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Most casual income investors focus on current yield, which is important. However, if your objective is to build a portfolio of securities with increasing income, then yield on cost is an excellent metric to measure your progress. Yield on cost is simply the annual dividend rate times number of shares owned divided by what you paid for the investment (basis). As a company increases its dividend, your yield on cost goes up.

Working to to increase yield on cost for shareholders, these companies recently announced higher cash dividend payments:

El Paso Pipeline Partners (EPB) owns and operates natural gas transportation pipelines and storage assets. On Jan. 22, the company increased its quarterly distribution of 2.9% to $0.36 per unit. The distribution will be paid Feb. 12, 2010 on all outstanding common and subordinated units to holders of record as of the close of business on Feb. 1, 2010. The yield based on the new payout is 5.76%.

Intel (INTC) is the world’s largest manufacturer of microprocessors (the central processing units of PCs) and produces other semiconductor products. On Jan. 22, the company raised its quarterly dividend by 12.5% to $0.1575 per share. The dividend will be payable Mar. 1, 2010 to stockholders of record as of Feb. 7, 2010. The ex-dividend date is Feb. 4, 2010. The yield based on the new payout is 3.15%.

Rollins (ROL) provides pest and termite control services to residential and commercial customers. On Jan. 26, the company boosted its quarterly dividend 28.6% to $0.09 per share. The dividend will be payable Mar. 10, 2010 to stockholders of record at the close of business Feb. 10, 2010. The ex-dividend date is Feb. 8, 2010. The yield based on the new payout is 1.80%.

National Instruments (NATI) is a provider of software and hardware technology solutions for creating custom measurement and automation systems that are typically used for design, control and test applications. On Jan. 26, the company approved an 8% sequential increase in the quarterly dividend to $0.13 per share. This dividend is payable Mar. 1, 2010, to shareholders of record as of Feb. 8, 2010. The ex-dividend date is Feb. 4, 2010. The yield based on the new payout is 1.70%.

Sunoco Logistics Partners (SXL) is a master limited partnership formed by Sunoco Inc. to acquire, own and operate a group of refined product and crude oil pipelines and terminal facilities. On Jan. 26, the company raised its distribution 2.3% to $1.09 per unit. The distribution is payable Feb. 12, 2010 to unit holders of record as of Feb. 8, 2010. The yield based on the new payout is 6.16%.

Praxair (PX) is the largest producer of industrial gases in North and South America, and the second largest worldwide. The company also provides ceramic and metallic coatings. On Jan. 27, the company boosted its quarterly dividend 13% to $0.45 per share. The dividend is payable Mar. 15, 2010 to shareholders of record as of Mar. 5, 2010. The ex-dividend date is Mar. 3, 2010. PX is a Dividend Achiever and has raised its dividend for 17 consecutive years. The yield based on the new payout is 2.37%.

Holly Energy Partners (HEP) is a master limited partnership formed by Holly Corp. to acquire, own and operate refined product pipeline and terminal facilities. On Jan. 27, the company increased its quarterly dividend to $0.805 per unit. HEP has increased its distribution to unitholders every quarter since becoming a public partnership in July 2004, or 21 consecutive quarterly increases. The distribution will be paid Feb. 12, 2010, to unitholders of record as of Feb. 5, 2010. The ex-dividend date is Feb. 3, 2010. The yield based on the new payout is 7.77%.

Energen (EGN) is a diversified energy company involved in natural gas distribution, and oil and gas exploration and production. On Jan. 27, the company raised its quarterly dividend 4% to $0.13 per share. The dividend is payable Mar. 1, 2010, to shareholders of record as of Feb. 15, 2010. The ex-dividend date is Feb. 11, 2010. EGN is a Dividend Achiever and has raised its dividend for 28 consecutive years. The yield based on the new payout is 1.14%.

SJW (SJW) provides water service to a population of approximately one million people in the metropolitan San Jose, Calif., area. On Jan. 28, the company boosted its quarterly dividend to $0.17 per share. The dividend is payable Mar. 1, 2010 to shareholders of record at the close of business as of Feb. 8, 2010. The ex-dividend date is Feb. 4, 2010. SJW is a Dividend Achiever and has raised its dividend for 28 consecutive years. The yield based on the new payout is 3.07%.

Airgas (ARG) is a leading distributor of industrial, medical and specialty gases and related equipment. The company also distributes safety and other disposable supplies through its network of stores. On Jan. 28, Airgas increased its quarterly dividend to $0.22 per share. The dividend is payable Mar. 31, 2010 to shareholders of record as of Mar. 15, 2010. The yield based on the new payout is 1.88%.

A healthly yield on cost is one that is growing via regular dividend increases. For a list of stocks with a long string of consecutive cash dividend increases, see this.

Full Disclosure: Long INTC. See a list of all my income holdings here.

Source: 10 Dividend Stocks Increasing Yield on Cost