Dividend Increases for June 2017

“American Tower Corporation is a REIT that has almost 150,000 Wireless towers .”

A List of notable Dividend Increases for June 2017

The following Notable Companies raised its Dividend in June 2017: American Tower Corporation, Alexandria Real Estate Corporation, United Health Group, Legg Mason, FedEx, Heico, El Paso Electric, Bed Bath & Beyond, Horizon Bancorp, H&R Block, Target, Caterpillar, United Technologies,Two Harbors Investment, Realty Income, W.P. Carey, Shoe Carnival, New Residential Investment Corp., The Kroger Co., Darden Restaurants, Inc., Whole Foods Market, Inc., General Mills Inc., Worthington Industries,Inc., Bank of America Corporation,

 


Bank of America Corporation (BAC)

Bank of America:

Through our eight lines of businesses, we focus on helping individuals navigate every stage of their financial lives, working with companies—large and small—to drive the economy forward, and providing insights, ideas and award-winning research for institutional investors.

Bank of America lines of Business includes: Retail Banking, Small Business Banking, U.S. Trust, Merrill Lynch, Business Banking, Global Commercial Banking, Global Investment Banking and Global Markets.

Bank of America has a current Market Cap of approximately $244 Billion dollars.

In its June 2017 dividend announcement Bank of America has announced an Increase in its Quarterly dividend from $0.075 per share to $0.12 per share.

Its new annual dividend is now $0.48 per share.


Worthington Industries, Inc. (WOR)

Worthington Industries manufacturers a wide range of industrial products such as Oil & Gas Equipment, Propane Cylinders , Steel, Specialty Storage Tanks, Alternative Fuels and Fire and Rescue Equipment. It has a current Market Cap of about $3 Billion dollars.

In its June 2017 Dividend announcement Worthington Industries has increased its Quarterly dividend 5% from $0.20 to $0.21 per share.

Its new annual dividend is now $0.84 per share.


General Mills Inc. (GIS)

General Mills started in 1866 as a Flour Mill. Today it is one of the Worlds largest food companies with brands such as : Betty Crocker, Pilsbury, Nature Valley, Yoplait, Progresso Soup and much more ! It has a current Market Cap of $32 Billion dollars.

In its June 2017 dividend declaration General Mills announced a 2% increase in its dividend. its Quarterly Dividend has increased from $0.48 to $0.49 per share.

Its new annual Dividend is now $1.96 per share.


Darden Restaurants Inc. (DRI)

Darden Restaurants with a current Market Cap of over $11.5 Billion dollars operates many popular restaurant brands that most will recognize such as Olive Garden, Longhorn Steakhouse, Bahama Breeze, Yard House, Seasons 52 and more.

In its June 2017 Dividend Declaration Darden Restaurants announced a Dividend Increase of 12.5% bringing its Quarterly dividend from $0.56 to $0.63 per share.

Its new annual dividend is now $2.52 per share.


Whole Foods Market, Inc. (WFM)

Whole Foods Market is the Healthy option Supermarket. Its IPO (Initial Public Offering) was in 1992 and has a current Market Cap of almost $14 Billion dollars. Whole Foods Market is currently in the process of being acquired by Amazon/

Whole Foods announced a Dividend Increased of its Quarterly Dividend by 28.5% from $0.14 to $0.18 per share in June 2017.

Its new annual dividend is now $0.72 per share.


New Residential Investment Corp. (NRZ)

New Residential Investment is a REIT (Real Estate Investment Trust).

New Residential Investment Corp. (NYSE: NRZ) is a publicly traded real estate investment trust (“REIT”) that focuses on investing in, and actively managing, investments primarily related to residential real estate.

We aim to drive strong risk-adjusted returns primarily through investments in (i) Excess Mortgage Servicing Rights (“MSRs”), (ii) Servicer Advances, (iii) non-Agency residential mortgage backed securities (“RMBS”) and associated call rights.

New Residential currently has a Market Cap of approximately $5 Billion dollars and is externally managed.

