Eight Dividend Stocks Raising Yield on Cost

Dividend growth stocks are the best kept secret on Wall Street. These companies provide early investors with a growing stream of dividend income, which increases their yields on cost. Few investors recognize the potential of solid companies paying yields of 2%-3% today that consistently grow distributions. Such investments could produce a double digit yield on cost over time to early investors. For example, investors who purchased Lowe's (LOW) shares 15 years ago are generating a 12.60% yield on cost today. Those lucky few who purchased when Lowe's became a dividend aristocrat 24 years ago are sitting on an yield on cost of over 100%.

Several dividend growth stocks increased distributions last week, which increased yields on cost for its investors. The companies include:

Lowe's Companies, Inc. (LOW), together with its subsidiaries, operates as a home improvement retailer in the United States, Canada, and Mexico. This dividend aristocrat raised its quarterly distributions by 27.30% to 14 cents/share. The company has consistently raised distributions for 49 years in a row. Yield: 2.30% (analysis)

Per my entry criteria, I would consider initiating a position in the stock on dips below $22.50.

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. The company raised its quarterly dividend by 15.40% to 15 cents/share. This marked the 25th consecutive annual dividend increase for this dividend champion. Yield: 1%

SEI Investments Company (SEIC) provides investment processing, fund processing, and investment management business outsourcing solutions to corporations, financial institutions, financial advisors, and high-net-worth families. The company raised its quarterly dividend by 20% to 12 cents/share. This dividend achiever has consistently raised distributions for 19 years in a row. Yield: 1.10%

Flowers Foods, Inc. (FLO) produces and markets bakery products in the United States. It operates in two segments, Direct-Store-Delivery (DSD) and Warehouse Delivery. The company raised its quarterly dividend by 12.50% to 22.50 cents/share. This marked the 10th consecutive annual dividend increase for the Flowers Foods. Yield: 2.80%

Bunge Limited (BG) engages in the agriculture and food businesses in approximately 30 countries. The company raised its quarterly dividend by 8.70% to 25 cents/share. This marked the 10th consecutive annual dividend increase for Bunge LTD. Yield: 1.40%

H. J. Heinz Company (HNZ) manufactures and markets food products for consumers, foodservice, and institutional customers. The company raised its quarterly dividend by 6.70% to 48 cents/share. This marked the seventh consecutive annual dividend increase for the company. Yield: 3.60%

Deere & Company (DE) provides products and services primarily for agriculture and forestry worldwide. The company operates in three segments: Agriculture and Turf, Construction and Forestry, and Credit. The company raised its quarterly dividend by 17.10% to 41 cents/share. This marked the ninth consecutive annual dividend increase for Deere. Yield: 1%

The Travelers Companies, Inc. (TRV), through its subsidiaries, provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. The company raised its quarterly distribution by 13.90% to 41 cents/share. Travelers has managed to raise distributions for 8 years in a row. Yield: 2.70%

Full Disclosure: None

Relevant Articles:

- Dividend Growth Stocks – The best kept secret on Wall Street

- Yield on Cost Matters

- Where are the original Dividend Aristocrats now?

- How to live off dividends in retirement

United Technologies (UTX) Dividend Stock Analysis

United Technologies Corporation (UTX) provides technology products and services to the building systems and aerospace industries worldwide. The company operates in six segments: Pratt & Whitney, Otis, Carrier, Sikorsky, UTC Fire & Security and Hamilton Sundstrand. United Technologies is a component of the Dow Jones Industrials and the dividend achievers indexes. United Technologies has paid uninterrupted dividends on its common stock since 1936 and increased payments to common shareholders every year for 17 years.

The most recent dividend increase was in April, when the Board of Directors approved a 12.90% increase to 48 cents/share. The major competitors of United Technologies include Honeywell (HON), General Electric (GE) and Boeing (BA).

Over the past decade this dividend growth stock has delivered an annualized total return of 10.70% to its loyal shareholders.

The company has managed to deliver an increase in EPS of 10.60% per year since 2001. Analysts expect United Technologies to earn $5.36 per share in 2011 and $6.08 per share in 2012. This would be a nice increase from the $4.74/share the company earned in 2010.

The backlog in commercial airplanes at Boeing and Airbus until 2013 is one positive fact for United Technologies. Another plus will be orders to Otis for the new World Trade Center. The introduction of the Boeing 787 would also be positive for revenue growth. United Technologies generates 60% of its revenues from outside the US. Growth in emerging markets such as China would certainly add to the bottom line.

Over the past decade, the return on equity has consistently remained above 20%. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.

The annual dividend payment has increased by 15.90% per year since 2001, which is higher than the growth in EPS.

A 16% growth in distributions translates into the dividend payment doubling every four and a half years. If we look at historical data, going as far back as 1977, we see that United Technologies has actually managed to double its dividend every eight and a half years on average. The company tends to raise dividends every five quarters, rather than every four quarters.

Over the past decade the dividend payout ratio has steadily increased, as dividends increased at much higher rate than earnings. While this indicator is at 36%, there is still more room for high dividend growth. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently United Technologies is trading at 17.50 times earnings, yields 2.20% and has a sustainable dividend payout. The stock is close to my entry criteria, and could be a buying opportunity on dips below $77.

Full Disclosure: Long UTX

Relevant Articles:

High Yield Stocks Raising Dividends

My Entry Criteria for Dividend Stocks

Seven Dividend Aristocrats to buy on dips

Dividend Achievers Offer Income Growth and Capital Appreciation

How to live off dividends in retirement

The goal of every dividend investor is to generate enough in distributions every year that cover their basic expenses. After spending many years meticulously saving and investing in dividend growers, there comes a time when investors reach that elusive goal of living off dividends in retirement.

The question is, how should one invest their hard earned dollars in retirement? Should they invest in higher yielding stocks or move everything to fixed income and call it a day? In this article I would try to answer these questions, propose more solutions and provide a basic outline of what my strategy is for living off dividends in retirement.

First, I do not plan on changing my stock asset allocation in retirement. I do try to target an overall portfolio yield of 3% - 4% which would be sufficient to generate enough income to live off of. My dividend portfolio has three types of stocks which I discussed in this article. I am also interested not just in earning a dividend from the stocks I purchase, but I also in generating total returns that match the returns of S&P 500 over longer periods of time, with lower volatility cushioned by the regular dividend payments.

