Ned Davis Research examined the relative performances of stocks between 1972 and 2006 and established a link between rising dividends and superior long-term returns. The study found S&P 500 stocks that consistently increased their dividends returned 10.4% total return (dividends plus share price appreciation), while those that did not increase their dividends returned only 8.2%. The 2.2% advantage of the dividend raisers would equate to an additional $1,802 per $100 invested in 1972.
Below are several companies looking to provide their shareholders with superior long-term returns by increasing their cash dividends:
RPM International Inc. (NYSE:RPM) manufactures, markets and sells various specialty chemical products to industrial and consumer markets worldwide. October 6, the company increased its quarterly dividend 2.4% to $0.215 per share. The dividend is payable on Oct. 31, 2011, to stockholders of record as of Oct. 17, 2011. This represents the 38th consecutive year of increased cash dividends paid to its stockholders, which places RPM in an elite category of less than half of one percent of all 19,000 publicly traded U.S. companies. The yield based on the new payout is 4.2%.
Epoch Investment Partners Inc. (EPHC) is a publicly owned investment manager. October 5, the company increased its quarterly 33% to $0.08 per share. The dividend is payable on Nov. 11, 2011 to shareholders of record as of Oct. 28, 2011. The yield based on the new payout is 2.1%.
Corning Incorporated (NYSE:GLW) manufactures and processes specialty glass and ceramics products worldwide. October 5th the company increased its quarterly dividend 50% to $0.075 per share. The dividend is payable on Dec. 16, 2011 to holders of record Nov. 16, 2011. The yield based on the new payout is 2.4%.
Northwest Natural Gas Company (NYSE:NWN) provides natural gas service to about 675,000 customers through 14,000 miles of mains and service lines in western Oregon and southwestern Washington. October 4, the company increased its quarterly dividend 2.3% to $0.445 per share. The dividend is payable Nov. 15, 2011, to shareholders of record on Oct. 31, 2011. The yield based on the new payout is 4.0%.
QR Energy LP (QRE) owns and acquires producing oil and natural gas properties in North America. October 4, the company increased its quarterly dividend 15% to $0.4750 per share. The dividend is payable on Feb. 10, 2012, to stockholders of record on Jan. 30, 2012, with an ex-dividend date of January 26, 2012. The yield based on the new payout is 9.9%.
Senior Housing Properties Trust (NASDAQ:SNH) is a real estate investment trust (REIT) that owns 320 properties in 36 states and Washington, D.C, including 226 senior living properties and two rehabilitation hospitals. October 4, the company increased its quarterly dividend 2.7% to $0.38 per common share. The dividend is payable to shareholders of record as of the close of business on Oct. 19, 2011, and distributed on or about Nov. 11, 2011. The yield based on the new payout is 7.4%.
Bank of the Ozarks Inc. (NASDAQ:OZRK) has banking operations through 90 offices, including Arkansas, Texas, Georgia, Florida, North Carolina, South Carolina and Alabama. October, the company increased its quarterly dividend 5.3% to $0.10 per share. The dividend is payable Oct. 21, 2011 to shareholders of record as of Oct. 14, 2011. The company has increased its quarterly dividend in seven of the last eight quarters and completed a two-for-one stock split on Aug. 16, 2011. The yield based on the new payout is 1.9%.
SMF Energy Corporation (NASDAQ:FUEL) is a leading provider of petroleum product distribution services, transportation logistics and emergency response services. October 1, the company increased its quarterly dividend 20% to $0.015 per share. The dividend is payable to holders of record of the company's common stock at the close of business on Nov. 14, 2011, to be paid on Dec. 2, 2011. The yield based on the new payout is 2.6%.
CLARCOR Inc. (NYSE:CLC) is a global provider of filtration products, filtration systems and services, and consumer and industrial packaging products. September 28, the company increased its quarterly dividend 14% to $0.12 per share. This increase represents the 29th consecutive year that the board has raised the annual dividend. The dividend is payable Friday, Oct. 21, 2011, to shareholders of record Tuesday, Oct, 11, 2011. The yield based on the new payout is 1.2%.
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: Long SNH. See a list of all my dividend growth holdings here.
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