenges of technology transitions and macro uncertainty are driving us to manage our business conservatively, we remain focused on the fact that the demand for exabytes of storage continues to increase. We continue to invest in our market-leading storage technology portfolio to enable cloud, mobile and open source storage advancement as we believe these market trends represent new and significant opportunities for Seagate.

Seagate Technology has compelling valuation metrics, and considering that the stock is in an uptrend, STX stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Risks to the expected capital gain include a downturn in the U.S. economy, and weakness in the consumer electronics market.

STX Dividend Chart

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Chart: finviz.com

Ensco plc (NYSE:ESV)

Ensco plc provides offshore contract drilling services to the oil and gas industry worldwide.

Ensco has a low debt (total debt to equity is only 0.38), and it has a very low trailing P/E of 10.76 and a very low forward P/E of 8.74. The PEG ratio is very low at 0.73, and the average annual earnings growth estimates for the next five years is quite high at 14.82%. The forward annual dividend yield is quite high at 3.34%, and the payout ratio is only 19.6%. The annual rate of dividend growth over the past five years was very high at 82%.

The ESV stock price is 6.41% above its 20-day simple moving average, 7.67% above its 50-day simple moving average and 3.92% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Ensco has recorded strong revenue and dividend growth during the last year, the last three years and the last five years, as shown in the table below.

The tables below emphasize the Ensco's superior margins, return on capital and stock valuation parameters over the industry median, the sector median and the S&P 500 median.

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Source: Portfolio123

On October 23, Ensco reported its third-quarter results, which beat EPS expectations by $0.06 and missed on revenues. Earnings increased $35 million to a record $379 million. Revenues grew 13% to a record $1.266 billion in third quarter 2013 from $1.124 billion a year ago. The average day rate for the fleet increased 13% to $225,000, mostly due to adding ENSCO 8506 and ENSCO DS-6 to the active fleet, as well as higher day rates for several floaters and an increase in the jackup segment average day rate.

Ensco has recorded strong revenue and dividend growth, and considering its cheap valuation metrics and its strong earnings growth prospects, ESV stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include a downturn in the U.S. economy, and decline in the price of oil and natural gas.

ESV Dividend Chart

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Chart: finviz.com

Sunoco Logistics Partners L.P. (NYSE:SXL)

Sunoco Logistics Partners L.P. engages in the transport, terminaling, and storage of crude oil and refined products in the United States.

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Sunoco has a low debt (total debt to equity is only 0.44), and it has a low trailing P/E of 15.87 and a forward P/E of 20.63. The price-to-sales ratio is very low at 0.50, and the average annual earnings growth estimates for the next five years is quite high at 12%. The forward annual dividend yield is quite high at 3.64%, and the payout ratio is at 51%. The annual rate of dividend growth over the past five years was high at 13.99%.

The SXL stock price is 0.95% above its 20-day simple moving average, 3.93% above its 50-day simple moving average and 9.77% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Sunoco has recorded strong revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the table below.

On November 05, Sunoco Logistics Partners reported its third-quarter financial results. Adjusted EBITDA for the three months ended September 30, 2013 decreased $23 million to $181 million compared to the third quarter 2012. Net income attributable to partners for the third quarter 2013 was $78 million ($0.45 per limited partner unit diluted), compared with $134 million ($1.09 per limited partner unit diluted) for the third quarter 2012.

Additional highlights include:

  • Distributable cash flow of $121 million for the third quarter 2013
  • Twenty-two percent distribution increase to $2.52 (annualized), compared to the third quarter 2012 of $2.07 (annualized)
  • Ended the quarter with a Debt to Adjusted EBITDA ratio of 2.5x
  • Completed a successful open season for Granite Wash Extension crude oil pipeline project
  • Commenced an open season for the Permian Express 2 crude oil pipeline project

In the report, Michael J. Hennigan, president and chief executive officer, said:

As we continue to execute our growth plan, new assets are generating increasing ratable, long-term cash flow to help offset the recent market decline in our crude margin business. The third quarter was an excellent quarter financially for our base, ratable businesses. But as we predicted, softening market conditions in our crude oil acquisition and marketing business reduced our market related earnings.

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Source: company presentation

Sunoco has strong growth record and strong earnings growth prospects, and considering that the stock is in an uptrend, SXL stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include; a downturn in the U.S. economy, and a decline in the price of oil.

SXL Dividend Chart

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Chart: finviz.com

Companies that regularly increase dividends are generally more stable. Increasing dividends is the assurance that dividend income retains its purchasing power over time. In this article, I describe three good-yielding stocks that have raised their payouts at a very high rate for the last five years. In my opinion, these stocks can reward an investor a capital gain along with a gratifying income. I recommend readers use this list of stocks as a basis for further research. All the data for this article were taken from Yahoo Finance, Portfolio123 and finviz.com, on November 08, before the market open.

Source: 3 Good-Yielding Stocks That Have Raised Payouts By At Least 10% A Year For The Last 5 Years