Companies that pay dividends show prudent fiscal management in place, which is an important piece of information about a business. Some investors believe that a dividends shows that earnings are real and not manufactured by smart accountants manipulating GAAP rules.
Companies that raise dividends however show not only smart cash management skills, but also confidence in the company’s near term prospects. This assurance of balance sheet strength, despite the challenging economic environment, show their focus on delivering sustainable long-term results to shareholders. The boards of several firms announced dividend hikes over the past week:
Connecticut Water Service, Inc. (CTWS), which operates as a regulated water company in Connecticut. , increased its quarterly dividend by 2.20% to 22.75 cents per share. Connecticut Water Service, Inc. is a dividend achiever, which has increased dividend payments for each of the last 40 years. The stock currently yields 4.20%.
Consolidated Water Co. Ltd. (CWCO), which uses reverse osmosis technology to produce fresh water from seawater, announced an increase to its quarterly dividend by 15% to 7.50 cents per share. Consolidated Water Co. Ltd. is an international dividend achiever, which has increased its quarterly dividend in each of the past ten years. The stock currently yields 1.40%.
Badger Meter, Inc. (BMI), which engages in manufacturing and marketing flow measurement and control products for water utilities, municipalities, and industrial customers worldwide, increased its quarterly dividend by 9% to 12 cents per share. CEO Richard A. Meeusen noted, "This is our seventeenth consecutive year of increased dividend payments. The increase reflects our ongoing commitment to our shareholders and our continued confidence in the future of Badger Meter. This dividend achiever currently yields only 1.30%.
Kinross Gold (KGC), which engages in the gold mining and exploration, increased its quarterly dividend by 25% to 5 cents per share. This is the first dividend increase for Kinross Gold is since the company started paying dividends in 2008. The stock currently yields only 0.40%. If you believe that gold is going to increase over the next few years, gold miners could be a good bet, since they pay some dividends, no matter how small they really are.
Equity LifeStyle Properties, Inc. (ELS) announced that its board of directors has approved a 20% increase in its quarterly dividends to 30 cents/share. This real estate investment trust (REIT) engages in the ownership and operation of lifestyle oriented properties. This is the sixth dividend increase for Equity LifeStyle Properties, Inc. since the company suspended distributions in 2003. The stock currently yields 2.80%.
Broadridge Financial Solutions, Inc. (BR) announced that its board of directors has approved a 100% increase in its quarterly dividends to 14 cents/share and authorized the repurchase of up to 10 million shares of its outstanding common stock. The company provides technology-based outsourcing solutions to the financial services industry. This is the second dividend increase for Broadridge Financial Solutions, Inc. since the company started a dividend policy in 2007. The stock currently yields 2.80%.
Lorillard, Inc. (LO), which engages in the manufacture and sale of cigarettes in the United States, increased its quarterly dividend by 8.7% to 1 dollar per share. Lorillard, Inc.was spun off from Loews in 2008, which explains the lack of long history of dividend increases. The stock currently yields 5.10%.
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