Astute investors understand the power of growing dividends. Over time, a low-yielding stock will increase its payout (along with its yield-on-cost) and normally the share price follows the growing dividend. But what if you need income today? High-yield investments sometimes sacrifice growth, but not always.
Below are three investments yielding more than 5% that recently increased their cash dividends:
Kinder Morgan Energy Partners LP (KMP) operates as a pipeline transportation and energy storage company in North America. Oct. 18, the company increased its quarterly distribution 2.4% to $1.26 per share. The distribution is payable Nov. 15 to shareholders of record as of Oct. 31. The yield based on the new payout is 5.9%.
Omega Healthcare Investors Inc. (NYSE:OHI) operates as a real estate investment trust (REIT) in the U.S. Oct. 17, the company increased its quarterly dividend 4.8% to $0.44 per share. The dividend is payable Nov. 15, 2012 to common stockholders of record as of the close of business on Oct. 31, 2012. The yield based on the new payout is 7.5%.
Calumet Specialty Products Partners LP (NASDAQ:CLMT) produces and sells specialty hydrocarbon products in North America. Oct. 16, the company increased its quarterly dividend 5.1% to $0.62 per unit. the distribution is payable Nov. 14, 2012 to holders of record of such units at the close of business on Nov. 2, 2012. The yield based on the new payout is 8.1%.
Below are several other companies that have recently increased their cash dividends to shareholders:
A. Schulman Inc. (NASDAQ:SHLM) supplies plastic compounds and resins for packaging, consumer products, industrial, and automotive applications. Oct. 18, the company increased its quarterly dividend 2.6% to $0.195 per share. The dividend is payable Nov. 1, 2012, to shareholders of record on Oct. 19, 2012. The yield based on the new payout is 3.2%.
Pacific Continental Corporation (NASDAQ:PCBK) operates as the bank holding company for Pacific Continental Bank that provides commercial banking services in Oregon and Washington. Oct. 17, the company increased its quarterly dividend 16.7% to $0.07 per share. Additionally, the board declared a special cash dividend of $0.04 per share. Both dividends are payable Nov. 13, 2012, to shareholders of record on Oct. 31, 2012. The yield based on the new payout is 3.1%.
Susquehanna Bancshares Inc. (SUSQ) provides retail and commercial banking, and financial services in the mid-Atlantic region. Oct. 17, the company increased its quarterly dividend 16.7% to $0.07 per share. The dividend is payable Nov. 20, 2012 to shareholders of record Oct. 30, 2012. The yield based on the new payout is 2.7%.
MVC (NYSE:MVC) is a business development company that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalizations of companies in a variety of industries. Oct. 16, the company increased its quarterly 12.5% to $0.135 per share. The dividend is payable Oct. 31, 2012 to shareholders of record on Oct. 25, 2012. The yield based on the new payout is 4.3%.
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 OHI in my High-Yield Portfolio. See a list of all my dividend growth holdings here.
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