Dividend cuts can easily be viewed with skepticism as companies cut down on their ability to distribute income back to their shareholders. Often paired with the company's deteriorating performance, these events can easily foreshadow a breakdown in the company itself. Yet in the midst of the Great Recession, an event that some would even argue continues to reign today, dividend cuts were often put into place in order to shore up balance sheets in light of ongoing uncertainty.
As the economic conditions stabilize, many of these companies have placed themselves back onto a track record of steady dividend growth. The histories of these companies can serve as a template for dividend growth potential as their corporate performance improves over time. The following companies offer a glance at a few companies who appear to be back on course, a trend worthy of watching for income investors. All values were taken as of July 7, 2012.
|Company Name||Mkt. Cap.||Fwd. P/E||Fwd. Dividend %||Industry|
|General Electric (NYSE:GE)||$211.75 Billion||11.49||3.3%||Diversified Machinery|
|Gannet Co. (NYSE:GCI)||$3.46 Billion||6.82||5.4%||Newspaper Publishing|
|Dow Chemical (NYSE:DOW)||$37.67 Billion||9.88||4.0%||Chemicals|
|KeyCorp (NYSE:KEY)||$7.34 Billion||9.51||2.6%||Banking Services|
|Comerica Inc (NYSE:CMA)||$6.02 Billion||11.33||1.9%||Regional Bank|
As one of the largest conglomerates in the world, General Electric has a significant presence in technology, media and financial services. Often correlated as being representative of the profile of corporate America itself, GE was founded in 1896 and is the longest surviving member of the Dow Jones Industrial Average. The company's operating businesses are reported as segments, which include Capital Finance, Consumer & Industrial, Energy Infrastructure, NBC Universal and Technology Infrastructure. Prior to 2009, the company was paying a quarterly dividend of $0.31. As of today the company's rate is $0.17.
As a media and marketing solutions company, Gannet publishes 83 daily newspapers and more than 650 magazines. The company's largest publication is USA today, the largest-selling daily print newspaper. Its operates several unique websites including CareerBuilder.com, the nation's top employment website. In regards to television broadcasting, the company reaches more than 20 million people over 19 markets. Prior to 2009, the company was paying a quarterly dividend of $0.40. As of today, the company's rate is $0.20.
With $60 billion in revenue in 2011, Dow Chemical is one of the largest chemical conglomerates in the world. The company also specializes in agrosciences, plastics, and other advanced materials. The company manufactures and supplies products used as the raw materials for manufacturers around the world. Prior to 2009, the company paid a quarterly dividend rate of $0.42. As of today, the company's rate is $0.32.
KeyCorp serves as the parent holding company for KeyBank National Association. KeyBank provides a wide range of retail and commercial banking services along with expertise in commercial leasing, investment management, consumer finance, and investment banking products. The company hosts over 1000 full-service retail branches in 14 states, and has over 1500 automated teller machines in 15 states. In 2007, the company paid a quarterly dividend rate of $0.365. As of today, the company's rate is $0.05.
With origins dating back to 1849, Comerica has grown into a regional bank primarily covering Texas, Arizona, California, Florida, and Michigan. The company's major business segments include the Business Bank, the Retail Bank, and Wealth & Institutional Management. The company conducted $2.6 billion in revenue in 2011. At its peak in 2008, the company offered a quarterly dividend rate of $0.66. As of today, the company's current rate is $0.15.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.