New Residential announced a Dividend Increase of 4% in June 2017, its quarterly dividend has increased from $0.48 to $0.50 per share.

Its new annual dividend is now $2.00 per share.


The Kroger Co. (KR)

About Kroger:

The Kroger Co. (NYSE:KR) is one of the world’s largest grocery retailers, with fiscal 2016 sales of $115.3 billion. The Kroger Co. Family of Stores spans many states with store formats that include grocery and multi-department stores, discount, convenience stores and jewelry stores. We operate under nearly two dozen banners, all of which share the same belief in building strong local ties and brand loyalty with our customers.

Kroger has a current Market Cap of over $21 Billion dollars.

In it Dividend Declaration of June 2017 Kroger announced an Increase in its quarterly dividend of 4% from $0.12 to $0.125 per share.

Its new annual dividend is now $0.50 per share.


Shoe Carnival, Inc. (SCVL)

About Shoe Carnival:

Shoe Carnival, Inc. is one of the nation’s largest family footwear retailers, offering a broad assortment of moderately priced dress, casual and athletic footwear for men, women and children with emphasis on national and regional name brands. As of December 1, 2014, the Company operates 404 stores in 33 states and Puerto Rico, and offers online shopping. Headquartered in Evansville, IN, Shoe Carnival trades on the NASDAQ Stock Market LLC under the symbol SCVL

Shoe carnival has a Market Cap of less than $356 Million dollars.

In June 2017 Shoe Carnival announced a Dividend Increase of its Quarterly dividend by 7% from $0.07 to $0.075 per share.

Its new annual Dividend is now $0.30 per share.


Two Harbors Investment Corp. (TWO)

Two Harbors Investment Corp.:

Two Harbors Investment Corp. is a Maryland corporation focused on investing, financing and managing residential mortgage-backed securities (RMBS) and related investments.

Our objective is to provide attractive risk-adjusted returns to our stockholders over the long term, primarily through dividends and secondarily through capital appreciation. We selectively acquire and manage an investment portfolio of our target assets, which is constructed to generate attractive returns through market cycles. We focus on security selection and implement a relative value investment approach across various sectors within the mortgage market.

Two Harbors Investment has a current Market Cap of approximately $3.5 Billion dollars.

In its June 2017 Dividend declaration Two Harbors announced a dividend increase of 4% from $0.25 to $0.26 per share.

Its new annual dividend is now $1.04 per share.


Realty Income Corporation (O)

Realty Income Corporation is very popular with REIT investors. It is known for its great growth over the years and is considered the creme De la creme of REIT stocks. It has a diversified portfolio of almost 5,000 properties located in 48 states, has paid dividends for 563 months and increased its dividend for 79 consecutive quarters! Realty Income has a current Market Cap of almost $16 Billion dollars.

In June 2017 Realty Income announced a Monthly Dividend Increase of .2% from $0.211 per share to $0.2115 per share.

Its new annual dividend is now $2.538 per share.


W.P. Carey Inc. (WPC)

W.P. Carey is a Diversified REIT. Its portfolio of properties include over $8 Billion in assets, 900 properties with about 90 million square feet of space. The property sectors include over 16 segments and the properties are located in the United States and in over 8 other countries around the world. W.P. Carey has a current Market Cap of over $7 Billion dollars.

In June 2017 W.P. Carey announced a Quarterly Dividend Increase of 1/2% from $0.995 to $1.00 per share.

Annually from $3.98 to $4.00 per share.


United Technologies Corporation (UTX)

United Technologies Corporation is a Global Conglomerate. MANY may not be familiar with the company  as a whole but chances are you will recognize one or more  of its individual companies. Its companies include: Otis Elevators, Carrier Air Conditioners, Pratt & Whitney (Aircraft Engines) , and United Technologies Aerospace division. These along with hundreds of name brand products easily make them a household name. United Technologies has a current Market Cap of over $96 Billion dollars.

In June 2017 United Technologies announced a Dividend Increase of 6% from $0.66 to $0.70 per share.

Its new annual dividend is now $2.80 per share.


