Dividends In the News: Seven Companies Raising Dividends

Lately, it seems that news about companies dropping their dividends have dominated the headlines:

• Fifth Third (FITB) reduced its dividend from $0.44 to $0.15.
• KeyCorp's (KEY) Board expressed its intention to reduce its dividend 50% to an annualized dividend of $0.75/share.
• FairPoint Communications (FRP) lowered its dividend 35%.
• Crystal River Capital (CRZ) cut its dividend from $0.68 to $0.30.

However, not all of the news is bad.

Consider the following companies that recently announced double-digit dividend increases:

• Chesapeake Energy (CHK) raised its dividend 11% to $0.075/share.
• VSE Corporation (VSEC) raised its dividend 12.5% to $0.045/share.
• Capstead Mortgage (CMO) raised its dividend 13% to $0.59/share.
• Target (TGT) raised its dividend 14% to to $0.16/share.
• Caterpillar (CAT) raised its dividend 17% to to $0.42/share.
• Kaiser Aluminum (KALU) raised its dividend 33% to $0.24/share.
• Monsanto (MON) raised its dividend 37% to $0.24/share.

Unfortunately, after running these companies through my [D4L-PreScreen.xls] model none of them warranted additional consideration. CAT was the closest with a NPV of MMA Differential of (621).

On June 19, 2008, BB&T Corporation (BBT) stated that the company's capital levels remain strong and management anticipates "some increase in the cash dividend during 2008."

Finally, sometimes, good news is found in maintaining the status quo. According to Bloomberg, Bank of America's (BAC) CEO told Oppenheimer analyst Meredith Whitney the company's dividend was safe. With an effective yield between 8% and 9%, and trading less than book value, BAC could end up as one of the great steals of 2008. Only time will tell.

Disclosure:  At the time of this writing, I owned BAC and BBT.

Comments

[HarMegiddo:]

how many times is he gonna post these weak story.
And why even mention BBT ? it doesn't even fit into the context of the post. Oh, he owns it, duh!!

2008 Jun 26 01:06 PM

[E.D. Hart:]

Citigroup reps also said that they would maintain dividend, right up to the point of cutting the dividend.

2008 Jun 26 04:27 PM