The first type includes higher yielding stocks which are not expected to generate much in distributions growth. If they do, that would be a plus of course. This is the component that would increase your current portfolio yield. Stocks I own which fit this characteristic include:

Kinder Morgan Partners (KMP) Yield: 6.40%|10 Year Annual Dividend Growth Rate: 10.90%
Realty Income (O) Yield: 5% | 10 Year Annual Dividend Growth Rate: 4.50%
Con Edison (ED) Yield: 4.50% | 10 Year Annual Dividend Growth Rate: 0.90%

The second type of stocks I own include companies in the sweet spot. These companies spot an average yield in comparison to the S&P 500, which I use to benchmark my dividend income against. They also spot on average higher dividend growth in the upper single digits. This is the component that would increase dividend income at or above the rates of inflation. Companies in the sweet spot include:

Procter & Gamble (PG) Yield: 3.10%| 10 Year Annual Dividend Growth Rate: 10.90%
Coca-Cola (KO) Yield: 2.80%| 10 Year Annual Dividend Growth Rate: 10%
Wal-Mart Stores (WMT) Yield: 2.60%| 10 Year Annual Dividend Growth Rate: 17.80%

The third type of dividend stocks I own include companies which do not yield much today, but based on the distribution raises of the preceding years have a high chance of increasing dividends at a growth rate in the double digits. Companies like that include:

Walgreen (WAG) Yield: 1.60% | 10 Year Annual Dividend Growth Rate: 16.50%
Yum! Brands (YUM) Yield: 1.80% | 5 Year Annual Dividend Growth Rate: 32.60%
Family Dollar (FDO) Yield: 1.30% | 10 Year Annual Dividend Growth Rate: 10.80%

Second, while I will maintain the structure of my dividend portfolio, I will look to add some fixed income exposure right before hitting the target retirement date. Based off studies of the 4% rule, which I have discussed before, it seems that even a modest 25% allocation to government bonds could provide some stability to portfolios during recessions, depressions and deflationary conditions. At the end of the day, placing a 25% allocation to fixed income would not detract from total return performance by much. It would also provide some stability that could be beneficial by decreasing the chance of outliving your money. Right now this is a miniscule portion of my portfolio, consisting mainly of long term CD’s purchased when interest rates were slightly higher. If I had a portfolio of $1,000,000 and four or five years until retirement I would start putting the dividends I received in US Treasury Bonds for half a decade until I reach a 25% allocation to fixed income in retirement.

While many investors proclaim that we will have a massive inflation because of the Fed printing press, I doubt the future will turn out exactly as everyone expects it to turn out. I discussed this issue in this article. Japan has a high amount of debt, yet it has seen to inflation over the past 20 years, and government bonds have been the best investment during that time period.

Last but not least, while I target an overall yield for my portfolio, I do not just look at yield alone. I tend to require a minimum number of consecutive dividend increases for stocks before I even place them on my watch list. After that I look at distribution coverage, business model, competitive advantages, potential for earnings and distribution growth and valuation. I also make sure that my portfolio is not concentrated in a few sectors as well. Check my entry criteria for more information on how I evaluate stocks.

Full disclosure: Long KMP, O, ED, PG, KO, WMT, WAG, YUM, FDO

Relevant Articles:

- High yield stocks for current income

- Living off dividends in retirement

- Fixed Income for dividend investors

- A dividend portfolio for the long-term

This post was included in the Carnival of Personal Finance #311

Seven Dividend Stocks Increasing Distributions

I browse through the list of weekly dividend increases, in order to uncover hidden dividend gems. I typically weed out companies which have raised distributions for less than five years. I have highlighted seven income stocks, which have raised distributions for five years in a row. Not all of these stocks are buys however. I require at least ten years of consistent dividend raises before I include stocks in my portfolio. You could read more about my entry criteria here. The stocks raising dividends include:

The Clorox Company (CLX) engages in the production, marketing, and sales of consumer products in the United States and internationally. The company operates through four segments: Cleaning, Lifestyle, Household, and International. The company announced an increase in quarterly distributions by 9.10% to 60 cents/share. Clorox is a dividend aristocrat which has raised distributions to shareholders for 34 consecutive years. Yield: 3.40% (analysis)

First Financial Corporation (THFF), through its subsidiaries, provides various financial services in Indiana and Illinois. The company announced an increase in quarterly distributions by 2.20% to 47 cents/share. First Financial Corporation is a dividend champion which has raised dividends for 23 consecutive years. Yield: 3%

Safeway Inc (SWY)., together with its subsidiaries, operates as a food and drug retailer in North America. The company announced an increase in quarterly distributions by 20.80% to 14.50 cents/share. Safeway has raised dividends for 7 years in a row. Yield: 2.30%

Tiffany & Co. (TIF), through its subsidiaries, engages in the design, manufacture, and retail of fine jewelry. The company announced an increase in quarterly distributions by 16% to 29 cents/share. Tiffany has raised dividends for 9 years in a row. Yield: 1.70%

Xcel Energy Inc. (XEL), through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electricity to residential, commercial, industrial, and public authorities in the United States. The company announced an increase in quarterly distributions by 3% to 26 cents/share. Xcel Energy has raised dividends for 8 consecutive years. Yield: 4.10%

Analog Devices, Inc. (ADI) engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. The company announced an increase in quarterly distributions by 13.60% to 25 cents/share. Analog Devices has raised dividends for 9 years in a row. Yield: 2.50%

W.R. Berkley Corporation (WRB), through its subsidiaries, operates in the property casualty insurance business in the United States and internationally. The company announced an increase in quarterly distributions by 14.30% to 8 cents/share. W.R. Berkley Corporation has raised dividends for 10 years in a row. Yield: 1%

I recently added to my position in Clorox (CLX) on the dip created by the company's weaker than expected third quarter results. Given the P/E of 17.60, sustainable dividend payout and the current yield of 3.40% I still find the company to be an attractive investment.

Full Disclosure: Long CLX

Relevant Articles:

- Clorox (CLX) Dividend Stock Analysis

- Dividend Aristocrats list for 2011

- Twelve Income Stocks Rewarding Patient Dividend Investors

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Weekend Reading Links - May 22, 2011

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends4Life presented How To Build A Sustainable High Yield Portfolio
• Dividend Growth Investor presented Are dividend stocks a separate asset class?
• Buy Like Buffett presented A Property Insurance Company With A 5% Dividend Yield
• The Passive Income Earner presented Top 20 Dividend Stocks - May 2011 Edition
• The Dividend Guy presented Dividend Dad – Dividend Investing and RESP
• Disciplined Approach to Investing presented Why The Price Of A Gallon Of Gasoline Seems Elevated
• The Market Capitalist presented Again, Running With The Herd Isn’t Always The Best Idea
• Dividend Monk presented Novartis (NVS) Dividend Stock Analysis
• The Dividend Pig presented 5 Tech Titans Suitable for Every Income Investors Portfolio
• Dividend Mantra presented Why I'm Buying Wal-Mart
• Dividend Ninja presented the second part of his Interview with Derek Foster.