Caterpillar Inc. (CAT)

Caterpillar roots go back to 1881 when Benjamin Holt built his first combine harvester. Today it operates under the following Brands: CAT, CAT Financial, CAT Reman, CAT Rental Store, Anchor, Asiatrak, F.G. Wilson, Hindustan, Hypac, MAK, MWM, Olympian,Prentiss,  Perkins,   Progress Rail, Pyroban, SEM, Zhenghou SIWEI, Solar Turbines, Turbomach, & Turner Power Train Systems. Caterpillar has a current Market Cap of over $60 Billion dollars.

In its June 2017 Dividend Announcement Caterpillar Increased its Dividend 1% from $.77 to $0.78 per share.

Its new annual dividend is  now $31.2 per share.


Target Corporation (TGT)

Target Corporation is a controversial retailer that has angered a large percentage of its consumer base in recent years by its promotion of allowing access to its restrooms by transgenders despite concerns by patrons of allowing same sex individuals to use either restroom. The Corporate leadership has refuse to budge from their positions while its customer base is eroding. it has a current Market Cap of approximately 30 Billion dollars.

In June 2017 Target raised its Dividend 3% from $0.60 to $0.62 per share.

Its new annual dividend is now $2.48 per share.


H&R Block Inc. (HRB )

H&R Block provides tax services through a network of over 12,000 retail locations across the U.S. It also has digital tax preparation software for do it yourself. It its latest information provided it claims to have help process over 24 million tax returns in the previous year.

In June 2017 H&R Block increased its quarterly Dividend 9%, from $0.22 to $0.24 per share.

Its new annual Dividend is $0.96


Horizon Bancorp (HBNC)

Horizon Bancorp is a Regional Bank serving Ohio and Michigan. Founded in 1873 . Horizon Bancorp currently has 59 Locations and has a Market Cap of $595 Million.

In its Dividend declaration of June 2017 Horizon announced a Dividend Increase of 18% raising its quarterly dividend per share from $0.11 to $0.13 per share.

Horizon Bancorp’s  new annual Dividend is now $0.52 per share.


Bed Bath & Beyond (BBBY)

Bed Bath & Beyond is a Specialty Retailer that was founded in 1971.The company operates over 2000 stores worldwide, not only the Bed Bath & Beyond stores but additionally other stores under other brand names such as , BuyBuy Baby, Face Value, World Market, Christmas Tree Shops and That! or and That!. It has a current Market Cap of almost $5.5 Billion dollars.

In its June 2017 Dividend declaration Bed Bath & Beyond Increased its quarterly Dividend 20% from $0.13 to $0.15 per share.

Annually its new Dividend is $0.60 per share.


El Paso Electric Company  (EE)

Founded in 1901 El Paso Electric Company is a regional eletric utility provider servicing about a 1/2 million customers in West Texas and Southern New Mexico. It has a Market Cap of $2.17 Billion dollars.

In June 2017 El Paso Electric announced it was Increasing its quarterly dividend 8% from $0.31 to $0.335 per share.

Its new annual dividend is $1.34 per share.


HEICO Corporation (HEI)

Most have probably never heard of HEICO Corporation, but don’t let that fool you, it is a major player in Aviation providing products and services to major airlines. It operates in two distinct divisions, the Flight Support group and it Electronic Technologies group.  It has a current Market Cap of over $5.5 Billion dollars.

In June 2017 HEICO announced it was raising its Semi Annual Dividend 11% from $0.072 to $0.08 per share.

HEICO’s new annual dividend is now $0.24 per share.


FedEx Corporation (FDX)

FedEx operates Internationally as a Air Delivery and Freight Services Company. FedEx (Federal Express Corporation) was founded in Little Rock, AR in 1971 by Frederick W. Smith.   It now operates in 220 countries and territories. Its revenue last year was over $50 Billion dollars. Its current Market Cap is approximately $56 Billion dollars.

In its recent Dividend Announcement of June 2017 FedEx (FDX) has announced an Increase  of 25% in its quarterly Dividend from $0.40 to $0.50 per share.

