When stock prices start dropping, our primal instinct of flight kicks in and we want to sell. In many cases that is the time to be buying. However, sometimes selling a stock is the right thing to do. In determining when to sell a dividend stock, I have one hard and fast rule: When an individual stock held as a dividend investment lowers its dividend, immediately sell it.
Below are several companies making the case not to be sold by raising their cash dividends:
CVS Caremark Corporation (NYSE:CVS) operates as a pharmacy services company in the United States. December 20 the company increased its quarterly dividend 30% to $0.1625 per share. The dividend is payable on February 2, 2012, to stockholders of record on January 23, 2012. The yield based on the new payout is 1.6%.
Washington Federal, Inc. (WSFL) operates as the holding company for Washington Federal, which provides various financial services in the United States. December 19th the company increased its quarterly dividend 33% to $0.08 per share. The dividend is payable on January 13, 2012 to common stockholders of record on December 30, 2011. The yield based on the new payout is 2.4%.
Crexus Investment Corp. (NYSE:CXS) operates as a specialty finance company in the United States. December 19th the company increased its quarterly dividend 16.7% to $0.35 per share. This dividend is payable January 26, 2012 to common shareholders of record on December 29, 2011. The ex-dividend date is December 27, 2011. The yield based on the new payout is 13.3%.
AT&T Inc. (NYSE:T) provides telecommunication services to consumers, businesses, and other service providers worldwide. December 16th the company increased its quarterly dividend 2.3% to $0.44 per share. The dividend is payable on Feb. 1, 2012 to common stockholders of record on Jan. 10, 2012. The yield based on the new payout is 6.1%.
The Andersons, Inc. (NASDAQ:ANDE) engages in the grain, ethanol, plant nutrient, railcar leasing and repair, turf products production, and general merchandise retailing businesses. December 16th the company increased its quarterly dividend 36% to $0.15 per share. The dividend is payable January 24, 2012, to shareholders of record on January 3, 2012. The yield based on the new payout is 1.4%.
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 T (Dividend Growth Portfolio). See a list of all my dividend growth holdings here.
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