Saturday, December 14, 2013

Dividend Increases, December 1-15, 2013

Regular dividend increases are important for stocks in a dividend growth portfolio. Since companies must grow their earnings sufficiently to continue to afford their growing dividend payments, monitoring dividend increases over time is one way to assess the long-term health of dividend paying companies.

Every month, I report dividend adjustments to stocks in my watch list.  I compile information from a screening feature available to subscribers at Dividend.com. In addition to monitoring changes that might influence my assessment of a stock's attractiveness, I do this to keep track of yield on cost (YoC) for stocks I own.

As announced last time, I'm increasing the frequency of my posts reporting dividend adjustments. I'll be posting these twice a month, mid-month and end-of-month. Doing so reduces the time I spend compiling each post and provides the information in a more timely fashion.

The following table provides a summary of recent dividend increases for stocks in my watch list, sorted by the last column, %Increase. Dividend amounts are annualized.

Dividend Increases: Dec 1 - Dec 15, 2013

Company

Ticker
Price
(Dec 13)
Previous
Dividend
New
Dividend
Current
Yield

%Increase
Helmerich & Payne, Inc. HP 79.52 2.00 2.50 3.14% +25.00
ACE Limited ACE 99.26 2.04 2.52 2.54% +23.53
The Hanover Insurance Group, Inc. THG 58.59 1.32 1.48 2.53% +12.12
Enbridge Inc. ENB 41.38 1.26 1.40 3.38% +11.11
OGE Energy Corp. OGE 33.51 0.84 0.90 2.69% +7.78
Erie Indemnity Company ERIE 70.28 2.37 2.54 3.61% +7.17
Edison International EIX 45.68 1.35 1.423.11% +5.19
AT&T Inc. T 33.85 1.80 1.845.44% +2.22
W.P. Carey Inc. WPC 60.96 3.44 3.485.71% +1.16
Nucor Corporation NUE 51.59 1.47 1.482.87% +0.68
Nippon Telegraph & Telephone Corp. NTT 26.08 0.82 0.772.97% -5.41

Stocks I own in DivGro are highlighted.

ACE's dividend increase of 23.53% raises current yield to 2.54%. The next quarterly dividend of 63c per share will be payed on January 31 to shareholders of record on January 13. I bought ACE after this dividend increase was announced, so my yield on cost is not affected.

NTT is a semi-annual dividend payer with a pattern of paying one smaller and one larger dividend every calendar year. The pattern of payments since 2009 looks like this:
($0.29 $0.34) ($0.34 $0.36) ($0.37 $0.45) ($0.44 $0.49($0.41 $0.39
From the last two dividend payments, it looks like NTT has reduced its annual dividend over last year. However, the reason is that NTT pays dividends in yen. Looking at dividend payments in yen, the pattern since 2009 looks like this:
¥55   ¥60 ) ( ¥60   ¥60 ) ( ¥60   ¥70 ) ( ¥70   ¥80 ) ( ¥80   ¥80 )
The reason, of course, is the impact of the currency exchange rate on dividend payments in dollars, as illustrated in the following chart from Yahoo! Finance:

I'll keep my shares of NTT despite the effective decrease in dividend payments. Of course, should NTT fail to increase its dividend payments in future (in yen terms), I'll reconsider. 

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