Eight Cash Machines Hiking Dividends

Many investors chose to focus on the General Motors (GM) IPO last week and on the moves of the Chinese Central Bank. Others kept speculating whether the strongest banks that have already repaid their TARP loans, such as Wells Fargo (WFC), JP Morgan (JPM) and US Bancorp (USB) would be allowed to raise dividends. As usual, I kept ignoring these sexy headlines and instead focused on the boring list of consistent dividend increasers, which kept announcing dividend hikes. Some of these companies are also dealing with the uncertainty behind the expiration of the advantageous tax treatment of qualified dividends by either paying distributions earlier or paying out a special dividend.

This week’s list of companies that have raised distributions for at least five years in a row and also announced dividend hikes last week include:

Brown-Forman Corporation (BF.B) engages in the manufacture, bottling, import, export, and marketing of alcoholic beverage brands. This dividend aristocrat raised its quarterly dividend by 6.70% to 32 cents/share. The company has consistently raised dividends for 27 years in a row. Historically the payment from the November declaration has been made in early January of the following calendar year. However, with the uncertainty surrounding the renewal of the current dividend tax rates which expire on December 31, 2010, the company chose to accelerate the cash payment, which will result in five cash payments for calendar 2010. Yield: 2% (analysis)

New Jersey Resources Corporation (NJR) provides retail and wholesale energy services. It operates in two segments, Natural Gas Distribution and Energy Services. This dividend achiever raised its quarterly dividends by 5.90% to 36 cents/share. This marked the sixteenth consecutive annual dividend increase for the company. Yield: 3.50%.

Campbell Soup Company (CPB), together with its subsidiaries, engages in the manufacture and marketing of branded convenience food products worldwide. The company raised its quarterly dividend by 5% to 29 cents/share. This was the seventh consecutive year of dividend increases for Campbell Soup. Yield: 3.40%

NSTAR (NST), through its subsidiaries, engages in the distribution, transmission, and sale of energy in Massachusetts. This dividend achiever announced a 6.3% increase in its quarterly dividend to 42.50 cents/share. The company has raised dividends for 13 years in a row. Yield: 4.10%

NIKE, Inc. (NKE) designs, develops, and markets footwear, apparel, equipment, and accessory products for men, women, and children worldwide. The company raised its quarterly dividend by 15% from 27 cents/share to 31 cents/share. This was the ninth consecutive annual dividend increase for Nike. Yield: 1.40%

The Laclede Group, Inc. (LG) operates as a public utility holding company. The company raised its quarterly dividend by 2.50% to 40.50 cents/share. This was the seventh consecutive annual dividend increase for Laclede. Yield: 4.60%

Donaldson Company, Inc. (DCI) engages in the manufacture and sale of filtration systems and replacement parts worldwide. The company operates in two segments, Engine Products and Industrial Products. This dividend champion raised its quarterly distribution by 4% to 13 cents/ share. This was the second dividend increase this year, and marked the 25th consecutive annual dividend increase for the company. Yield: 1%

Royal Gold, Inc. (RGLD), together with its subsidiaries, acquires and operates precious metals royalties. The company raised its quarterly dividend by 22% to 11 cents/share. This was the sixth consecutive annual dividend increase for this gold stock. Yield: 0.90%

A consistent history of dividend growth is just one of the prerequisites behind identifying the best dividend stocks. Other factors include competitive advantages and valuation to name a few.

Full Disclosure: Long BF.B

Relevant Articles:

- TARP is bad for dividend investors
- Best Dividends Stocks for the Long Run
- Dividend Aristocrats List for 2010
- Will higher taxes bring dividend stocks down?