Here is an article from SmartMoney on divdend increases for the month of March by Jack Hough. 3 Stocks With March Dividend Boosts
The past year was the worst in decades for dividends. Even so, it wasn’t horrible. Payments for companies in the S&P 500 index shrank 17% from their peak. Compare that with share prices, which fell about 60% from top to bottom; earnings, which briefly turned negative; and share repurchases, which all but disappeared. Also, much of the dividend damage was confined to giant banks with outsized influence on S&P 500 returns, including dividends. Beyond banks, more companies increased or initiated payments than trimmed or eliminated them.
For yield hunters, times are challenging mainly because of share prices, not payments. A market run-up has shrunk the S&P 500’s yield to a paltry 1.9% — less than half the historic yield for U.S. stocks. However, plenty of companies have announced payment increases in recent weeks, so the index’s indicated yield for 2010 is a touch higher, at about 2%. Below are three S&P 500 members that announced dividend increases this month, and whose indicated yields top 2%.
Wal-Mart
Dividend increase (annual rate): from $1.09 to $1.21
Yield: 2.2%
Wal-Mart (WMT) is colossal. The firm's yearly sales are five times those of Costco (COST), six times those of Target (TGT) and 23 times those of JC Penney (JCP).
This year, with early signs suggesting the economy is healing, Wal-Mart’s sales are forecast to rise 5%. However, earnings per share are expected to increase by closer to 9%, thanks in part to stock repurchases. Last year, the company spent 73% more on its stock than on dividend payments.
Air Products
Dividend increase: from $1.80 to $1.96
Yield: 2.6%
Every breath humans draw holds profit potential. Nitrogen is useful for freezing food; oxygen is a must for hospitals and fish farms; and hydrogen allows oil refiners to turn crude into useful fuels. Air Products & Chemicals (APD: 74.09, +0.28, +0.37%) sells these and other gasses and the equipment companies need to produce gasses on-site. Steady demand from the medical, food and energy businesses helps to reduce the company’s economic sensitivity, and rising energy needs in emerging economies bode well for growing gas sales.
PepsiCo
Dividend increase: from $1.80 to $1.92
Yield: 2.7%
PepsiCo (PEP: 66.77, +0.22, +0.33%) has thus far lost the war for cola dominance to Coca-Cola (KO: 54.87, +0.10, +0.18%), and yet it brings in about two-thirds more in yearly sales than its rival. That’s because Pepsi is mostly a snacks company. Brands like Doritos and Lay's give the company a 39% share of the U.S. market for salty snacks (and a 23% share in Europe), along with a valuable distribution network. Like Coca-Cola, PepsiCo recently bought its bottlers. That should allow the company to reduce overlapping distribution costs and keep a closer watch on what's happening at stores, but also adds exposure to rising commodity costs. The recent dividend increase comes as little surprise. PepsiCo is a Dividend Aristocrat — Standard and Poor’s designation for those members of its 500 index that have boosted payments in each of the past 25 years.
Disclosure: The Div Guy owns share of PEP at the time of this post.