There are some really good articles here, please take time and read a few of them.

3M (MMM) Dividend Stock Analysis

3M Company (MMM), together with subsidiaries, operates as a diversified technology company worldwide. The company is member of the S&P 500 and the S&P Dividend Aristocrats indexes. 3M has paid uninterrupted dividends on its common stock since 1916 and increased payments to common shareholders every year for 53 years.

The most recent dividend increase was in February, when the Board of Directors approved a 4.80% increase to 55 cents/share. The major competitors of 3M include General Electric (GE), Carlisle (CSL) and Raven Industries (RAVN).

Over the past decade this dividend growth stock has delivered an annualized total return of 8.60% to its loyal shareholders.

The company has managed to deliver an increase in EPS of 13.60% per year since 2001. Analysts expect 3M to earn $6.21 per share in 2011 and $6.95 per share in 2012. This would be a nice increase from the $5.63/share the company earned in 2010.

Growth in EPS would come from higher revenues due to the global economic rebound from the 2007 – 2009 recession, as well as synergies realized from recent acquisitions of companies such as Cogent. Growth in developing countries such as China should also add to future profitability. The real growth kick factor behind 3M however is the company’s innovative products. 3M has spent approximately six percent of its revenues on innovation in the form of R&D over the past decade. 3M’s culture, where business units are encouraged to generate more revenues by introducing new products should bolster the company’s future profitability.

Over the past decade, the return on equity has consistently remained above 27%. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.

The annual dividend payment has increased by 6.40% per year since 2001, which is lower than the growth in EPS.

A 6.40% growth in distributions translates into the dividend payment doubling every 11 years. If we look at historical data, going as far back as 1973, we see that 3M has actually managed to double its dividend every nine and a half years on average.

Over the past decade the dividend payout ratio has steadily decreased, as EPS growth easily outstripped dividend growth A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently 3M is trading at 16.30 times earnings, yields 2.30% and has a sustainable dividend payout. The stock is close to my entry criteria, and could be a buying opportunity on dips below $88. The slow dividend growth as of recently however has stopped me from adding to this position as of lately.

Full Disclosure: Long MMM

Relevant Articles:

- Nineteen Consistent Dividend Growth Stocks raising distributions

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- Dividend Investors are getting paid for waiting

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Are dividend stocks a separate asset class?

Fellow dividend investor Dave Van Knapp posted an interesting article explaining why dividend growth stocks could be seen as a separate asset class.

An asset class is a group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. The three main asset classes are equities (stocks), fixed-income (bonds) and cash equivalents (instruments). Some investors also classify real estate and commodities as a separate asset class.

I certainly disagree that dividend stocks are a separate asset class. To say that dividend stocks are a separate asset class is similar to saying that growth stocks are a separate asset class as well. As I explained in a previous article, dividend stocks are equities and not a separate asset class.

As a dividend investor, I benchmark my performance against S&P 500. I also benchmark my total return performance as well as the growth in my dividend income. I also expect that over the long run, my total returns would probably be close to the total returns of the S&P 500. The main difference is that my portfolio is structured in a way that it will generate dividend income which rises over time. As a result, I am generating a stable return on investment, which is not dependent on the irrational behavior of the stock market. I do not want to stress selling out 4% of my portfolio when the market is down, in order to afford my daily dose of peanut butter and jelly.

The reason why dividend stocks are equities is that they are correlated strongly with returns of S&P 500 or Wilshire 5000 (the market). During the financial crisis of 2007- 2009, most dividend stocks experienced declines in their share prices.

In addition, during the same financial crisis, many dividend stocks cut distributions. If you compare the dividend growth of S&P 500 to the dividend growth in a dividend growth portfolio, one would definitely see strong correlation. If you compare the results of the broad dividend achievers index over the past decade, to the results of the S&P 500 over the past decade, one would notice startling correlation:

The reason behind the correlation is that the top stocks by market weight that make the S&P 500 are actually dividend growth stocks. The table below shows the top ten stocks of the S&P 500 by market weight:

The the ten stocks of the Dividend Achievers Index, which have the highest weightings include:

That being said, do it yourselves investors should not focus exclusively on stickers such as large-cap, mid-cap, small-cap. Investors should instead focus on quality companies with strong competitive advantages, strong brand names and pricing power that stems from these quality characteristics. The quality characteristics of the products and services which the dividend paying stock sells should allow the company to pass price increases to consumers and maintain profitability over time. This should lead to rising earnings per share, which would fuel future dividend growth. Only companies which generate excess cashflows will be essentially able to pay and boost distributions on a consistent basis. I do not believe in diversification at any price, that ignores quality.

Investors who view dividend stocks as a separate asset class, would likely be very surprised when their diversified income portfolios end up generating a total return that strongly correlates with equities in general. In order to be properly diversified however, other asset classes such as fixed income would likely benefit investors as they are somewhat non-correlated with stocks.

Full Disclosure: Long XOM, CVX, PG, JNJ, WMT, KO, PEP

Relevant Articles:

- Benchmarking Dividend income

- Why Dividend Growth Stocks Rock?

- Fixed Income for dividend investors

- Best Dividends Stocks for the Long Run

This article was included in the Carnival of Personal Finance #310 - Most Expensive Hotel Rooms in the World - May 23rd, 2011 Edition

Dividend Stocks Increasing Retirement Incomes for Investors

Investors who plan to live off dividends in retirement should follow several guidelines that would ensure they could do so. First, they should select companies which have raised distributions each year, in order to ensure that they will generate a sufficient income stream that rises over time, which protect purchasing power of their dollars. Second, they should invest only in companies which meet certain quantitative or qualitative criteria, such as the ones described in this article. Last but not least, investors should be properly diversified in order to minimize exposure in the event of dividend cuts, company failures etc.

