Dividends provide evidence of financial strength. Since dividends are paid in real cash, a dividend payment shows that the corporation has proved that it has earned enough cash to pay its loyal stockholders. Companies that use complex accounting rules in order to create net income out of thin air typically cannot afford to pay dividends. As a result it is no surprise that only the companies with the best prospects can afford to regularly raise distributions.
Below I have highlighted fourteen income stocks, which have raised distributions like clockwork for over five consecutive years:
Intel Corporation (INTC) designs, manufactures, and sells integrated circuits for computing and communications industries worldwide. The company announced that its board of directors has declared an 18.12 cents per share quarterly dividend, reflecting the previously announced 15 percent increase from the fourth quarter of 2010. In addition to that the company’s board of directors authorized an additional $10 billion dollars for share repurchases. Intel has raised dividends for eight years in a row. Yield: 3.40% (analysis)
Williams Partners L.P. (WPZ), a diversified master limited partnership, focuses on transporting; gathering, treating, and processing; storing natural gas; and natural gas liquid fractionating and oil transporting activities. The company operates in two segments, Gas Pipeline, and Midstream Gas and Liquids. This master limited partnership raised its quarterly distribution to 70.25 cents/unit. This is the seventh consecutive annual distribution increase for Williams Partners L.P. Yield: 6%
Commerce Bancshares, Inc. (CBSH) operates as the bank holding company for Commerce Bank, N.A. that provides various general banking services to individuals and businesses. It operates in three segments: Consumer, Commercial, and Wealth. The company raised its quarterly dividend by 2.20% to 23 cents/share. This marked the forty-third consecutive annual dividend increase for this dividend champion. Yield: 2.20% (analysis)
Sunoco Logistics Partners L.P. (SXL) engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. This master limited partnership raised its quarterly distribution to $1.18/unit. This is the ninth consecutive annual distribution increase for Sunoco Logistics Partners L.P. Yield: 5.50%
Magellan Midstream Partners, L.P. (MMP), together with its subsidiaries, engages in the transportation, storage, and distribution of refined petroleum products in the United States. This master limited partnership raised its quarterly distribution to 75.75 cents /unit. This is the tenth consecutive annual distribution increase for this dividend achiever . Yield: 5.50%
Teekay LNG Partners L.P. (TGP) provides marine transportation services for liquefied natural gas, liquefied petroleum gas, and crude oil worldwide. This master limited partnership raised its quarterly distribution to 63 cents /unit. This is the seventh consecutive annual distribution increase for Teekay LNG Partners L.P.. Yield: 6.40%
DPL Inc., engages in the generation, transmission, and distribution of electricity to residential, commercial, industrial, and governmental customers in west central Ohio. The company raised its quarterly dividend by 10% to 33.25 cents/share. This marked the seventh consecutive annual dividend increase for this dividend stock. Yield: 5.00%
The J. M. Smucker Company (SJM) engages in the manufacture and marketing of branded food products in the United States and internationally. The company raised its quarterly dividend by 10% to 44 cents/share. This marked the eleventh consecutive annual dividend increase for this dividend achiever. Yield: 2.90%
Norfolk Southern Corporation (NSC), through its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods. This railroad announced its plans to raise quarterly dividends by 11% to 40 cents/share. This marked the tenth consecutive annual dividend increase for this future dividend achiever. Yield: 2.60%
Praxair, Inc. (PX) engages in the production and distribution of industrial gases primarily in North America, South America, Europe, and Asia. The company raised its quarterly dividends by 11% to 50 cents/share. This marked the eighteenth consecutive annual dividend increase for this dividend achiever. Yield: 2.20%
Rollins, Inc. (ROL), through its subsidiaries, provides pest and termite control services in North America. The company raised its quarterly dividends by 16.70% to 7 cents/share. This marked the ninth consecutive annual dividend increase for this future dividend achiever. Yield: 1.50%
National Instruments Corporation (NATI) manufactures and supplies measurement and automation products. The company raised its quarterly dividends by 15.40% to 15 cents/share. This marked the ninth consecutive annual dividend increase for this future dividend achiever. Yield: 1.40%
Parker Hannifin Corporation (PH) manufactures fluid power systems, electromechanical controls, and related components. The company raised its quarterly dividend by 10% to 32 cents/share. This marked the fifty-fifth consecutive annual dividend increase for this dividend champion. Yield: 1.50%
Energen Corporation (EGN), an energy holding company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the continental United States. The company raised its quarterly dividend by 3.20% to 13.50 cents/share. This marked the twenty ninth consecutive annual dividend increase for this dividend champion. Yield: 1.00%
Investors looking to create a dividend portfolio typically should apply a set of factors to screen out unfavorable candidates. The screen should include criteria such as dividend sustainability, potential for dividend growth out of earnings as well as the number of years investors can afford to wait, until the dividend income is sufficient to cover their needs. Last, but not least, investors should also avoid overpaying for stocks, since this could negatively detract from their long term financial performance.
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