When a company announces that it will be increasing its quarterly (or monthly in some cases) payout, I see it as a positive catalyst moving forward. With that said, I wanted to highlight three companies who have increased their dividend payouts in the last 72 hours.
Community Bank System (CBU) announced today that it will be increasing its quarterly dividend from $0.26/share to $0.27/share. The DeWitt, New York-based firm currently yields 3.70% ($1.04), operates as the holding company for Community Bank, NA, and as of June 30, 2012, operated 180 financial facilities throughout upstate New York and northeastern Pennsylvania. CBU should be considered not only from an income perspective, but from a growth perspective, especially since the company's returns on assets (1.22%) and equities (10.35%), as well as its profit (24.91%) and operating margins (39.53%) over the last 12 months have been very good. The EPS trends of CBU have been relatively flat over the last four quarters, although it should be noted that the company's most recent quarter was highlighted by a 6% surprise when compared to analysts' estimates.
Delta Natural Gas (DGAS) announced today that it will be increasing its quarterly dividend from $0.175/share to $0.18/share. The Winchester, Kentucky-based company currently yields 3.30% ($0.72) and distributes or transports natural gas in central and southeastern Kentucky. It operates through two segments, Regulated and Non-Regulated. The Regulated segment sells and distributes natural gas to its retail customers primarily in 23 rural counties. The Non-Regulated segment purchases natural gas in the open market, primarily from Kentucky producers, and resells this gas to industrial customers on its distribution system and to others not on its system. If we examine DGAS from a fundamental aspect, we'll see that the company demonstrated very respectable returns on equity (8.18%) and assets (4.53%), as well as very nice profit (7.10%) and operating margins (16.86%) over the last 12 months.
Fifth Third Bancorp (FITB) announced on Tuesday that it will be increasing its quarterly dividend from $0.08/share to $0.10/share. The Cincinnati, Ohio-based firm currently yields 2.20% ($0.40), operates as a diversified financial services holding company in the U.S. that is broken up into a Commercial Banking, Branch Banking and Consumer Lending segment. FITB should also be considered from a growth perspective, especially since the company's return on assets (1.32%) and equities (11.44%), as well as its profit (24.36%) and operating margins (37.98%) over the last 12 months have been very good. In terms of the company's EPS trends, FITB has surpassed analysts' estimates by an average of 19.03%, with the only anomaly coming during the December 2011 quarter when the company missed estimates by 5.6% or $0.02/share.
Potential investors looking to establish a position in CBU, DGAS, or FITB should do so with a small to moderate position and add to that position as both dividend and earnings announcements approach. That said, there are few things potential investors should note with regard to all firms' reference. On August 23, analysts at UBS reiterated their Buy rating on shares of FITB. For those interested in establishing a position in DGAS, it should be noted that the company was added to the Russell 3000 Index on June 22. Lastly and in regard to CBU, it should be noted that the company saw a double-digit increase in profits when it announced earnings on July 25.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.