11 Dividend Boosters For Strong Income

|
Includes: GIS, INTC, K, KHC, MMC, MO, PEP, PM, PSA, SPY, TRV, VZ
by: Insider Monkey

A dividend boost of a large-cap stock rarely goes unnoticed by investors. The stocks that raised their dividend payouts become more promising to dividend investors since their dividend yields also increase. Moreover, a recent dividend growth may indicate the robustness of the company's financials and suggest further increases in dividend yields down the road. Hence, many stocks with recent dividend boosts not only have decent potential upsides but also are appealing to defensive investors who seek some downside protection.

Below, we compiled a list of 11 large-cap S&P500 companies with high dividend yields and a recent dividend boosts. These companies have either increased dividend payouts since June 2011 or announced an increase in payouts in the next quarter. (The market data are sourced from Fidelity.) All stocks in our list have market capitalizations above $10 billion and annualized dividend yields of at least 3%.

Dividend Yield

Recent Dividend Growth

YTD Return

Altria Group Inc.

MO

6.10%

7.89%

14.15%

Verizon

VZ

5.53%

2.56%

5.14%

Philip Morris Intl

PM

4.51%

20.30%

18.97%

Intel Corp.

INTC

3.90%

15.89%

5.12%

Heinz Co.

HNZ

3.76%

6.67%

5.15%

Travelers Companies

TRV

3.29%

13.89%

-8.60%

PepsiCo Inc.

PEP

3.26%

7.29%

-0.99%

General Mills Inc.

GIS

3.23%

8.93%

8.75%

Kellogg Co.

K

3.20%

6.17%

7.55%

Public Storage

PSA

3.09%

18.75%

24.10%

Marsh & McLennan

MMC

3.07%

4.76%

7.21%

AVERAGE

10.28%

7.87%

Since June 2011, these 11 large-cap S&P 500 stocks boosted their dividends by 10.28% on average. Since the beginning of this year, the average return of these 11 large-cap stocks was 7.87% vs. -2.54% for the SPY. Only two stocks in this group – TRV and PEP– had a negative return in 2011, whereas three stocks – MO, PM and PSA – provided double digit returns in the same period.

Here are the 11 dividend boosting S&P500 stocks on our list:

Altria Group Inc. (MO): Altria Group Inc., formerly known as Philip Morris Companies Inc., is the parent company of five tobacco corporations. MO raised its annualized dividends per share from $1.52 to $1.64 this month, boosting its dividend yield to 6.10%. MO recently traded at $26.87 and returned 14.15% since the beginning of this year. The stock has a market cap of $55.65B and P/E ratio of 16.38. Tom Russo holds the largest MO position among the 300-plus funds we are tracking.

Verizon Communications (VZ): Verizon Communications is a large telecommunications company operating worldwide. VZ announced to raise its annualized dividends per share from $1.95 to $2.00 next month, boosting its dividend yield to 5.53%. VZ recently traded at $36.19 and returned 5.14% since the beginning of this year. The stock has a market cap of $102.44B and P/E Ratio of 16.16. Phil Gross' Adage Capital holds nearly $150 Million of VZ (check out Phill Gross’ other top holdings).

Philip Morris International Inc. (PM): Philip Morris International Inc. is a large multinational company selling cigarettes worldwide. PM announced to raise its annualized dividends per share from $2.56 to $3.08 next month, boosting its dividend yield to 4.51%. PM recently traded at $68.29 and returned 18.97% since the beginning of this year. The stock has a market cap of $119.95B and P/E Ratio of 15.66. Tom Russo holds more than $500 Million of PM.

Intel Corp. (INTC): Intel Corp. is a global technology company that manufactures and supplies microprocessor products worldwide. INTC raised its annualized dividends per share from 72.5 cents to 84 cents last August, boosting its dividend yield to 3.90%. INTC recently traded at $21.54 and returned 5.12% since the beginning of this year. The stock has a market cap of $113.11B and P/E ratio of 9.75. Paul Ruddock’s Lansdowne Partners has the largest INTC holding among the 300-plus funds we are tracking.

Heinz Co. (HNZ): Heinz Co. is a US company providing food products worldwide. HNZ raised its annualized dividends per share from $1.80 to $1.92 last June, boosting its dividend yield to 3.76%. HNZ recently traded at $51.07 and returned 5.15% since the beginning of this year. The stock has a market cap of $16.40B and P/E ratio of 16.97. Nelson Peltz’s Trian Partners had more than $100 Million in HNZ at the end of June 2011.

Travelers Companies Inc. (TRV): Travelers Companies Inc. is a US company providing insurance services. TRV raised its annualized dividends per share from $1.44 to $1.64 last June, boosting its dividend yield to 3.29%. TRV recently traded at $49.84 and lost -8.60% since the beginning of this year. The stock has a market cap of $20.87B and P/E ratio of 9.77. Mason Hawkins had more than $800 million in TRV at the end of June 2011.

PepsiCo Inc. (PEP): PepsiCo Inc. is a multinational corporation providing non-alcoholic beverages worldwide. PEP raised its annualized dividends per share from $1.92 to $2.06 last June, boosting its dividend yield to 3.26%. PEP recently traded at $63.22 and lost -0.99% since the beginning of this year. The stock has a market cap of $100.05B and P/E ratio of 16.13. Boykin Curry had more than $350 Million in PEP at the end of June 2011 (see Boykin Curry’s favourite stocks here).

General Mills Inc. (GIS): General Mills Inc. is an American company that manufactures and sells branded food products worldwide. GIS raised its annualized dividends per share from $1.12 to $1.22 last July, boosting its dividend yield to 3.23%. GIS recently traded at $37.80 and returned 8.75% since the beginning of this year. The stock has a market cap of $24.44B and P/E ratio of 14.05. Ric Dillon holds more than $140 Million of GIS.

Kellogg Co. (K): Kellogg Co. is a large provider of convenience foods and cereals. K raised its annualized dividends per share from $1.62 to $1.72 last August, boosting its dividend yield to 3.20%. K recently traded at $53.70 and returned 7.55% since the beginning of this year. The stock has a market cap of $19.44B and P/E Ratio of 16.03. Phill Gross’ Adage Capital holds the largest K position among the 300+ funds we are tracking.

Public Storage (PSA): Public Storage is a real estate investment trust specializing in self-storage properties. PSA raised its annualized dividends per share from $3.20 to $3.80 last June, boosting its dividend yield to 3.09%. PSA recently traded at $122.92 and returned 24.10% since the beginning of this year. The stock has a market cap of $20.98B and P/E ratio of 36.15. Ken Heebner's Capital Growth Management holds nearly $90 Million of PSA (see Ken Heebner’s other favourite stocks here).

Marsh & McLennan Companies (MMC): Marsh & McLennan Companies is a financial corporation providing risk management; strategy consulting and insurance brokerage services worldwide. MMC raised its annualized dividends per share from 84 cents to 88 cents last July, boosting its dividend yield to 3.07%. MMC recently traded at $28.68 and returned 7.21% since the beginning of this year. The stock has a market cap of $15.53B and P/E ratio of 17.70. Andreas Halvorsen’s Viking Global had more than $200 Million in MMC at the end of June 2011.

Disclosure: I am long PM, SPY.