Saturday, August 30, 2014

Dividend Increases, August 16-31, 2014


After last month's nosedive on the last trading day, the S&P 500 crossed 2,000 while the Dow is back above 17,000. The markets closed on a high note despite the U.K. raising their terrorist alert level to Severe in fear of possible ISIS attacks in Britain and Russia's apparent invasion of the Ukraine. And, the Middle East remains a mess.

I wonder if these geopolitical factors eventually will take a toll on the markets. Many commentators suggest that a significant correction is imminent. The thing is, as long as everyone is calling for a significant correction, it likely won't happen. Stocks probably will continue to climb the wall of worry.

Either way, as dividend growth investors, these issues shouldn't influence our thinking too much. As I said last month, dividends are not affected by stock market volatility, at least not the kind of dividends we're after...

Twice a month, I report on dividend increase announcements for stocks in my watch list. It is a useful way to identify dividend growth candidates, because companies that increase their dividends regularly show confidence in future earnings growth. Personally, I use the information I gather to track the yield on cost (YoC) of stocks I own. When dividends increase, I need to make YoC adjustments and update DivGro's projected annual dividend income. This month, the dividend payments of two of DivGro's holdings, MO and BBL, will be increasing.

Below is the table of dividend increases announced in the last two weeks of August, sorted by the last column, %Increase. Dividend amounts are annualized.

Dividend Increases: August 16-31, 2014

Company

Ticker
Price
(Aug 29)
Previous
Dividend
New
Dividend
Current
Yield

%Increase
HCC Insurance Holdings, Inc. HCC 50.15 0.90 1.182.35% +31.11
Brinker International, Inc. EAT 48.90 0.96 1.122.29% +16.67
G&K Services Inc GK 55.89 1.08 1.242.22% +14.81
Stage Stores Inc SSI 17.47 0.50 0.563.21% +12.00
Harris Corporation HRS 71.39 1.68 1.882.63% +11.90
Triangle Capital Corporation TCAP 27.48 2.16 2.368.59% +9.26
Altria Group Inc MO 43.08 1.92 2.084.83% +8.33
BHP Billiton plc (ADR) BBL 63.48 2.36 2.483.91% +5.08
Previous post: Dividend Increases: August 1-15, 2014

I own shares in MO and BBL:

• Altria Group Inc (MO)  growth 45 yrs | yield 3.91% @ $43.08 | 5-yr CAGR 9.21%
On August 21, tobacco giant MO announced an increase of its quarterly dividend to 52¢ a share, an increase of 8.33%. This is MO's 48th dividend increase in 45 years. The dividend is payable on October 10 to shareholders of record on September 15. As I own 75 shares of MO, the increase adds $12 to DivGro's projected annual dividend income and YoC is now 5.89%.

• 
BHP Billiton plc (BBL) growth 12 yrs | yield 3.91% @ $63.48 | 5-yr CAGR 10.63%
On Wednesday, August 20, BBL, a diversified natural resources company, declared a new semiannual dividend, payable to shareholders of record on September 5. The dividend of $1.24 a share will be paid on September 23. The increase adds $6.88 to DivGro's projected annual dividend income and YoC is now 4.25%.

All the other dividend increases announced in this period top 7%:

• HCC Insurance Holdings, Inc. (HCC) growth 18 yrs | yield 2.35% @ $50.15 | 5-yr CAGR 9.61%
Headquartered in Houston, Texas, HCC underwrites non-correlated specialty insurance products worldwide. On August 20, the company declared a dividend of 29.5¢ per share, payable on October 15 to shareholders of record on October 1. 

• Brinker International (EAT) | growth 10 yrs | yield 2.29% @ $48.90 | 5-yr CAGR 14.87%
Founded in 1975, EAT owns, develops, operates, and franchises casual dining restaurants under the Chili's Grill & Bar and Maggiano's Little Italy brands. Recently, EAT increased its annual dividend by nearly 17% to 28¢ per share. The dividend is payable on September 25, to shareholders of record on September 5.

• G&K Services Inc (GK) | growth 9 yrs | yield 2.22% @ $55.89 | 5-yr CAGR 31.12%

GK provides branded uniform and facility services programs in the United States, Canada, and the Dominican Republic. The company declared a quarterly dividend of 31¢ per share, an increase of more than 14% over the prior quarterly dividend. The dividend is payable September 26 to shareholders of record on September 11. 


• State Stores Inc (SSI) | growth 5 yrs | yield 3.21% @ $17.47 | 5-yr CAGR 18.89%
SSI is a specialty department store retailer in the United States. The company operates stores under the nameplates of Bealls, Goody's, Palais Royal, Peebles, and Stage. SSI's board of directors declared an increase in its quarterly dividend to 14¢ per share, an increase of 12%. The dividend is payable September 17. 

• Harris Corporation (HRS) | growth 13 yrs | yield 2.63% @ $71.39 | 5-yr CAGR 17.68%
Based in Melbourne, Florida, HRS is an international provider of communications and information technology worldwide. Recently, HRS increased its quarterly dividend from 42¢ per share to 47¢ per share, an increase of nearly 12%. The dividend is payable on September 23, to shareholders of record on September 5. 

• Triangle Capital Corporation (TCAP) | growth 7 yrs | yield 8.59% @ $27.48 | 5-yr CAGR 8.45%
Business development company TCAP invests capital in established companies, focusing on mezzanine financing with equity components. Recently, the board of directors of TCAP declared a quarterly dividend of 54¢ per share and an extra dividend of 5¢ per share, for a total dividend of 59¢ for the third quarter of 2014.  The dividend is payable on September 23, to shareholders of record on September 10. 

Please note: these stocks are not recommendations – readers should do their own research before buying shares.

Do you own shares of any of these companies (or do you plan to buy any of them)?

4 comments :

  1. I own MO. Really like the increasing dividend and yield.

    ReplyDelete
    Replies
    1. Indeed -- my yield on cost is almost 6% now! If they manage to raise by 8% annually going forward, I'll hit 12.72% in 10 years... Nice!

      Delete
  2. BBL seems a little cheap right now. Seems like a very good buying opportunity and I am going to keep this on my watch list. Thanks for sharing!

    ReplyDelete
    Replies
    1. Yeah, BBL tumbled a bit after announcing a spinoff. Shareholders will receive shares in the spinoff company. Some investors in London claim they cannot hold shares outside the UK, meaning they will have to sell the new shares.

      Delete

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