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Dividend Roundup: BBY, WAG, KW, DUK, IAG

Here are the five latest dividend-related developments featured on The Dynamic Dividend:

Best Buy Gives Shareholders a 7% Raise

Best Buy Co. Inc. (BBY) declared a quarterly dividend of $0.16 per share this morning, boosting its payout by 6.7% and sending its shares higher in pre-market trading. The big box electronics retailer is currently on pace to improve its dividend output for the eighth consecutive year.

The company also announced a $5 billion share repurchase authorization, which will replace the previous $5.5 billion program and its remaining balance of approximately $800 million.

Shares of BBY have received a nice boost to $32.83 (+4.09%) in pre-market trading, as investors apparently didn’t see this news coming. (So you’re officially reading a 100% free source of under-the-radar insight.)

Best Buy initiated its dividend in 2003 and has raised its annual output every year since, more than tripling its payout in the process.

Walgreen Beats Q3 Estimates Ahead of Dividend Hike

Walgreen Company (WAG) reported third-quarter results that topped Wall Street’s expectations this morning, but news of a busted partnership pushes its shares lower during pre-market trading.

The company posted earnings of $0.65 per share on a record $18.37 billion in revenue, while analysts were expecting a profit of $0.62 per share on $18.33 billion in sales. Net earnings rose 30.2% year-over-year, while sales grew by 6.8%. Total sales at comparable stores gained 4.1%.

Walgreen’s stock initially received a pop from the results, but quickly pulled back. The culprit is unrelated to the company’s third-quarter performance: Investors were caught off guard by Walgreen’s announcement that it plans not to be a part of Express Scripts’ (ESRX) provider network next year as a result of unsuccessful contract renewal negotiations with the pharmacy benefit manager.

Shares of WAG have sunk to $43.20 (-4.38%) in pre-market trading, where they feature a 1.62% dividend yield.

Walgreens has raised its dividend every year dating back to 1976, a streak only three retailers currently have beat: Lowe’s (LOW), Target (TGT), and Walmart (WMT). The Class C Dividend Dynamo traditionally announces its annual dividend hike in early July, and I expect this year to be no different.

Considering the company currently has a forward payout ratio of just 23%, it would be pretty ludicrous if this was the year it elected to end its streak, which has actually built momentum through the recession: Walgreens has increased its dividend by a compound annual growth rate of 24.3% over the last six years, grown its payout by 20% or better for six consecutive calendar years, and improved it by a double-digit percentage for eight straight years. Last year the company gave its shareholders a 27% raise, which was its biggest dividend hike ever.

Kennedy Wilson Initiates Quarterly Dividend

Kennedy Wilson (KW) declared a quarterly dividend of $0.04 per share today, a first for the international real estate investment and services firm.

Shares of KW closed Tuesday’s session trading at $12.07, where they now feature a shiny new 1.33% dividend yield.

Kennedy Wilson was founded in 1977 and went public in November 2009. The company’s stock began trading on the New York Stock Exchange in March of last year.

Duke Energy Raises Dividend For Fifth Straight Year

Duke Energy Corporation (DUK) declared a quarterly dividend of $0.25 per share today, pushing its payout higher by 2.04%. This marks the fifth consecutive year the electric power company has given its shareholders a raise.

This is the 85th consecutive year Duke has paid a quarterly dividend, and its growth streak would be even longer had it not been forced to reset its payout following the spin-off of its natural gas arm, Spectra Energy (SE), in 2007. Duke has announced a mid-year payout increase every year since that transaction.

This is, however, the company’s weakest dividend hike on a percentage basis since the Spectra spinoff, “beating” last year’s 2.08% increase. Duke’s three previous raises all pushed its payout by at least 4.35%.

Shares of DUK closed Tuesday’s session trading at $18.80, where they now carry a 5.32% dividend yield.

IAMGOLD Boosts Dividend by 150% (Or Perhaps 157%)

IAMGOLD Corporation (IAG) announced a 150% increase to its dividend this afternoon, pushing the Canadian gold miner’s yield above the 1% threshold.

The company said its dividend rate is rising from C$0.08* all the way up to C$0.20* per share. IAMGOLD, which previously returned cash to its shareholders just once each year, also said it’s moving to evenly-split semiannual dividend payments. The first dividend of C$0.10* per share will arrive in July.

Shares of IAG closed Tuesday’s session trading at $19.89, where the new dividend rate (and current exchange rate) produces a 1.04%* dividend yield.

This is the second consecutive year IAMGOLD has given its shareholders a big raise. The company increased its payout by 33% in 2010.

*Last year’s dividend of $0.08 per share was actually declared (and paid) in USD, not CAD. This discrepancy in the company’s press release means the dividend hike isn’t exactly 150% — it’s actually more like 157%. I assumed the new rate will be paid in CAD — as stated in the press release — when calculating the dividend yield in the third paragraph. If it’s actually to be paid in USD, the new yield is 1.01%.

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