Its new Annual Dividend is now $2.00 per share.


Universal Health Realty Income Trust (UHT)

Universal Health Realty is a REIT that has investments in 66 properties across the United States. The properties include Medical Office Buildings, Acute Care facilities, Freestanding emergency Centers, Sub Acute Care Facilities and Child Care Facilities. It has a current market cap of over $900 Million Dollars. It was founded in 1986.

In June 2017 Universal Health Realty announced an increase in it quarterly dividend of 1% from $0.655 to $0.66 per share.

Universal Health Realty’s new annual dividend is now $ 2.64 per share.


Legg Mason Inc. (LM)

Legg Mason is an Investment Management company whose products include Mutual Funds, ETFs, Closed End Funds, Money Market Accounts and Educational Savings accounts (529 accounts) among other products. Legg Mason was founded in 1899, is headquarted in Baltimore, Maryland. Legg Mason has over $700 Billion of assets under its management and has a current Market Cap of over $3.6 Billion dollars.

In June 2017 Legg Mason announced an Increase in its quarterly  Dividend of 27% from $0.22 to $0.28 per share.

Legg Mason’s new Annual Dividend is $ 1.12 per share.


UnitedHealth Group Incorporated (UNH)

UnitedHealth Group operates under two distinct business platforms. The first of which as a Health Insurance provider which includes Community and State Insurance Services , Employer and Individual , Medicare and Retirement and Global Services. The second platform is “Optum” which includes OptumHealth , Optumsight and OptumRX. The second platform provides health management and collaborative care, software and information products and pharmacy care services. UnitedHealth Group has a current Market Cap of $175 Billion Dollars.

As of June 2017 UnitedHealth has increased its quarterly dividend from $0.625 to $0.75 per share.

It has a new Annual Dividend of $3.00 per share.


Alexandria Real Estate Equities, Inc. (ARE)

Alexandria Real Estate Equities is an Urban Ofice REIT that focuses on Life science and Technology building clusters. Its portfolio includes over 28 million square feet of space.  Present locations include Boston, MA; New York City, NY; Seattle, Washington; San Francisco and San Diego, CA; and Maryland. Its current Market Cap is $14 Billion Dollars.

In June 2017 Alexandria Real Estate Equities announced an Increased in its quarterly Dividend from $0.83 to $0.86 per share.

Its new Annual Dividend is now $3.44 per share.


American Tower Corporation (AMT)

American Tower Corporation is a REIT that has almost 150,000 Wireless towers . It builds ,and operates the towers and leases them to multiple tenants. Its current Market Cap is over $56 Billion Dollars.

In its June 2017 Dividend announcement American Tower has Increased its quarterly dividend from $0.62 to $0.64 per share.

Its new Annual Dividend is now $2.56 per share.



For a complete list of Dividend Increases and Dividend Decreases please visit our  Dividend Stock News Page .

Previous Dividend Increase or Dividend Decrease articles :

 

Dividend Increases for May 2017

Dividend Decreases for May 2017

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Dividend Decreases for June 2017

“Superior Industries International is a Auto Parts company that manufacturers cast aluminum wheels “

A list of notable U.S. Based  Dividend Decreases for June 2017 –

 

 


Mesa Royalty Trust (MTR)

About Mesa Royalty Trust :”Mesa Royalty Trust holds net overriding royalty interests in various oil and gas properties in the United States. It has interests in properties located in the Hugoton field of Kansas; the San Juan Basin field of New Mexico and Colorado; and the Yellow Creek field of Wyoming. The company was founded in 1979 and is based in Houston, Texas.”

It has a current Market Cap of almost $23 Million dollars.

Mesa Royalty Trust announced a 12.5% Dividend Decreased in it monthly Dividend  in June 2017 from $$0.1122 cents per share to $0.0982 cents per share.

Its new annual Dividend is $1.18 per share.


