The Boston Consulting Group doesn’t discount the role that stock buybacks can play in boosting near-term returns for some companies. But the firm’s research indicates that stock buybacks do not change investors’ estimates for long-term earnings-per-share growth, or induce them to accord a company a higher valuation multiple. By contrast, it says, dividend growth has a far more positive long-term impact.
Below are several companies that recently used cash to increase dividends paid to their shareholders:
HCP Inc. (HCP, Financial) is an independent hybrid real estate investment trust. The fund invests in real estate markets of the U.S. Jan. 30, the company increased its quarterly dividend 3.8% to $0.545 per share. the dividend is payable Feb. 25, 2014 to stockholders of record on Feb. 10, 2014. The yield based on the new payout is 5.6%.
NRG Yield Inc. (NYLD, Financial) acquires, owns, and operates contracted renewable and conventional generation, and thermal infrastructure assets in the U.S. Jan. 30, the company increased its quarterly dividend 10% to $0.33 per share. The dividend is payable on March 17, 2014, to stockholders of record on March 3, 2014. The yield based on the new payout is 3.4%.
Noble Corporation (NE, Financial) operates as an offshore drilling contractor for the oil and gas industry. The company offers contract drilling services for oil and gas wells. Jan. 30, the company increased its quarterly dividend 50% to $0.375 per share. The dividend is payable Feb. 20, 2014, to stockholders of record on Feb. 10, 2014. The yield based on the new payout is 4.7%.
ALLETE Inc. (ALE, Financial) primarily engages in the generation, transmission, and distribution of coal-fired, hydro, wind, and biomass co-fired power in the U.S. Jan. 30, the company increased its quarterly dividend 3.2% to $0.49 per share. The dividend is payable March 1, 2014 to stockholders of record on Feb. 14, 2014. The yield based on the new payout is 4.0%.
SJW Corp. (SJW, Financial) operates as a water utility company. Jan. 30, the company increased its quarterly dividend 2.7% to $0.1875 per share. The dividend is payable March 3, 2014 to stockholders of record on Feb. 10, 2014. The yield based on the new payout is 2.6%.
Destination Maternity Corporation (DEST, Financial) designs and retails maternity apparel in the U.S. Jan. 30, the company increased its quarterly dividend 6.7% to $0.20 per share. The dividend is payable March 28, 2014, to stockholders of record on March 7, 2014. The yield based on the new payout is 2.9%.
Time Warner Cable Inc. (TWC, Financial) offers video, high-speed data, and voice services to residential and business service customers over its broadband cable systems in the U.S. Jan. 30, the company increased its quarterly dividend 15.4% to $0.75 per share. the dividend is payable March 7, 2014 to stockholders of record on Feb. 28, 2014. The yield based on the new payout is 2.2%.
AvalonBay Communities Inc. (AVB, Financial) engages in the development, redevelopment, acquisition, ownership and operation of multifamily communities in the U.S. Jan. 28, the company increased its quarterly dividend 8.4% to $1.16 per share. the dividend is payable April 15, 2014 to stockholders of record on March 31, 2014. The yield based on the new payout is 3.9%.
California Water Service Group (CWT, Financial) provides water utility and other related services in California, Washington, New Mexico and Hawaii. Jan. 28, the company increased its quarterly dividend 1.6% to $0.1625 per share. The dividend is payable Feb. 21, 2014, to stockholders of record on Feb. 10, 2014. The yield based on the new payout is 2.8%.
DuPont Fabros Technology Inc. (DFT), a real estate investment trust (REIT), engages in the ownership, acquisition, development, operation, management, and lease of large-scale data center facilities in the U.S. Jan. 28, the company increased its quarterly dividend 40% to $0.35 per share. The dividend is payable April 15, 2014, to stockholders of record on April 4, 2014. The yield based on the new payout is 5.6%.
Tupperware Brands Corp. (TUP, Financial) operates as a direct seller of various products across a range of brands and categories through an independent sales force worldwide. Jan. 28, the company increased its current dividend 9.7% to $0.68 per share. The dividend is payable April 4, 2014, to stockholders of record on March 19, 2014. The yield based on the new payout is 3.4%.
The Dow Chemical Company (DOW, Financial) manufactures and supplies chemical products for use as raw materials worldwide. Jan. 28, the company increased its quarterly dividend 15.6% to $0.37 per share. The dividend is payable April 30, 2014, to stockholders of record on March 31, 2014. The yield based on the new payout is 3.3%.
WellPoint Inc. (WLP), a health benefits company, through its subsidiaries, offers network-based managed care plans to large and small employer, individual, Medicaid and senior markets in the U.S. Jan. 28, the company increased its quarterly dividend 16.7% to $0.4375 pr share. the dividend is payable March 25, 2014, to stockholders of record on March 10, 2014. The yield based on the new payout is 2.0%.
National Health Investors Inc. (NHI), a real estate investment trust (REIT), invests in health care properties, primarily in the long-term care industry in the U.S. Jan. 24, the company increased its quarterly dividend 4.8% to $0.77 per share. The dividend is payable payable on May 9, 2014, to stockholders of record on March 31, 2014. The yield based on the new payout is 5.0%.
Xerox Corporation (XRX, Financial) provides business process and document management services worldwide. Jan. 24, the company increased its quarterly dividend 8.7% to $0.0625 per share. The dividend is payable April 30, 2014, to stockholders of record on March 31, 2014. The yield based on the new payout is 2.4%.
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 recommended 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 HCP in my Dividend Growth Stocks Portfolio, and NHI in my High-Yield Portfolio. See a list of all my dividend growth holdings here.
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