I thought this was a pretty good week for those who like stocks with dividends. According to our Dividend Growers report, there were 50 stocks that increased dividends last week. Unfortunately, there were also 32 stocks that cut their dividends.
It's worth looking at the composition of each list. One thing that jumps out is that of the 50 that increased dividends, 22 were funds, not actual companies. Many of the companies that are on the list, though, were in the energy, financial or REIT sectors.
Similarly, of the 32 stocks that reduced dividends last week, 22 are funds. Interestingly, seven of these dividend cutters are municipal bond funds. With interest rates on government and corporate bonds at historical lows, it is no wonder that bond funds of all types are reducing their payouts rather than chasing yield by going further out on the risk continuum.
What dividend lovers might like, however, is the list of value stocks with increasing dividends, what I call Reasonable Value Dividend Growers. A week ago the list was empty. This week we have the following three stocks:
|Symbol||Name||New Yield||New Dividend||Old Dividend|
|WSH||Willis Group Holdings Limited||3.28%||1.04||N/A|
|MATW||Matthews International Corporation||0.94%||0.32||0.28|
Given that all three are Reasonable Value stocks, our standard measures of PE, Price to Sales, Price to Book, PEG, Debt to Equity and EV to EBITDA are all at pretty modest levels while all are free cash flow positive.
Here is a very quick look at each company:Willis Group Holdings Limited
Willis Group provides a range of insurance and reinsurance broking, and risk management consulting services to clients in various industries, including aerospace, marine, construction, and energy. After several consecutive strong earnings reports, the company's last quarter [see call transcript] showed a sequential decline in both revenue and earnings. Nevertheless, the company was profitable enough to raise its dividend. The company reports most recent quarter earnings on October 27 so we shall see if they get back on track. From the chart below, it looks like expectations are for the company to return to form.
Click to enlarge charts
NewMarket Corporation engages in the petroleum additives and real estate development businesses. The company offers lubricant additives and fuel additives that are used in various vehicle and industrial applications. In addition, the company owns approximately 64 acres of real estate property in downtown Richmond, Virginia. It has operations in the United States, Europe, Asia, Latin America, Australia, India, the Middle East, and Canada.The company has been around since 1887. From the chart below you can see that investors have been pretty positive on the stock.
Matthews International Corporation
Matthews Int'l designs, manufactures, and markets memorialization products and brand solutions for the cemetery and funeral home industries in the United States, Mexico, Canada, Europe, Australia, and Asia. This company was founded in 1850 and, ahem, operates in an industry that will always have solid demand.
In summation, all three of these stocks exhibit increasing dividends, value stock characteristics and pretty attractive stock charts. These stocks should be good news for dividend investors, indeed!
Disclosure: no positions at time of writing