Arlington asset Investment Corp. (AI)

About Arlington Asset Investment Corp.: investment firm that acquires and holds mortgage-related and other assets. We acquire residential mortgage-backed securities, either issued by U.S. government agencies or guaranteed as to principal and interest by U.S. government agencies or U.S. government-sponsored entities. We also acquire mortgage-backed securities issued by private organizations.

Its Current Market Cap is $350 Million dollars.

In June 2017 Arlington Asset Investment Corp. announced a 12% Decreased in its quarterly dividend from $0.625 to $0.55 per share.

Its new annual dividend is now $2.20 per share.


Superior Industries International Inc. (SUP)

Superior Industries International is a Auto Parts company that manufacturers cast aluminum wheels and supplies automotive manufacturers such as BMW, Ford, GM, Toyota, Fiat Chrysler , Mazda, Nissan, Subaru , Volkswagen , and Tesla.

In its June 2017 Dividend Declaration Superior Industries has Decreased its quarterly Dividend by 50% from $0.18  to $0.09 per share.

Its new Annual Dividend is now $$0.036 per share.



 

For a Complete list of Dividend Decreases and Dividend Increases please visit our Dividend Stock News page.

Previous Month Articles on Dividend Decreases and Increases:

Dividend Decreases for May 2017

Dividend Increases for May 2017

Dividend Decreases for May 2017

“Wheeler Real Estate Investment Trust is headquartered in Virginia Beach, Virginia. “

The following are notable Stock Dividend  Decreases for the Month of May , 2017


TEGNA Inc. (TGNA)

TEGNA is a Digital content provider. TEGNA operates 46 television broadcast stations. Its Digital Brands include: Cars.com , Career Builder.com, G/O Digital, and Premion.

In its May 2017 Dividend Announcement TEGNA has Reduced its Quarterly Dividend by -50% from $0.14 to $0.07 per share.

Its new annual Dividend is now $0.28 per share.


ARES Management, L.P (ARES)

“Ares affiliates manage several publicly traded funds(2), which allow retail and institutional investors to access our expertise across Credit and Real Estate. We believe that expanding investor access to alternative investments provides diversified sources of return and attractive solutions for investors seeking higher levels of income.”

Their funds include : ARES Capital Corporation (ARCC), ARES Commercial Real Estate Corporation (ACRE), and ARES Dynamic Credit Allocation Fund (ARDC)

In its May 2017 Dividend Declaration ARES Management Reduced its Quarterly Dividend -53% from $0.28 to $0.13 per share.

Its new annual dividend is now $0.52 per share.

 


Wheeler Real Estate Investment Trust, Inc. (WHLR)

Wheeler Real Estate Investment Trust is headquartered in Virginia Beach, Virginia. It  was formed with the primary objective of acquiring, financing, developing, leasing, owning and managing income producing assets such as strip centers, neighborhood centers, grocery-anchored centers, community centers and free-standing retail properties.  WHLR’s portfolio consist of approximately 70  properties that are located primarily in the Southeast United States .

In a recent May, 2017 Dividend Announcement Wheeler decreased its quarterly  dividend from 0.42 to 0.34 per share

Its new annual Dividend is now $1.36 per share.


Stage Stores, Inc. (SII)

Stage Stores are Headquartered in Houston, Texas and was originally formed in the 1920’s as two separate family businesses, Palais Royal and Bealls. Today they operate under the following Brand Names: Bealls, Goodys, Palais Royal, Peebles and Stage. Stage operates 820 stores in 38 states.

During its May, 2017 Dividend announcement Stage Stores has Decreased its Quarterly Dividend from $0.15 to $0.05 per share.

Its new Annual Dividend is now $0.20 per share.


Terra Nitrogen Company, L.P. (TNH)

Terra Nitrogen is a materials company engaged in the mining, processing and distribution of Nitrogen and related products such as Urea Ammonium Nitrate

In its May 2017 dividend announcement Terra Nitrogen has Decreased its Quarterly Dividend from $1.22 to $0.96 per share.

Its new Annual Dividend is now $3.84 per share.


Time Inc. (TIME)

Time Inc. has many iconic brands including Southern Living, Cooking Light, Health, People Magazine, Sports Illustrated, Money Magazine and of course Time Magazine.