Carefully selected companies raising dividends could ensure a rising income stream in retirement, which maintains and even increases its purchasing power over time. Companies that announced dividend raises last week include:

Intel Corporation (INTC) engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Intel Corporation today announced that its board of directors has approved a 16 percent increase in the quarterly cash dividend to 21 cents per share. This the second dividend increase in the past 6 months. Intel previously raised the dividend 15 percent in November 2010. The company has raised distributions for 8 years in a row. Yield: 3.60% (analysis)

Mine Safety Appliances Company (MSA) develops, manufactures, and supplies health and safety products used by workers in the fire service, homeland security, construction, and other industries, as well as the military. The company raised its quarterly dividend by 4% to 26 cents/share. This dividend champion has raised distributions for 40 years in a row. Yield: 2.70%

Buckeye Partners, L.P. (BPL) primarily operates refined petroleum products pipeline systems in the United States. The company raised its quarterly distributions by 1% to $1/unit. This dividend achiever has raised distributions for 16 years in a row. Yield: 6.30%

NACCO Industries, Inc. (NC), through its subsidiaries, engages in lift trucks, small appliances, specialty retail, and mining businesses primarily in the Americas, Europe, and the Asia-Pacific. The company raised its quarterly dividend by 1.90% to 53.25 cents/share. This dividend champion has raised distributions for 26 years in a row. Yield: 2.10%

Republic Bancorp, Inc. (RBCAA) operates as the holding company for Republic Bank & Trust Company and Republic Bank, which provides banking, tax refund solutions, and mortgage banking services to individuals and businesses in the United States. The company raised its quarterly dividend by 7.70% to 15.40 cents/share. This marked the 13rh consecutive annual dividend increase for this dividend achiever. Yield: 3%

FactSet Research Systems Inc. (FDS) provides financial and economic information to investment community worldwide. The company raised its quarterly dividend by 17.40% to 27 cents/share. This marked the 13th consecutive annual dividend increase for this dividend achiever. Yield: 1.00%

National Bankshares, Inc. (NKSH) operates as the bank holding company for the National Bank of Blacksburg that provides a range of retail and commercial banking services to individuals, businesses, non profits, and local governments in Virginia. The company raised its semi-annual dividend by 2.1% to 48 cents/share. This dividend achiever has raised distributions for 12 years in a row. Yield: 3.70%

Delphi Financial Group, Inc. (DFG), together with its subsidiaries, provides integrated employee benefit services. The company operates in two segments, Group Employee Benefit Products and Asset Accumulation Products. The company raised its quarterly dividend by 9.10% to 12 cents/share. This marked the eleventh consecutive annual dividend increase for this dividend achiever. Yield: 1.60%

Chesapeake Utilities Corporation (CPK), through its subsidiaries, operates as a diversified utility company that primarily engages in regulated energy and unregulated energy businesses. The company raised its quarterly dividend by 4.5% to 34.50 cents/share. This marked the eighth consecutive annual dividend increase for the company. Yield: 3.30%

Franklin Electric Co., Inc. (FELE), together with its subsidiaries, engages in the design, manufacture, and distribution of groundwater and fuel pumping systems. It operates in two segments, Water Systems and Fueling Systems. The company raised its quarterly dividend by 3.80% to 13.50 cents/share. This marked the 19th consecutive annual dividend increase for the company. Yield: 1.20%

AmerisourceBergen Corporation (ABC), a pharmaceutical services company, provides drug distribution and related services to healthcare providers and pharmaceutical manufacturers in the United States, the United Kingdom, and Canada. The company raised its quarterly dividend by 15% to 11.50 cents/share. This marked the seventh consecutive annual dividend increase for the company. Yield: 1.10%

Assurant, Inc. (AIZ), through its subsidiaries, provides specialized insurance products and related services in North America and internationally. The company operates in four segments: Assurant Solutions, Assurant Specialty Property, Assurant Health, and Assurant Employee Benefits. The company raised its quarterly dividend by 12.50% to 18 cents/share. This marked the eighth consecutive annual dividend increase for the company. Yield: 1.90%

Portland General Electric Company (POR) operates as an integrated electric utility in Oregon. The company raised its quarterly dividend by 1.90% to 26.50 cents/share. This marked the sixth consecutive annual dividend increase for the company. Yield: 4.10%

National HealthCare Corporation (NHC), together with its subsidiaries, operates and manages long-term health care centers and associated assisted living centers, retirement centers, home health care programs in the United States. The company raised its quarterly dividend by 7.10% to 30 cents/share. This marked the eight consecutive annual dividend increase for the company. Yield: 2.50%

Not all of these stocks will be buys right now. However, by studying their characteristics, investors will be able to learn what made these companies able to generate a rising dividend stream over time. For others, this list could provide a starting point for further research.

In my analysis of Intel (INTC) I rated it as a hold. While there has been some strength in numbers over the past few years, the fluctuations in earnings for the preceding decade were concerning to say the least. That being said, Intel is the worldwide leader in microprocessors and has the scale to generate efficiencies in production that would aid in profitability. However tech spending is highly cyclical, which leads to EPS volatility. This could provide a ceiling to consistent dividend increases, and could also increases the risks of a dividend cut. In addition, the company needs to keep pouring billions annually in R&D in order to continuously churn out faster and better chips. Otherwise its customers would turn a blind eye to the company’s products. Right now the near term future for Intel makes it a buy. Investors need to decide if the company would be able to generate higher earnings in the future to support dividend growth before the purchase. That being said the stock fits my entry criteria and could be a decent addition in dividend portfolios, as it provides exposure to technology.

Full Disclosure: None

Relevant Articles:

- Intel Corporation (INTC) Dividend Stock Analysis

- Living off dividends in retirement

- Has the time for Tech Dividends arrived?

- Dividends are Powering Up the Tech Sector

Weekend Reading Links - May 15, 2011

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends4Life presented 10 Stocks That Have Paid Dividends Since The 1800s
• Dividend Growth Investor presented Best High Yield Dividend Growth Stocks
• The Dividend Guy presented AT&T Stock Analysis
• The Dividend Pig presented You Are Not A Contrarian Investor, and You Don’t Know Squat
  
• The Div Guy presented How to become a Millionaire
• Disciplined Approach to Investing presented Positive Dividend Actions Now At 2006 Level
• Dividend Monk presented Step 5: Research
• Dividend Partisan presented Top 20 Stocks Watchlist Updated
• Whopper Investments presented Low EV / EBITDA microcap stocks

Another interesting website which has featured several articles of mine includes The Daily Crux. The site has a section that specifically covers Income Investing, featuring the best article from the web.

