A stock with a high yield doesn’t mean much if the dividend is cut or eliminated, and the stock price declines significantly. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the additional risk. One measure of dividend sustainability is the ability of management to consistently raise their dividends each year.
Below are several companies raising the dividend growth bar one year by increasing cash dividends paid to their shareholders:
Harman International Industries, Incorporated (NYSE:HAR) designs, develops, manufactures, and markets audio products and electronic systems worldwide. June 26th the company increased its quarterly dividend 100% to $0.30 per share. The increased dividend will go into effect for the new fiscal year, which starts July 1, 2013, and the first quarterly payment will be in September 2013. The yield based on the new payout is 2.3%.
Duke Energy Corporation (NYSE:DUK) operates as an energy company in the United States and Latin America. June 25th the company increased its quarterly dividend 2% to $0.78 per share. The dividend is payable on Sept. 16, 2013, to shareholders of record at the close of business Aug. 16, 2013. The yield based on the new payout is 4.7%.
Medtronic, Inc. (NYSE:MDT) manufactures and sells device-based medical therapies worldwide. June 21st the company increased its quarterly dividend 7.8% to $0.28 per share. The dividend is payable July 26, 2013 to shareholders of record on July 5, 2013. The yield based on the new payout is 2.2%.
John Wiley & Sons, Inc. (JW-A) provides content and content-enabled digital services to customers worldwide. June 20th the company increased its quarterly dividend 4% to $0.25 per share. The dividend is payable July 15, 2013 to shareholders of record on July 1, 2013. The yield based on the new payout is 2.5%.
RAIT Financial Trust (NYSE:RAS) operates as a self-managed and self-advised real estate investment trust (REIT). The company, through its subsidiaries, invests in, manages, and services real estate-related assets with a focus on commercial real estate. June 20th the company increased its quarterly dividend 8% to $0.13 per share. The dividend is payable July 31, 2013 to holders of record on July 12, 2013. The ex-dividend date is July 10, 2013. The yield based on the new payout is 7.1%.
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 MDT in my Dividend Growth Portfolio and long DUK in my High-Yield portfolio. See a list of all my dividend growth holdings here.
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