Time Inc. in its May 2017 dividend declaration has Decreased its quarterly Dividend -79% from $0.19 to $0.04 per share

The new annual dividend is now $0.16 per share.


Medley Capital Corporation (MCC)

In its May 2017 declaration of its dividend Medley capital has decreased its quarterly  dividend by -27% from $0.22 to $0.16 per share.

The new annual dividend is now $0.64 per share.


Southside Bancshares (SBSI)

Southside Bancshares is a holding company for Southside Bank based out of Texas.

Related Articles – Double Fun – Double Pleasure  ;

Southside Bancshares Decreases Stock Dividend!

In its May 2017 declaration Southside Bancshares has Decreased its Annual Stock Dividend from 5% to 2%.

This is the first time it has reduced the dividend in 17 years !


GlaxoSmithKline Plc (GSK)

GlaxoSmithKline is a pharmaceutical Drug Manufacturer of a wide range of vaccines, consumer health products and prescription medicines. It is based in the United Kingdom.

In its May 2017 dividend announcement GlaxoSmithKline has Decreased its quarterly dividend by -17.4%. Its quarterly dividend was reduced from $0.23 (Euro) to $0.19 (Euro) per share.

Its new Annual dividend is now $0.76 ( Euro) per share.


Frontier Communications Corp (FTR)

Frontier Communications provides Internet and Communications services to urban and rural ares in 29 states.

Frontier Communications has announced in May 2017 it has Decreased its Quarterly dividend -61.9%

Annually it decreased from $0.42 to $0.16 per share


 

 

For a Complete list of Dividend Decreases for May 2017 please visit our

Dividend News Page

 

Dow 36,000 – Really

I have been hearing the Dow 36,000 drum beat since way back in 1999

I have been hearing the Dow 36,000 drum beat since way back in 1999 when  a Washington Post writer by the name of James K. Glassman and Co-author Kevin A. Hasset published their famous book “Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market”. Their book predicted DOW 36,000 in a short time period – as early as 2002. Of course we all know how that turned out – A big bunch of Hooey ! Glassman and Hasset argued that the old stock market had been replaced with a new model because of the Technology revolution but of course we all now know it was nothing more than a speculative bubble that all come crashing down.

What makes this prediction elusive is the fact that the 30 stocks that make up the Dow has changed over the years. I am writing from memory here so feel free to correct me if I am wrong but I believe that General Electric is the only company remaining in the DOW since 1929. ( Originally the DOW only consisted of 12 companies in the index) .

According to ZACKS in an article titled “The Average Return on the Dow Jones During Its Lifetime” :

The Dow Jones Industrial Average is a price-weighted index. You add the closing prices of each stock and divide by a divisor, which is adjusted for changes in the index. The base value was 40.94 on May 26, 1896, according to a fact sheet published by S&P; Dow Jones Indexes. On May 25, 2012, the Dow closed at 12,454.83, representing a compounded annual growth rate of 5.05 percent over 116 years. However, the stocks in the index have changed over the years. In fact, of the 12 initial companies, only General Electric is still a Dow stock. The performance data over certain periods are more informative. For example, the historical data suggest that the Dow had a compounded annual growth rate of 7.55 percent from a close of 2,002.85 on Jan. 8, 1987 to a closing value of 12,359.92 on Jan. 6, 2012, just 25 years later. The data also suggest that the compounded annual return was about 4.3 percent over the 91 years before 1987.

 

So based on historical data – when can we realistically expect to hit DOW 36,000? My best guess, based on the current valuation of the market of 20,677 and a conservative assumption  of 7% annual gains. we should hit DOW 36,0000 by 2025 or 2026. So yes, unless the world comes to an end or barring some other economic catastrophic event between now and 2025 we will reach DOW 36,000 just like I suspect we will hit DOW 50,000 and DOW 100,000 some day. The DOW will keep marching forward because of Growth and Inflation both of which are by products of an ever expanding society and the need for profits.