There are some really good articles here, please take time and read a few of them.

Bemis Company (BMS) Dividend Stock Analysis

Bemis Company, Inc. (BMS) manufactures and sells flexible packaging products and pressure sensitive materials in the United States, Canada, Mexico, South America, Europe, and Asia. The company operates in two segments, Flexible Packaging and Pressure Sensitive Materials. The company is member of the S&P 500 and the S&P Dividend Aristocrats indexes. Bemis has paid uninterrupted dividends on its common stock since 1922 and increased payments to common shareholders every year for 28 years.



The most recent dividend increase was in February, when the Board of Directors approved a 4.40% increase to 24 cents/share. The major competitors of Bemis Company include Sonoco Company (SON), Sealed Air (SEE) and Temple-Inland (TIN).

Over the past decade this dividend growth stock has delivered an annualized total return of 10.10% to its loyal shareholders. The company has managed to deliver an increase in EPS of 3.70% per year since 2001. Analysts expect Bemis to earn $2.40 per share in 2011 and $2.68 per share in 2012. This would be a nice increase from the $1.83/share the company earned in 2010.


The company's strategy includes acquiring businesses that offer scale, access to new products and markets as well as superb packaging know-how. In 2010 Bemis acquired Alcan Packaging Foods Americas Unit from Rio Tinto (RTP) for $1.20 billion. This deal is expected to be accretive to EPS within 12 months. Bemis is also focusing its efforts on innovation in flexible packaging, in order to solidify its position in the market. Food packaging generates over two-thirds of the companies revenues. The positive fact from this is that since demand for food products is relatively stable, demand for Bemis's packaging should be relatively unaffected by economic weakness, as long as it maintains its market share. The rising commodity costs could affect earnings. Sales in the US also account for almost two-thirds of revenues. Europe accounts for over 15% of revenues. Sales to emerging markets in South America and Asia could generate strong volume growth for Bemis, because of the strong demand for packaging that extends the shelf life of goods there.



Over the past decade, the return on equity has been in a steady decline. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.



The annual dividend payment has increased by 7% per year since 2001, which is higher than the growth in EPS. A 7% growth in distributions translates into the dividend payment doubling every 10 years. If we look at historical data, going as far back as 1984, we see that Bemis has actually managed to double its dividend every seven years on average.



Over the past decade the dividend payout ratio has steadily increased. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.



Currently Bemis is trading at 17.60 times earnings, yields 2.90% and has a sustainable dividend payout. Despite the fact that the stock meets my entry criteria, the sluggish earnings growth coupled with high payout ratio make this otherwise fine dividend stock a hold.


Full Disclosure: None


Relevant Articles:


- T. Rowe Price Group (TROW) Dividend Stock Analysis
- McGraw-Hill (MHP) Dividend Stock Analysis
- Colgate-Palmolive (CL) Dividend Stock Analysis
- Coca-Cola (KO) Dividend Stock Analysis

Best High Yield Dividend Growth Stocks

Investors purchase dividend growth stocks with the intent of generating a higher stream of distributions over time that would meet or exceed inflation. Typical dividend growth stocks in the sweet spot have average to slightly above average yields and high dividend growth rates supported by rising earnings.

This works great for investors who have time before retiring. Some investors, who are ready to retire however, often wonder whether it would be possible to not only generate dividend growth which is equal to or higher than inflation, coupled with high current dividend yields. There is a solution for that, but it comes at a price. The price to pay is that most high dividend stocks which pay consistent dividends are typically concentrated in a few sectors such as Master Limited Partnerships, Real Estate Investment Trusts, Utilities, Tobacco, Telecom and a few others.
Some of the best high yield dividend stocks which have not only paid rising dividend payments to their shareholders but also offer generous yields include:

Kinder Morgan Energy Partners, L.P. (KMP) owns and manages energy transportation and storage assets. The company has raised distributions for 15 years in a row, yields 6.10% and has a ten year annual dividend growth rate of 10.90%. (analysis)

Enterprise Products Partners L.P. (EPD) provides a range of services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals in the continental United States, Canada, and Gulf of Mexico. The company has raised distributions for 14 years in a row, yields 5.80% and has a ten year annual dividend growth rate of 8.30%. (analysis)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. The company has raised distributions since 2008 and yields 3.70%. (analysis)

Altria Group, Inc. (MO), through its subsidiaries, engages in the manufacture and sale of cigarettes, wine, and other tobacco products in the United States and internationally. The company has raised distributions for 43 years in a row, yields 5.60% and has a ten year annual dividend growth rate of 11.70%. (analysis)

Universal Health Realty Income Trust (UHT) is a real estate investment trust (REIT) iwhich invests in health care and human service related facilities. The company has raised distributions for 22 years in a row, yields 5.70% and has a ten year annual dividend growth rate of 2.80% .(analysis)

National Retail Properties, Inc. (NNN) is a publicly owned equity real estate investment trust. that acquires, owns, manages, and develops retail properties in the United States. aThe company has raised distributions for 21 years in a row, yields 5.70% and has a ten year annual dividend growth rate of 1.90%. (analysis)

Piedmont Natural Gas Company, Inc. (PNY), an energy services company, distributes natural gas to residential, commercial, industrial, and power generation customers in portions of North Carolina, South Carolina, and Tennessee. The company has raised distributions for 33 years in a row, yields 3.70% and has a ten year annual dividend growth rate of 4.40%. (analysis)

AT&T Inc. (T), together with its subsidiaries, provides telecommunication services to consumers, businesses, and other service providers worldwide. The company has raised distributions for 27 years in a row, yields 5.50% and has a ten year annual dividend growth rate of 5.50%. (analysis)

Investors who are trying to generate sustainable income in retirement should not focus on the higher yielding sectors however. They should try to be diversified and hold at least 30 stocks representative of as many sectors as market conditions allow. Quality should never be sacrificed for diversification purposes of course, which is why building a diversified income portfolio takes time.

Full Disclosure: Long KMR, PM, MO, UHT, NNN, EPD

Relevant Articles:

- High yield stocks for current income

- Why Dividend Growth Stocks Rock?

- Four Characteristics of The Best Dividend Growth Stocks

- Are Dividend Investors Stock Pickers?

