Most casual income investors focus on current yield, which is important. However, if your objective as an income investor is to build a portfolio of securities with increasing income, then Yield on Cost is an excellent metric to measure your progress. Yield on cost is simply the annual dividend rate times the number of shares owned divided by what you paid for the investment (basis). As companies increase their dividend, your yield on cost goes up.
Working to increase their shareholders' yield on cost, these companies recently announced higher cash dividend payments:
Ford Motor Company (F, Financial) engages in the development, manufacture, distribution, and service of vehicles, parts, and accessories worldwide. Jan. 9, the company increased its quarterly dividend 25% to $0.125 per share. the dividend is payable March 3, 2014, to stockholders of record on Jan. 31, 2014. The yield based on the new payout is 3.2%.
FLY Leasing Limited (FLY, Financial) leases commercial jet aircraft worldwide. Jan. 9, the company increased its quarterly dividend 13.6% to $0.25 per share. The dividend is payable Feb. 20, 2014, to stockholders of record on Jan. 31, 2014. The yield based on the new payout is 6.2%.
Sovran Self Storage Inc. (SSS, Financial) operates as a real estate investment trust (REIT). Jan. 6, the company increased its dividend 28.3% to $0.68 per share. The dividend is payable Jan. 27, 2014, to stockholders of record on Jan. 16, 2014. The yield based on the new payout is 4.2%.
Spectra Energy Corp (SE, Financial) owns and operates a portfolio of natural gas-related energy assets in North America. Jan. 6, the company increased its quarterly dividend 9.8% to $0.335 per share. The dividend is payable March 10, 2014, to stockholders of record on Feb. 14, 2014. The yield based on the new payout is 3.8%.
DDR Corp. (DDR, Financial) operates as a real estate investment trust (REIT) in the United States. The company engages in acquiring, developing, redeveloping, owning, leasing, and managing shopping centers, mini-malls, and lifestyle centers. Jan. 6, the company increased its quarterly dividend 15% to $0.155 per share. The dividend is payable April 8, 2014, to stockholders of record on March 13, 2014. The yield based on the new payout is 4.0%.
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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