With an increase in consumer spending in the early months of 2010, apparel brands such as Oxford Industries (OXM - Get Report) are finally seeing solid revenue numbers. And thanks to a 22.2% dividend increase, investors are seeing some pretty impressive numbers themselves, with a quarterly payout of 11 cents per share. That increase puts Oxford's yield at a competitive 2.06%.
Oxford designs, produces and markets apparel for its own brands as well as private labels, selling directly to wholesalers, national chains, and department stores. The company's higher-margin branded products, which account for around 64% of sales, include names such as Tommy Bahama and Ben Sherman.
Oxford's business model is a strong one for a fickle apparel market. With high cost variability and outside manufacturers, the company can scale down its operations relatively easily without bleeding red ink. Despite significant losses in 2009 due to one-time expenses, the company has maintained a solid track record of profitability in the downturn, and its dividend remains fairly safe -- despite margins that are lower than we typically like to see.
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-- Written by Jonas Elmerraji in Baltimore.
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