The reality is the DOW number means very little to Dividend Income Investors. In fact the members that make up the DOW index have changed many times over the years. It makes for good press and tends to get people excited about the stock market but doesn’t mean much for our bread and butter which are the Dividends. Tell me that the stocks I own are raising their Dividends and that excites me. In my newspaper that is front page news!

 

What about you ? What gets you excited about the stock market ? Share your thoughts

A Graduation Gift That Pays Dividends

This is that time of year when many people , both friends and family are pondering as to what would make the perfect graduation gift

This is that time of year when many people , both friends and family are pondering as to what would make the perfect graduation gift. Many choose cars, exotic vacations, jewelry, money. All nice gifts and I am sure the graduate would be glad to get any of those items after all they are all nice gifts.

Perhaps this year you should consider thinking like a Dividend Income Investor and not just a family member or friend. Dividend Income investors know that material things are nice but they don’t last and most of all they do not provide Future Income. That is why you should consider a gift of Quality Dividend Stocks for that graduate this year. It’s the gift that will dividends, literally.

Some picks that you might consider are :

  • Johnson and Johnson (JNJ) a stalwart for Dividend Stock Investors – Its hard to go wrong with this pick. Having raised its Dividend annually for over 50 years there is a good bet it will continue to do so for the foreseeable future.
  • AT&T (T) another classical name in investing – most of you know that AT&T is another great name but don’t look to the past with this one, look to the future. It’s recent acquisitions of Direct TV , Time Warner and expansion into Mexico shows that it is not going to rest on the laurels of the past but rather it intends to lead to the future.
  • General Electric – This is another classic company but has faltered some in the recent past but I believe this company is setting itself up for a bright future. It has rid itself of all the financial divisions and is concentrating on becoming a digital Industrial leader. I like the direction of the company and believe this stock would make the perfect gift for that special grad.
  • Proctor & Gamble (PG) – While another classic company this one may surprise some as its performance has not been stellar as of late but I believe slow and steady wins the race. This company has products that almost every single one of uses whether we realize it or not. Many of their products are used in everyday life so even during economic downturns we are still buying their products. This company will still be a top pick in another 100 years !

So you say I have convinced you but you are having a hard time choosing which one to invest in? How about choosing two of the four or even splitting it between all four stocks? This sure to be the best gift the Graduate receives and will pay the dividends for an entire lifetime.

What could be a better gift than investing in someone’s future?

Thoughts or comments are welcomed !

Advantages of Dividend Stocks

Dividend Stocks Helps keep track of a company’s financial health

Advantages of Dividend Stocks

Dividend Stocks are popular with many investors for a reason. Personally I usually do not invest in Stocks that do not pay a dividend. If you are retired you have a very good reason to invest in Dividend Stocks – for the Income. Most Dividend Stocks pay the Dividends on a quarterly basis ( 4 times per year) but some pay the Dividends on a monthly basis, Semi annual basis or even an annual basis. I prefer the stocks that pay quarterly or monthly. A good number of stocks not only pay a dividend but they raise the dividend regularly (usually annually). Here is my list of reason I believe so strongly in the power of Dividend Stocks:

 

  • Dividend Stocks Helps keep track of a company’s financial health
  • Provides steady & predictable Income – As long as the Dividend stays intact , it doesn’t matter about the value of the stock itself – the Dividend Income keeps rolling in.
  • Dividend Stocks historically beat the overall markets and non dividend paying stocks
  • Dividend Stocks are less risky because they are returning your investment back
  • If you reinvest your dividends you are in effect dollar cost averaging your stock purchases.
  • Dividends can provide funds to add more stocks
  • Dividend Stocks can be like “Gold Fever” – Once you see the money rolling in it motivates you to save even more.
  • Dividend Stocks have historically outperformed the Stocks that do not pay Dividends

I know there those investors that will disagree with me on owning Dividend Stocks. Some prefer pure growth plays in stocks. There is an advantage to them – when you own a non-dividend paying stock they tend to grow their stock value quicker and you don’t have to pay taxes on the Capital Gains until you sell the stock. This argument is lost in a Tax Deferred account such as an IRA. And for those that desire an income stream because they are near or at retirement age you would be simply out of luck. But if you are very young, have a time frame of greater than twenty years I would certainly not discourage you from investing in Non-Dividend paying stocks but I personally belong in the “Bird in the Hand” camp. Dividends are for the most guaranteed but stock equity appreciation is not.

