The ability to participate in corporate profits is the underlying foundation of equity investment. It's a foundation upon which stocks gain worth, and it's the underlying principle that establishes the link between a willing investor and a corporate entity. Even stocks that do not currently pay dividends can grow in worth on hope that a shareholder can one day participate in the return of monetary worth from that company. As a result, monitoring the dividend yields of a company can often be just as important as studying the underlying fundamentals it trades on.
Dividend growth is an important characteristic that is often correlated with a company's earnings maturation or increased stability. Companies that significantly raise their yields tend to be projecting to their shareholders that the state of the company is strong and may be worthy of additional investment. Such signals often merit additional due diligence by investors to determine whether this is the case or not. The following companies have shown double-digit dividend growth over the past few months. All values were on the basis of quarterly yields and were described as of April 20, 2012.
|Company Name||Current Price||Quarterly Dividend||Annual Yield%||Dividend Growth%|
|Belo Corp. (NYSE:BLC)||$6.54||$0.08||4.8%||60%|
|Cypress Semiconductor (NASDAQ:CY)||$15.50||$0.11||2.8%||22%|
|Deere & Co (NYSE:DE)||$80.91||$0.46||2.3%||12%|
|Dow Chemical (NYSE:DOW)||$35.31||$0.32||3.7%||28%|
|Harris Corp (NYSE:HRS)||$44.10||$0.33||3.0%||18%|
|IDEX Corp (NYSE:IEX)||$41.49||$0.20||2.0%||18%|
|Occidental Petroleum (NYSE:OXY)||$88.61||$0.54||2.5%||17%|
|Saint Jude (NYSE:STJ)||$38.02||$0.23||2.4%||10%|
|Sempra Energy (NYSE:SRE)||$64.51||$0.60||3.8%||25%|
|Southwest Gas Corp. (NYSE:SWX)||$41.55||$0.295||2.9%||11%|
|Seagate Technology (NASDAQ:STX)||$29.21||$0.25||3.5%||39%|
|Symetra Financial Corp. (NYSE:SYA)||$11.40||$0.07||2.5%||17%|
|Xinyuan Real Estate (NYSE:XIN)||$3.39||$0.16||4.7%||60%|
Of the previously mentioned companies, the following have just recently established or re-established their dividend yields within the past 1.5 years: BankUnited (BKU), Cypress (CY), Saint Jude (STJ), and Xinyuan (XIN). As a result, increases in these yields have yet to become truly established and recognized as having a consistent growth pattern. The rising yields of such companies should be scrutinized a bit more heavily in regards to their ongoing sustainability.
However, the following of the previously mentioned companies have shown increasing growth over the years in regards to their dividend yield histories: Deere (DE), Harris (HRS), IDEX (IEX), Occidental (OXY), Sempra (SRE), Southwest (SWX) and Seagate (STX). In my own opinion, Symetra (SYA) is on the borderline of showing a growth pattern. For companies that have consistently shown dividend growth, investors with a more income-centric approach may ideally find these enterprises worthy of tracking for future investment potential.
Disclosure: I am long (XIN)