This article was included in the COPF #309

Twelve Income Stocks Rewarding Patient Dividend Investors

Success and riches do not happen overnight. It takes plenty of effort, trial and effort and a lot of time before reaching your true potential in any field. Successful dividend investing is no different. It is all about finding the right strategy, buy the right stocks at the right entry price, diversify and reinvest dividends selectively. Most importantly however, in order to have the power of reinvested dividends work for you, one has to have the patience to stick through thick and thin in their strategy, without abandoning it during bear markets for example. This healthy dose of patience would allow investors to see their capital compound over time.

Several dividend growth stocks raised distributions last week. The list includes:

PepsiCo, Inc. (PEP) manufactures, markets, and sells various foods, snacks, and carbonated and non-carbonated beverages worldwide. The company operates in four divisions: PepsiCo Americas Foods , PepsiCo Americas Beverages , PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. The company raised its quarterly distribution by 7.30% to 51.50 cents/share. This marked the sixth consecutive annual dividend increase for this dividend aristocrat. Yield: 3% (analysis)

Union Pacific Corporation (UNP), through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in North America. The company raised its quarterly distribution by 25% to 47.50 cents/share. This marked the sixth consecutive annual dividend increase for this stock. Yield: 1.90%

Exterran Partners, L.P. (EXLP) provides natural gas compression services in the United States and internationally. This master limited partnership raised quarterly distributions to 47.75 cents/unit. The company has raised distributions for 5 years in a row. Yield: 6.70%

Span-America Medical Systems, Inc. (SPAN) engages in the manufacture and distribution of various therapeutic support surfaces and related products utilizing polyurethane and other foam products for the medical, consumer, and industrial markets in the United States and Canada. The company raised its quarterly distribution by 10% to 11 cents/share. This marked the fourteenth consecutive annual dividend increase for this dividend achiever. Yield: 2.90 %

RLI Corp. (RLI), through its subsidiaries, underwrites property and casualty insurance primarily in the United States. The company operates in three segments: Casualty, Property, and Surety. The company raised its quarterly distribution by 3.40% to 30 cents/share. This marked the sixth consecutive annual dividend increase for this stock. Yield: 2%

Expeditors International of Washington, Inc. (EXPD) provides logistics services in the United States and internationally. The company raised its quarterly distribution by 25% to 25 cents/share. This marked the 17th consecutive annual dividend increase for this dividend achiever. Yield: 0.90%

Cardinal Health, Inc. (CAH) operates as a healthcare solutions company that provides health care products and services. The company operates in two segments, Pharmaceutical and Medical. The company raised its quarterly distribution by 10.30% to 21.5 cents/share. This marked the 22nd consecutive annual dividend increase this dividend achiever. Yield: 1.90%

CSX Corporation (CSX), together with its subsidiaries, provides rail-based transportation services in North America. The company raised its quarterly distribution by 38.50% to 36 cents/share. This marked the seventh consecutive annual dividend increase for this stock. Yield: 1.90%

TECO Energy, Inc. (TE), through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy in Florida. The company raised its quarterly distribution by 4.90% to 21.50 cents/share. This marked the sixth consecutive annual dividend increase for this stock. Yield: 4.50%

Regal Beloit Corporation (RBC), together with its subsidiaries, manufactures and sells electrical and mechanical products to original equipment manufacturers, distributors, and end users. The company raised its quarterly distribution by 5.90% to 18 cents/share. This marked the seventh consecutive annual dividend increase for this stock. Yield: 1 %

Torchmark Corporation (TMK), through its subsidiaries, provides individual life and supplemental health insurance products, and annuities to middle income households. The company raised its quarterly distribution by 3.10% to 16.50 cents/share. This marked the sixth consecutive annual dividend increase for this stock. Yield: 1 %

VSE Corporation (VSEC), together with its subsidiaries, provide logistics, engineering, legacy equipment sustainment, information technology (IT), construction management, and consulting services in the United States. The company raised its quarterly distribution by 16.70% to 7 cents/share. This marked the eight consecutive annual dividend increase for this stock. Yield: 1 %

Full Disclosure: Long PEP

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- Why Dividend Growth Stocks Rock?

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- A record number of consistent dividend companies raising dividends

Weekend Reading Links - May 8, 2011

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends4Life presented 7 Exceptional Dividend Growth Stocks With Quality Financials
• Dividend Growth Investor presented Six Dividend Stocks to Hold Forever
• Barel Karsan presented Lexmark: Another Falling Knife
• Dividend monk presented 20 Quick Ways to Check a Company
• The Passive Income Earner presented Dividend Yield: Bell Alliant (BA)
• The Dividend Guy presented Communications, Materials & Techno Stocks: Dividend Sector Winner Q1
• The Div Guy presented New Investment - Real Estate in CA
• Disciplined Approach to Investing presented Dividend Payers Outperform Non Payers In April
• Dividend Mantra presented his entry criteria for dividend stocks.
• Dividend Money presented Dividend Growth Model
• Compounding Returns presented Building Wealth is a Journey, Not a Destination
• Dividend Partisan presented Dividend Portfolio Update: May
• Whopper Investments presented An interesting but volatile value investment (APT)

There are some really good articles here, please take time and read a few of them.

Air Products and Chemicals (APD) Dividend Stock Analysis

Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company operates through five segments: Merchant Gases, Tonnage Gases, Electronics and Performance Materials and Equipment and Energy,. The company is member of the S&P 500 and the S&P Dividend Aristocrats indexes. Air Products and Chemicals has paid uninterrupted dividends on its common stock since 1954 and increased payments to common shareholders every year for 29 years. The most recent dividend increase was in March, when the Board of Directors approved a 18.40% increase to 38 cents/share. The major competitors of Air Products and Chemicals include Praxair (PX), Airgas (ARG) and Air Liquide (AIQUY).

Over the past decade this dividend growth stock has delivered an annualized total return of 10.60% to its loyal shareholders.

The company has managed to deliver an impressive increase in EPS of 9% per year since 2001. Analysts expect Air Products and Chemicals to earn $5.67 per share in 2011 and $6.32 per share in 2012. This would be a nice increase from the $4.74/share the company earned in 2010. Near term increases in EPS would be derived from higher volumes sold as well as cost saving initiatives at the company. Higher industrial gas volumes are propelled by the rebound in the wold economy, particularly in sectors such as electronics and petroleum refining. The industrial gases industry is typically characterised with high capital costs as a barrier to entry. However the amount of industrial gases has typically grown at twice the rate of the economy in the past.

Over the past decade, the return on equity has mostly ranged between 15% and 21%, with the exception of 2003 and 2009. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.