What do you think? Can you think of other advantages or disadvantages of stocks that pay dividends?  Please share your thoughts and comments below.

 

 

How Dividends Work

Dividends are paid to investors by some companies for their ownership in the company. It is really just a form of profit sharing

How Dividends Work

Many Stocks pay Dividends to investors that own the companies stocks. There are no requirements for a company to pay dividends and in fact some investors prefer that no dividends are payed as they argue that the value of a stock can grow more if the company puts its earnings back into the business itself.Personally I am not in that camp. In fact, I only purchase stocks that pay dividends. There are many advantages to dividends that I have presented here. Advantages of Dividend Paying Stocks.

Dividends are paid to investors by some companies for their ownership in the company. It is really just a form of profit sharing. When you purchase stock of a company you are in reality purchasing shares of a company that represents a percentage of ownership. So if a company issues 1 billion shares you in effect own 1 Billionth of that company for each share you purchase. The board of directors decided how much the company will pay based on a percentage of the profits it earns. If the metrics state that the Payout Ratio for the company is 85% that means they are paying its investors 85% of its earning and the company is retaining 15% of its earnings for use by the company as it sees fit.

Usually a company raises its dividends and some companies even raise it on a yearly basis. Again, there is no obligation for them to do so and no set amount or percentage for it to be raised. This is a decision that is made by the company’s board of directors. Companies have no responsibility however, to pay out the dividends to shareholders and occasionally a company that has a history of paying dividends may decide to reduce the dividend per share or even cut the dividend altogether.

There can be various reasons for a company to reduce or cut out its dividend payments such as needing the money for acquisitions of other companies or it could mean that the company is having financial difficulties. One recent example is that of many oil related companies. Many companies reduced or stopped its dividends when the price of oil plummeted for a long period of time. They were producing the same amounts of their product but the collapse in price on the market meant they could not sell it for the prices they were getting. At one point oil was going for over $100 a barrel and then it quickly fell to under $40 per barrel. This affected their cash flow to the point where many were forced to reduce or stop their dividends.

Dividends can be paid in various ways. Most are paid on a quarterly basis but some companies pay monthly, semi annually or even yearly. Some , mostly foreign stocks, can pay on an irregular basis.

Dividends can also take on other forms such as being paid in the form of stock in lieu of cash.

Some companies also choose to pay out special dividends in addition to their regular dividend payments. This is usually done when a company comes into a larger than expected revenue that it has no current plans for the use of the excess cash so they distribute it to shareholders in the form of the special dividend.

If Company XYZ stock (Company XYZ is a fictitious company) currently pays a dividend of $1.60 a share and pays quarterly it will pay share holders every three months ¼th the $1.60 or .40 cents per share. If you happen to own 100 shares of company XYZ then you would receive .40 x 100 = $40.00 in dividends or $160.00 per year.

If company XYZ paid on a monthly basis you would receive 1/12th of the $1.60 each month or .1333 cents per share you owned each month. In this case 100 x .1333 = $ 13.33 each month.

Companies that pay dividends also issue an ex dividend date and a date of record for qualification of receiving the dividend.  An investor must be an owner of record and own the stock by the ex dividend date in order to qualify for the dividend for that period. This mainly affects you during your initial purchase of the stock as after that 1st period you will have owned the stock for the entire qualifying period. This would also apply to dividends issued in company stock. So if company XYZ pays a 5% Stock dividend each year you must also meet the ex dividend and date of record qualifications. So for the stock dividend company XYZ is this example would be your 100 shares x 5% = 5 additional shares you would receive. The Stock Dividend is rare though and very few companies pay dividends with their stock.

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