As a young investor I followed an aggressive growth strategy. Having narrowly missed the tech bubble bursting, I purchased my first dividend stock on Dec. 11, 2003. I had heard dividend investments were supposed to be safer, but knew very little else about the strategy. I was fortunate enough to accidentally buy enough good dividend stocks to learn the “secret” of dividend investing.
It is not necessarily starting with a high-yield investment, but ending up with a high-yield investment. This usually occurs by buying stocks with a moderate yield and a long history of growing dividends and letting time do its job. This week several companies are building future yield by increasing the cash dividends paid to their shareholders:
MTS Systems Corporation (NASDAQ:MTSC) supplies test systems and industrial position sensors in the Americas, Europe and Asia. August 25, the company increased its quarterly dividend 25% to $0.25 per share. The dividend is payable on Oct. 3, 2011, to shareholders of record as of the close of business on Sept. 15, 2011. The yield based on the new payout is 2.9%.
Gold Resource Corporation (GORO), an exploration stage company, engages in the exploration for and production of gold, silver, precious metals and base metals, including copper, lead and zinc, primarily in Mexico. August 25, the company increased its dividend to $0.05 per share and moved to a monthly distribution. The dividend is payable on Sept. 23, 2011 to shareholders of record as of Sept. 12, 2011. The yield based on the new payout is 2.7%.
HollyFrontier Corporation (NYSE:HFC) operates as an independent petroleum refiner and marketer in the United States. August 25, the company increased its quarterly dividend 16.7% to $0.175 per share. The dividend is payable on Oct. 4, 2011, to shareholders of record on Sept. 16, 2011. The yield based on the new payout is 1.1%.
First Pactrust Bancorp Inc. (FPTB) operates as a holding company for Pacific Trust Bank that provides retail banking services primarily in San Diego and Riverside Counties, Calif. August 23, the company increased its quarterly dividend 4.5% to $0.115 per share. The dividend is payable on Oct. 3, 2011, to shareholders of record as of Sept. 9, 2011. The yield based on the new payout is 3.8%.
MGE Energy Inc. (MGE) operates as a public utility holding company. August 19, the company increased its quarterly dividend to $0.3826 per share. The dividend is payable Sept. 15, 2011, to shareholders of record Sept. 1, 2011. The yield based on the new payout is 3.6%.
Selecting stocks with increasing dividends is critical for an income growth strategy. The above list contains stocks that recently raised their dividends; it is not a list of recommend buys. As always, due diligence should be performed before buying or selling any stock. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: No position in the aforementioned securities. See a list of all my dividend growth holdings here.
- High Yield, High Risk Dividend Stocks
- How Much Money Will You Need For Retirement?
- Finding Dividend Stock Gems In An Overbought Market
- Dividend Stocks Are My Conviction
- The Dividend Freeze
- High Yield Dividend Stocks in Gurus' Portfolio
- Top dividend stocks of Warren Buffett
- Top dividend stocks of George Soros
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