Pentair: Prime Candidate for a Dividend Hike in 2010

| About: Pentair Inc. (PNR)
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Before 2009 ended, expectations were in place for a much better year for dividend investors in 2010 than what the previous year brought us. While the new year is still quite young, we are already seeing some good dividend news from a select group of companies. One company that is showing investors the money in the new year is Minnesota-based Pentair (NYSE:PNR), a maker of water pumps, pressure tanks, control valves, pool accessories and other unglamorous fare.

What is somewhat glamorous is Pentair's recent 5.6% dividend hike, which boosts the quaterly payout by a penny to 19 cents share. The new dividend, which represents the 34th consecutive year in which the company has increased its payout, will be paid during the current quarter. In December, the company said it expects to earn $1.70 a share in 2010 on sales of $2.8 billion.

Pentair expects free cash for 2009 to come in at $225 million, so the company can likely afford this latest dividend hike. The current yield on Pentair shares is relatively benign at just 2.1%, but that is above the company's five-year average of 1.8%.

While the yield is low and the dividend hike was just a penny a share, we think industrial companies with robust cash positions like Pentair are prime candidates for dividend hikes in 2010.

Disclosure: None