The only way to generate a return on a stock that does not pay dividends is to sell it. Once you sell that stock, you have a taxable event where you have to pay taxes on your whole gain all at once. Contrast this to dividend paying stocks, where a consistent dividend payment spreads out your returns and the taxable liabilities associated with it over time.
Several consistent dividend growth stocks announced increased distributions to shareholders, like clockwork. These increased distributions would surely increase the return on investment, particularly at a time when stock prices have been in a decline for six consecutive weeks.
Target Corporation (NYSE:TGT) operates general merchandise stores in the United States. The company’s Board of Directors approved a 20% increase in its quarterly distribution to 30 cents/share. This marked the 44th consecutive annual dividend increase for this dividend aristocrat. Yield: 2.60% (analysis)
C. R. Bard, Inc. (NYSE:CR) , together with its subsidiaries, engages in the design, manufacture, packaging, distribution, and sale of medical, surgical, diagnostic, and patient care devices worldwide. The company’s Board of Directors approved a 5.60% increase in its quarterly distribution to 19 cents/share. This marked the 40th consecutive annual dividend increase for this dividend aristocrat. Yield: 0.70%
Caterpillar Inc. (NYSE:CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The company’s Board of Directors approved a 4.50% increase in its quarterly distribution to 46 cents/share. This marked the 18th consecutive annual dividend increase for this dividend achiever. Yield: 1.90%
Target Stores’ recent dividend increase makes the company attractively valued per my entry criteria. Last time I evaluated the company was in 2008, before the financial crisis. I would analyze this retailer in detail in future weeks.