Eleven Dividend Machines Delivering Higher Distributions to Shareholders

Stock prices represent the amount you pay today for the future stream of dividends and proceeds from share sales. In fact, investors can realize a return on their investment either by selling or by collecting a dividend. Investors who rely exclusively on capital gains might have their patience tested during bear markets which is just one example of a situation where the market price might not reflect the true value of a stock. Dividends on the other hand provide a direct link between a company’s fortunes and shareholder returns, which are not dependent on Wall Street. In fact, dividends unlock value in stocks since they are paid out of earnings and it is only companies who can afford to pay dividends that typically make regular distributions. In addition to that, dividends provide a rate of return that is much less volatile than capital gains. As a result dividends deliver a positive return through any market conditions. A rising distribution therefore is a result of improved business conditions at the company you have invested in, which increases future returns and values.

The following consistent dividend raisers delivered higher distributions to their loyal shareholders over the past week:

Kinder Morgan Energy Partners, L.P. KMP) owns and manages energy transportation and storage assets in North America. This master limited partnership increased its quarterly distribution to $1.13/unit, which was 1.80% higher than the previous quarter and 7.60% higher than the distribution from Q1 2010. This dividend achiever has increased consistently distributions for 15 years in a row. Yield: 6.30% (analysis)

ONEOK, Inc. (OKE), a diversified energy company, operates as a natural gas distributor primarily in the United States. The company operates in three segments: ONEOK Partners, Distribution, and Energy Services. ONEOK raised its quarterly distributions by 8% to 52 cents/share. The company has raised distributions for nine years in a row. Yield: 3.60% (analysis)

ONEOK Partners, L.P. (OKS) engages in the gathering, processing, storage, and transportation of natural gas in the United States. ONEOK (OKE) is the general partner of ONEOK Partners L.P (OKS). This master limited partnership raised its quarterly distributions to $1.14/unit, which was 0.80% higher than the previous quarter and 3.60% higher than the distribution from Q1 2010. The company has raised distributions for five consecutive years. Yield: 5.70%

Family Dollar Stores, Inc. (FDO) operates a chain of self-service retail discount stores primarily for low and middle income consumers in the United States. The company raised quarterly distributions by 16% to 18 cents/share. Family Dollar Stores is a member of the dividend aristocrats index, and this dividend increase marked the 35th consecutive annual dividend increase for the company. Yield : 1.60% (analysis)

The McGraw-Hill Companies, Inc. (MHP) provides information services and products to the education, financial services, and business information markets worldwide. It operates in three segments: McGraw-Hill Education, Financial Services, and Information & Media. The company raised its quarterly dividends by 6.40% to 25 cents/share. This marked the 38th consecutive annual dividend increase for this dividend aristocrat. Yield: 2.60% (analysis)

Linear Technology Corporation (LLTC), together with its subsidiaries, engages in the design, manufacture, and marketing of linear integrated circuits worldwide. The company’s Board of Directors approved a 5.50% hike in quarterly distributions to 24 cents/share. This marked the 19th consecutive annual dividend increase for this dividend achiever. Yield: 2.70%

Enterprise Bancorp, Inc. (EBTC) operates as the holding company for Enterprise Bank and Trust Company that provides various banking products and services primarily in Merrimack Valley and north central regions of Massachusetts, and south central New Hampshire. The company raised its quarterly distribution by 5% to 10.50 cents/share. This marked the sixteenth consecutive annual dividend increase for the company. Yield: 3%

Airgas, Inc. (ARG), through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hardgoods in the United States. The company announced a 16% increase in its quarterly dividend to 29 cents/share. Airgas has raised dividends for nine years in a row. Yield: 1.80%

StoneMor Partners L.P. (STON), together with its subsidiaries, engages in the ownership and operation of cemeteries in the United States. The company operates in two segments, Cemetery Operations and Funeral Homes. StoneMor announced a 1.80% hike over its previous quarter distribution to 57.50 cents/unit. This master limited partnership has raised distributions for 6 years in a row. Yield: 7.50%

Bar Harbor Bankshares (BHB) operates as the holding company for Bar Harbor Bank & Trust that offers various banking products and services to individuals, businesses, not-for-profit organizations, and municipalities in Hancock, Washington, and Knox Counties. The company raised its quarterly distribution by 1.90% to 27 cents/share. This marked the eight consecutive annual dividend increase for the company. Yield: 3.60%

Pall Corporation (PLL) manufactures and markets filtration, purification, and separation products and integrated systems solutions worldwide. The company announced a 9.40% raise in its quarterly dividends to 17.50 cents /share. This marked the seventh consecutive annual dividend increase for the stock. Yield: 1.40%

Of the companies listed above, I find ONEOK Inc (OKE), Kinder Morgan Partners (KMP) and McGraw Hill (MHP) attractively valued at the moment. In fact, I recently added to my position in the first two stocks. Linear Technology (LLTC) is one of the few tech companies which have raised distributions for close to two decades, which means that I will place it on my list for further research. Despite the fact that the stock seems overvalued by my standards, my yield on cost on Family Dollar (FDO) is 2.90%. It has also been one of the best performers in my dividend portfolio since 2008. I would consider adding to my position in the stock if it ever yields 2%, mainly due to its strong dividend growth.

Full Disclosure: Long KMR, FDO, OKE, MHP

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