It seems that many dividend stocks have been on a tear lately, largely due to investors trying to generate income and compensate for the rock bottom rates on savings accounts, CDs and bonds. Stocks with a long term history of growing their dividend have taken off and many have been at 52 week highs until the recent mild sell off. Many stocks are priced for perfection and buying dividend growth stocks during periods of overvaluation can hurt long term performance inside your portfolio.
A good example is Coca Cola (KO), poised for a stock split later in the year, but also trading at all time highs. To me, it looks like a crowded trade and may be a better value a little further down the road. Therefore, I started to look outside the cadre of usual suspects and here are five little known dividend stocks that have recently increased their dividends.
Kaydon Corporation (KDN)
Kaydon Corporation is a leading designer and manufacturer of custom engineered, performance-critical products, supplying a broad and diverse group of alternative energy, military, industrial, aerospace, medical and electronic equipment, and aftermarket customers. Its principal products include bearings and components, filters and filter housings, custom rings, shaft seals, linear deceleration products, specialty balls, fuel cleansing systems, gas-phase air filtration systems and replacement media, industrial presses and metal alloy products.
- Market Cap: $726.4 Million
- Forward PE Ratio: 12.64
- Dividend Yield: 3.58%
- Recent Dividend Increase: .80 annual per share current vs. .76 annual per share previous
- Payout Ratio: 51.46%
MicroFinancial, through subsidiary TimePayment, provides leasing and financing services through vendors to small businesses. TimePayment leases and rents commercial equipment -- automated teller machines, espresso machines, credit card terminals, computers, vending machines, water purification equipment, wireless communications devices, and more. Leases are generally written for equipment valued at $500 to $15,000.
- Market Cap: $118.7 Million
- Forward PE Ratio: 11.00
- Dividend Yield: 2.95%
- Recent Dividend Increase: .24 annual per share current vs. .20 annual per share previous
- Payout Ratio: 34.97%
Miller Industries (MLR)
Miller Industries, Inc. is the world's largest manufacturer of vehicle towing and recovery equipment, with domestic manufacturing subsidiaries in Tennessee and Pennsylvania, and foreign manufacturing subsidiaries in France and the United Kingdom. We offer a broad range of equipment to meet our customers' design, capacity and cost requirements under our Century, Vulcan, Challenger, Holmes, Champion, Chevron, Eagle, Titan, Jige and Boniface brand names.
- Market Cap: $162.3 Million
- Forward PE Ratio: 8.55
- Dividend Yield: 3.58%
- Recent Dividend Increase: .52 annual per share current vs. .48 annual per share previous
- Payout Ratio: 31.54%
Armanino Foods of Distinction (OTC:AMNF)
Armanino Foods of Distinction, Inc. is an international food company that manufactures and markets frozen Italian specialty food items such as pestos, sauces and filled pastas to the foodservice, retail, and industrial markets.
- Market Cap: $27.9 Million
- Current PE Ratio: 11.37
- Dividend Yield: 5.85%
- Recent Dividend Increase: .048 annual per share current vs. .04 annual per share previous
- Payout Ratio: 60.00%
Span America (SPAN)
Span-America Medical Systems, Inc. manufactures and markets products to the healthcare industry for the prevention and treatment of pressure ulcers. The Company also is a manufacturer and marketer of custom foam and packaging products for the consumer and industrial markets.
- Market Cap: $50.7 Million
- Forward PE Ratio: 11.24
- Dividend Yield: 2.87%
- Recent Dividend Increase: .50 annual per share current vs. .44 annual per share previous
- Payout Ratio: 25.46%
Most of these stocks lack the longer term history of raising dividends and therefore should not form the core of any investor's dividend growth portfolio. However, they do offer the potential for growth in both price and future dividend payments without the prospect of blatant overvaluation that is seen in other popular choices.