The Boston Consulting Group doesn’t discount the role that stock buybacks can play in boosting near-term returns for some companies. But the firm’s research indicates that stock buybacks do not change investors’ estimates for long-term earnings-per-share growth, or induce them to accord a company a higher valuation multiple. By contrast, it says dividend growth has a far more positive long-term impact.
Below are several companies that recently used cash to increase dividends paid to their shareholders:
Artesian Resources Corporation (NASDAQ:ARTNA) provides water, wastewater, and engineering services on the Delmarva Peninsula. September 28, the company increased its quarterly dividend 1.5% to $0.1930 per share. The dividend is payable on Nov. 23, 2011 to shareholders of record at the close of business on Nov. 11, 2011. The yield based on the new payout is 4.7%.
Atlantic Tele-Network Inc. (NASDAQ:ATNI) provides telecommunications services to rural, niche and other under-served markets and geographies in the United States, Bermuda and the Caribbean. September 28, the company increased its quarterly dividend 4.5% to 23 cents per share. The dividend is payable on Oct. 14, 2011, to stockholders of record as of Oct. 7, 2011. This is the 13th consecutive annual increase in the company's dividend. The yield based on the new payout is 2.9%.
Comtech Telecommunications Corp. (NASDAQ:CMTL) engages in the design, development, production and marketing of products, systems and services for communications solutions. September 27, the company increased its quarterly dividend 10% to .275 cents per share. The dividend is payable on November 22, 2011 to shareholders of record at the close of business on Oct. 21, 2011. The yield based on the new payout is 4%.
Hickory Tech Corporation (HTCO) provides integrated communications services to business and residential customers in the Midwest. September 26th the company increased its quarterly dividend 4% to $0.14 per share. The dividend is payable on Dec. 5, 2011 to shareholders of record on Nov. 15, 2011. The yield based on the new payout is 6.1%.
ConAgra Foods Inc. (NYSE:CAG) operates as a food company primarily in North America. It operates in two segments, Consumer Foods and Commercial Foods. September 23, the company increased its quarterly dividend 4% to 24 cents per share. The dividend is payable on on Dec. 1, 2011, to stockholders of record at the close of business on Oct. 31, 2011. The yield based on the new payout is 4%.
Covidien Public Limited Company (NYSE:COV) develops, manufactures and sells healthcare products for use in clinical and home settings. September 22, the company increased its quarterly dividend 12.5% to to .225 cents per share. The dividend is payable November 4 to shareholders as of October 13. The yield based on the new payout is 1.9%.
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.
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