The annual dividend payment has increased by 10.40% per year since 2001, which is higher than the growth in EPS. A 10% growth in distributions translates into the dividend payment doubling every 7 years. If we look at historical data, going as far back as 1983, we see that Air Products and Chemicals has indeed managed to double its dividend every seven years on average.

Over the past decade the dividend payout ratio has mostly remained below 50%, with the exception of a brief spike in 2009. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently Air Products and Chemicals is trading at 18.80 times earnings, yields 2.60% and has a sustainable dividend payout. The stock meets my entry criteria and I would add to my position in it subject to availability of funds.

Full Disclosure: Long APD

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- The return of Financial Dividends

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- 33 Dividend Champions to Consider

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Six Dividend Stocks to Hold Forever

There are several characteristics that define the best dividend stocks out there. First some of the best dividend stocks have solid competitive advantages, and as a result competitors are having a difficult time replicating the company’s products and business model. Wal-Mart (WMT) operates so many stores, that they are able to deliver the lowest prices for consumers basically due to their sheer scale and constant investment in technology in order to improve processes.

Second, most of the greatest dividend stocks have strong brands, for which consumers are willing to pay a premium. After all, when consumers purchase toothpaste, they want to buy the brand they are familiar with, since teeth are important to most people. As a result someone who cares about their teeth would likely keep purchasing Colgate-Palmolive (CL) products.
Companies which have wide moats and strong brands essentially have great competitive advantages. If these products or services are durable and leave consumers hooked on them, then this only adds to the competitive advantage of such companies. McDonald’s (MCD) creates a long lasting impression on little kids with their Happy Meals, the toys and the atmosphere. They are cultivating their future customers today, knowing these customers will keep coming for decades and bringing revenue in the process. People rarely change their tastes, which is why someone who likes McDonald’s burgers would probably keep spending their money at the golden arches.

The companies with the above characteristics are able to not only have a stable market for their products or services, but also a loyal fan base which is willing to pay the right price for the right product or service. As a result, some of the best dividends paying companies are able to pass on price increases to the consumer, which ensures that they maintain their profitability. As a result inflation is not a major obstacle to such conglomerates. This also helps these companies generate a rising stream of earnings, which fuels future dividend growth.

It is important however to avoid overpaying for dividend stocks, as this could lead to subpar performance for the first few years of the long term investment. This could cause the investor to doubt their investing skills, and would increase the likelihood that they would sell at an unfortunate time. Sometimes what separates the winners from the rest of the pack in the world of dividend investing is the psychological factor.

The six stocks which investors could hold forever, until proven otherwise, include:

Philip Morris International Inc. (PM), through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. The company has raised dividends every year since it was spun-off from Altria (MO) in 2008 and yields 3.70%. (analysis)

McDonald'’s Corporation (MCD), together with its subsidiaries, operates as a worldwide foodservice retailer. The company has raised dividends for 34 consecutive years and yields 3.10%. (analysis)

Wal-Mart Stores, Inc. (WMT) operates retail stores in various formats worldwide. This dividend aristocrat has raised dividends for 37 years in a row and yields 2.70%. (analysis)

Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. This dividend champion has raised distributions for 48 years in a row and currently yields 2.80%. (analysis)

The Procter & Gamble Company (PG) provides consumer packaged goods in the United States and internationally. The company has consistently raised dividends for 54 years in a row and currently yields 3.30% (analysis)

The Coca-Cola Company (KO) manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. The company has reward investors with higher dividends for 49 consecutive years and currently yields 2.80%. (analysis)

It is important to realize that certain factors such as a dividend cut could cause a stock to be marked as a sell. Given the strong earnings power of the above companies however, this should not be an immediate issue for long term investors.

Full Disclosure: Long PM, MCD, WMT, CL, PG, KO

Relevant Articles:

- Buy and hold dividend investing is not dead

- Best Dividends Stocks for the Long Run

- Avoid Dividend Cutters at All Costs

- Warren Buffett – A Closet Dividend Investor

A record number of consistent dividend companies raising distributions

There was a record number of consistent dividend payers, which announced dividend increases over the past week. As a result, in order to make this information more readable, I have segregated the stocks that raised distributions in four groups: dividend champions, dividend achievers, potential dividend achievers and master limited partnerships.

Dividend Champions

Dividend champions are companies which have raised distributions for over twenty-five consecutive years. You could read my review of the dividend champions here.

Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. Johnson & Johnson raised its quarterly dividend by 5.60% to 57 cents/share. This dividend champion has raised distributions for 49 years in a row. Yield: 3.50% (analysis)

Exxon Mobil Corporation (XOM) engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. Exxon-Mobil raised its quarterly dividends by 6.80% to 47 cents/share. This dividend aristocrat has managed to consistently raise dividends for 29 years in a row. Yield: 2.10% (analysis)

W.W. Grainger, Inc. (GWW) and its subsidiaries distribute facilities maintenance and other related products and services in the United States, Canada, Japan, and Mexico. W.W. Grainger raised its quarterly distributions by 22.20% to 66 cents/share. Yield: 1.80% (analysis)

American States Water Company (AWR), through its subsidiaries, provides water, electric, and contracted services in the United States. The company raised its quarterly distribution by 7.70% to 28 cents/share. This dividend champion has raised distributions for 57 years in a row. Yield: 3.20%

The Gorman-Rupp Company (GRC) engages in the design, manufacture, and sale of pumps and related fluid control products worldwide. The company raised its quarterly distribution by 7.10% to 11.25 cents/share. This dividend champion has raised distributions for 38 years in a row. Yield: 1.10%

California Water Service Group (CWT), through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii. The company raised its quarterly distribution by 3.40% to 11.25 cents/share. This dividend champion has raised distributions for 45 years in a row. Yield: 3.30%

Parker Hannifin Corporation (PH) manufactures fluid power systems, electromechanical controls, and related components. The company raised its quarterly distribution by 15.60% to 11.25 cents/share. This dividend champion has raised distributions for 55 years in a row. Yield: 1.60%

Dividend Achievers

Dividend achievers are companies which have raised distributions for at least ten years in a row. You could read my review of this dividend index here.

