Dividend Play: Stewart Enterprises

| About: Stewart Enterprises, (STEI)

Jefferson, Louisiana, based Stewart Enterprises (NASDAQ:STEI), reported an increase of its annual cash dividend on its Class A and Class B Common Stock by 14% to $0.16/share, compared with the previous $0.14/share per share. The dividend is payable on April 26, 2012, to holders of record of Class A and Class B Common Stock as of the close of business on April 12, 2012.

Thomas M. Kitchen, President and CEO, said, "The Board's decision to increase the cash dividend reflects its continued confidence in our solid balance sheet and our ability to consistently generate strong cash flow. This represents a 60% increase in our dividend rate in the last two and one-half years." (I)

A 60% increase in any dividend is pretty remarkable, but that's not the only thing going for STEI. It is the #2 ranked services provider in the infamous Death Care industry. It owns and operates 218 nationwide funeral homes and 141 cemeteries. The Death Care industry, investors should note, consists of Funeral Homes, Cemeteries, Embalming Companies, Morticians and Funeral Operations Firms.

It not only had a solid balance sheet, but trades at a P/E ratio of 14.3, making the stock pretty cheap. A solid 2.3% yield will attract both the long-term investor and dividend investor. Recent earnings may discourage investors, coming up lower than expected the last few quarters. However, the 60% increase in the stock's dividend is a sign management has a very good hold on the company. As STEI continues to grow at a steady pace we should see improved earnings moving forward.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.