Daily Dividend Report: VIA.B, FLO, UNM, DDS, UNH, DCI, EPB, EP
Viacom Inc. (VIA.B) declared a quarterly dividend of $0.25 per share this afternoon, pushing its payout higher by 67%.
Shares of Viacom are currently trading at $50.30, where they now feature a 1.99% dividend yield.
This is the first time the entertainment giant has given its shareholders a raise. The company behind MTV, Nickelodeon, Paramount and several other entertainment brands initiated its quarterly dividend last June.
Flowers Foods Announces Dividend Hike, Stock Split
Flowers Foods (FLO) announced a 12.5% dividend hike and a 3-for-2 stock split prior to today’s annual shareholders meeting. This is the ninth consecutive year the packaged bakery food company has raised its dividend.
The press release is a bit wordy, so to simplify: Flowers is essentially raising its quarterly dividend from $0.20 to $0.225 per share. After the split, the payout will adjust to $0.15 per share to accommodate for the increased share count. Both the split and the company’s next dividend will are payable on June 24 to shareholders of record on June 10.
Shares of FLO opened Wednesday’s session trading at $32.55, where they now yield 2.76%.
Flowers has increased its annual dividend total every year since reinstating its payout in 2002.
Unum Group Raises Dividend for Third Straight Year
Unum Group (UNM) declared a quarterly dividend of $0.105 per share this morning, a 13.5% improvement over the $0.0925 paid each of the previous four quarters by the insurance holding company. This is the third consecutive year Unum has given its shareholders a raise.
Shares of Unum opened Wednesday’s session trading at $25.72, where they now feature a 1.63% dividend yield.
Unum cut its quarterly dividend by nearly 50% (from $0.1475 per share down to $0.075) in 2003, and held its payout flat until 2009, when it began its current dividend growth streak. The company has raised its payout by a total of 40% in the last three years, and has the potential to keep the momentum going. Analysts currently expect Unum to earn $3.30 per share next year, which gives the company a very manageable 12.7% forward payout ratio.
Dillard’s Raises Dividend For First Time in 15 Years
Dillard’s Inc. (DDS) declared a quarterly dividend of $0.05 per share this morning, a 25% improvement over the $0.04 paid every quarter since 1996 by the department store operator.
Shares of DDS opened Wednesday’s session trading at $52.80, where they now feature a paltry 0.38% dividend yield.
Analysts expect Dillard’s to earn $4.40 per share next year, which gives the company a tiny 4.6% forward payout ratio even after today’s rate increase. With that much wiggle room, Dillard’s could clearly put a huge emphasis on dividend growth if it chooses to go that route. Even a big 560% jump to a quarterly payout of $0.33 per share would push its forward payout ratio to just 30%, and provide shareholders with a very solid 2.50% dividend yield.
But let’s not hold our breath. A nominal one-penny dividend hike after 15 years of flatness could be the beginning of a larger trend, but it could just as easily be followed by another 15 years of dormancy. Furthermore, there is no language in the press release that underscores a new-found emphasis on dividend growth. The dividend hike is relegated to the second paragraph in a two-paragraph release.
In the first paragraph, the company announces the approval of a $250 million share repurchase plan.
UnitedHealth Reinforces Emphasis on Dividend Growth
UnitedHealth Group (UNH) declared a quarterly dividend of $0.1625 this morning, pushing its payout higher by 30%.
The move is a strong indication that the largest U.S. insurer by sales wasn’t just looking to make a one-time splash when it gave shareholders a 1,567% (!!!) raise last year. After years of carrying an irrelevant annual payout, the company genuinely seems to be putting an emphasis on strong and meaningful dividend growth.
UnitedHealth’s board also authorized a fresh 110 million share buyback program, replacing the 120 million share authorization from last year. The old plan had a balance of roughly 28 million shares remaining.
Shares of UnitedHealth closed Tuesday’s session trading at $47.96, where they now feature a 1.36% dividend yield.
UnitedHealth instantly became a great value for income investors following last year’s big dividend hike. The company closed 2010 ranked 47th on my list of The 100 Best Values Among Dividend-Paying Stocks. As of yesterday’s close, shares are up more than 33% so far this year.
Donaldson Gives Shareholders Yet Another Raise
Donaldson Company Inc. (DCI) declared a quarterly dividend of $0.15 per share today, raising its payout for the fourth time since the beginning of last year.
The new rate represents a 15% increase over the $0.13 paid each of the last two quarters by the manufacturer of filtration systems and replacement parts, and a 25% improvement over the dividend it paid during the same period last year. The company has now raised its payout by a total of 30.4% since the start of 2010.
Donaldson has improved its annual dividend total every year dating back to 1996, qualifying it for Class E Dividend Dynamo status. With a forward payout ratio that remains below 20%, the company has plenty of room to keep this impressive dividend growth rolling.
Shares of Donaldson are currently trading at $57.75, where they now feature a 1.04% dividend yield.
El Paso Plans to Split Company, Jumpstart Dividend
El Paso Corporation (EP) today announced plans to separate the company into two publicly traded businesses by the end of the year, sending shares to a new 52-week high in early trading.
El Paso will essentially hold onto its pipeline and midstream assets — including its interests in El Paso Pipeline Partners LP (EPB) — while spinning its exploration and production business into a separate, yet-unnamed entity.
More importantly to income investors, the company said it plans to pay an annual dividend of $0.60 per share in 2012 and target an annual growth rate for its payout in the low double-digits. The move would reinvigorate a dividend that has been stuck in irrelevancy for more than seven years. El Paso currently pays a quarterly dividend of just $0.01 per share, and hasn’t distributed more than $0.05 per share in a single quarter since slashing its payout by more than 80% in 2003.
Shares of EP have popped as high as $20.43 (+7.64%) in early trading, which is a new 52-week high. At that level, the stock currently features a 0.20% dividend yield. Obviously, that will change soon. Assuming an annual dividend rate of $0.60 per share arrives on time, investors who buy at the aforementioned price will be sitting on a yield-on-cost of 2.94% next year.
It was only a matter of time before El Paso Corporation returned its payout to relevancy, given the income generated by El Paso Pipeline Partners, of which El Paso Corporation owns a 49% limited partner interest, 2% general partner interest, and 100% of the incentive distribution rights. The partnership was formed by El Paso Corporation to own and operate natural gas pipelines, and has increased its payout every quarter since it began returning cash to unit-holders in 2008 — most recently raising its distribution for the 13th consecutive quarter. Units of El Paso Corporation currently yield 5.42%.
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