Chevron Corporation (CVX), through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The company raised its quarterly dividends by 8.30% to 78 cents/share. This dividend achiever has raised distributions for 24 years in a row. Yield: 2.90% (analysis)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. The company raised its quarterly dividends by 15.40% to 75 cents/share. This dividend achiever has raised distributions for 16 years in a row. Yield: 1.80%

Cullen/Frost Bankers, Inc. (CFR) , through its subsidiaries, provides various banking and financial products and services primarily in Texas. The company raised its quarterly dividends by 2.20% to 46 cents/share. This dividend achiever has raised distributions for 18 years in a row. Yield: 3.10%

Imperial Oil Ltd. (IMO) engages in the exploration, production, and sale of crude oil and natural gas in Canada. The company raised its quarterly dividends by 10% to 11 cents/share. This international dividend achiever has raised distributions for 19 years in a row. Yield: 0.90%

PartnerRe Ltd. (PRE), through its subsidiaries, provides reinsurance solutions worldwide. The company raised its quarterly dividends by 9.10% to 60 cents/share. This dividend achiever has raised distributions for 18 years in a row. Yield: 3%

UGI Corporation (UGI), through its subsidiaries, distributes and markets energy products and related services in the United States and internationally. The company raised its quarterly dividends by 4% to 26 cents/share. This dividend achiever has raised distributions for 24 years in a row. Yield: 3.10%

Artesian Resources Corporation (ARTNA), through its subsidiaries, provides water, wastewater, and engineering services on the Delmarva Peninsula. The company raised its quarterly dividends by 0.50% to 19.02 cents/share. This dividend achiever has raised distributions for 14 years in a row. Yield: 3.90%

Valmont Industries, Inc. (VMI) produces fabricated metal products; pole and tower structures; and mechanized irrigation systems in the United States and internationally. The company raised its quarterly dividends by 9.10% to 18 cents/share. This dividend achiever has raised distributions for 11 years in a row. Yield: 0.70%

Master Limited Partnerships

Master limited partnerships are pass-through entities, most of which have operations in the energy sector. Master limited partnerships in the energy sector are mostly involved in oil and gas distribution through pipelines, although there are others which are involved in exploration and production, storage and processing of energy products. Check my overview of master limited partnerships here.

AmeriGas Partners, L.P. (APU), through its subsidiary, AmeriGas Propane, L.P., operates as a retail propane distributor in the United States. This MLP raised quarterly distributions to 74.50 cent/unit. Amerigas Partners has raised distributions for 6 years in a row. Yield: 6.20%

Energy Transfer Equity, L.P. (ETE), through its direct and indirect investments in the limited partner and general partner interests in Energy Transfer Partners, L.P., engages in midstream, intrastate, and interstate transportation of natural gas, as well as in storage of natural gas in the United States. This MLP raised quarterly distributions to 56 cent/unit. Energy Transfer Equity, L.P. has raised distributions for 5 years in a row. Yield: 4.90%

Holly Energy Partners, L.P. (HEP) operates a system of petroleum product and crude oil pipelines, storage tanks, distribution terminals, and loading rack facilities. This MLP raised quarterly distributions to 85.50 cent/unit. Holly Energy Partners, L.P. has raised distributions for 7 years in a row. Yield:6.30%

Magellan Midstream Partners, L.P. (MMP) , together with its subsidiaries, engages in the transportation, storage, and distribution of refined petroleum products in the United States. This MLP raised quarterly distributions to 77 cent/unit. Magellan Midstream Partners, L.P. has raised distributions for 11 years in a row. Yield:5%

Sunoco Logistics Partners L.P. (SXL) engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. This MLP raised quarterly distributions to $1.195/unit. Sunoco Logistics Partners L.P. has raised distributions for 10 years in a row. Yield: 5.40%

DCP Midstream Partners, LP (DPM), together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, storing, and selling natural gas in the United States. This MLP raised quarterly distributions to 62.50 cent/unit. DCP Midstream Partners, LP has raised distributions for 6 years in a row. Yield: 5.70%

Future Dividend Achievers

As a rule, I only invest in dividend stocks which have raised dividends for at least ten consecutive years. Otherwise investors could get whipsawed by short-term dividend raises which were caused by some temporary increase in business activity. A ten year period covers at least two cycles of economic expansion and contraction. Dividend paying companies that can afford to increase dividends through thick and thin are the ones to research further.

Arch Coal, Inc. (ACI) engages in the production and sale of steam and metallurgical coal from surface and underground mines to power plants, steel mills, and industrial facilities in the United States. The company raised its distributions paid to stockholders by 10% to 11 cents/share. This marked the eight consecutive annual dividend increase for the company. Yield: 1.30%

Ameriprise Financial, Inc. (AMP), through its subsidiaries, provides financial planning, products, and services primarily in the United States. The company raised its distributions paid to stockholders by 27.80% to 23 cents/share. This marked the seventh consecutive annual dividend increase for the company. Yield: 1.50%

BOK Financial Corporation (BOKF), a financial holding company, provides various financial products and services to commercial and industrial customers, and other financial institutions and consumers in the United States. The company raised its distributions paid to stockholders by 10% to 27.50 cents/share. This marked the seventh consecutive annual dividend increase for the company. Yield: 2.10%

Northrop Grumman Corporation (NOC) provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. The company raised its distributions paid to stockholders by 6.40% to 50 cents/share. This marked the eight consecutive annual dividend increase for the company. Yield: 3.20%

The Williams Companies, Inc. (WMB), through its subsidiaries, engages in finding, producing, gathering, processing, and transporting natural gas primarily in the United States. The company raised its distributions paid to stockholders by 60% to 20 cents/share. This marked the ninth consecutive annual dividend increase for the company. Yield: 2.50%

Donegal Group Inc. (DGICA), through its subsidiaries, provides personal and commercial lines of property and casualty insurance products to businesses and individuals in the United States. The company raised its distributions on it’s A shares by 4.30% to 12 cents/share. The company raised its distributions on its B shares by 4.90% to 10.75 cents/share. The yield on A shares is 3.60%, whereas the yield on the B shares is 2.60%. This marked the ninth consecutive annual dividend increase for the company.

Columbia Sportswear Company (COLM) engages in the design, sourcing, marketing, and distribution of outdoor apparel, footwear, and related accessories and equipment in the United States, Europe, the Middle East, Africa, Latin America, the Asia Pacific, and Canada. The company raised its quarterly distributions by 10% to 22 cents/share. Yield: 1.30%

Full Disclosure: Long JNJ, GWW, CVX, XOM

Relevant Articles:

- Dividend Achievers Offer Income Growth and Capital Appreciation

- Dividend Champions - The Best List for Dividend Investors

- Master Limited Partnerships (MLPs) – an island of opportunity for dividend investors

- The ten year dividend growth requirement