Dividend investors realize a return on their investment either when they sell shares at a higher price compared to what they paid for, or when they receive a dividend. Stock returns alone could be very volatile, as they are impacted by general market conditions, the economy as well as stock market sentiment to name a few. Dividends on the other hand are mostly affected by the underlying financial situation of the company. As a result dividends are the most direct way for companies to generate return to shareholders that is directly tied to the company’s financial performance.
Over the past week, the shareholders of the following companies received higher dividend payments, which were a direct result of the growth in profits and revenues:
Becton, Dickinson and Company (BDX), a medical technology company, develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. This dividend aristocrat raised quarterly distributions by 10.80% to 41 cents/share. This marked the 38th consecutive year in which Becton Dickinson has increased its dividend. Yield: 2.10% (analysis)
McCormick & Company (MKC), engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. It operates in two segments, Consumer and Industrial. This dividend champion boosted quarterly distributions by 8% to 28 cents/share. This was the twenty-fifth consecutive annual dividend increase for the company. Yield: 2.60% (analysis)
Hormel Foods Corporation (HRL), together with its subsidiaries, produces and markets various meat and food products in the United States and Internationally. This dividend champion announced its 45th consecutive annual dividend increase. The company raised distributions by 21.40% to 25.50 cents/share. Yield: 2.10%
The York Water Company (YORW) engages in impounding, purifying, and distributing drinking water in Pennsylvania. It owns and operates two reservoirs, Lake Williams and Lake Redman, which together holds approximately 2.2 billion gallons of water. This dividend achiever raised its quarterly distributions by 2.30% to 13.10 cents/share. This was the fourteenth consecutive annual dividend increase for the company. Yield: 3.30%
South Jersey Industries, Inc., (SJI) through its subsidiaries, engages in the purchase, transmission, and sale of natural gas for residential, commercial, and industrial customers. This dividend achiever raised its quarterly distributions by 10.60% to 36.50 cents/share. The company has raised dividends for 12 years in a row. Yield: 2.80%
Landauer, Inc. (LDR) and its subsidiaries provide technical and analytical services to determine occupational and environmental radiation exposure internationally. The company raised distributions for an eight consecutive year to 55 cents/share. Yield: 3.30%
RGC Resources, Inc. (RGCO), together with its subsidiaries, operates as an energy services company. It primarily engages in the regulated sale and distribution of natural gas in Virginia. The company raised its quarterly dividend by 3% to 34 cents/share. RGC Resources has raised dividends for eight years in a row. Yield: 4.40%
Investors should analyze the stocks above for dividend sustainability and dividend growth potential before initiating a position. Another part of the analysis should include evaluating each company’s ability to generate rising earnings over time.
Disclosure: Long MKC