Monday, June 13, 2011

Huge Dividend Increases are a Sign of an Economic Turnaround

What better indication of a company's health than an increase in dividend. And if lots of companies raise their dividend across various sectors, it is a positive sign for the economy. If you own a high yield stock for the long term for its income, and the stock increases its dividend, then you really don't have to care about the day to day or week to week fluctuations in the stock price.

So what companies are providing these pleasant surprises to their shareholders? Target (TGT) bumped up its dividend by 20%, an increase of 5 cents to 30 cents a share per quarter. Target sports a yield of 2.6% and trades at 10.4 times forward earnings.

Caterpillar (CAT) boosted its quarterly cash dividend by two cents to forty-six cents per share. The stock has a dividend payout rate of 1.9% and a forward price to earnings ratio of 10.7.

Chesapeake Energy Corp. (CHK) is increasing its quarterly dividend by 17% to 8.75 cents a share. The company trades at 8.9 times forward earnings and yields 1%.

Iron Mountain Inc. (IRM) announced announced a 33% increase in its quarterly cash dividend. Iron Mountain yields 2.4% and trades at 21.6 times forward earnings.

Stage Stores, Inc. (SSI) announced a 20% increase in the its quarterly dividend rate to 9 cents per share from the previous quarterly rate of 7.5 cents per share. The stock has a forward PE of 10.4 and a yield of 2.1%.

CR Bard Inc. (BCR) also recently announced a dividend increase. The stock yields 0.7% and has a forward PE of 15.4.

Even FedEx (FDX) boosted its dividend. The stock trades at 13.2 times forward earnings and yields 0.6%.

With all these dividend increases, an economic turnaround must be on the horizon. If you like high yield stocks, you should check out some of the downloadable high yield stock lists at

Disclosure: Author owns FDX.


No comments: