BALTIMORE (Stockpickr) -- Last week, as with the week before, only six companies announced that they were raising their payouts to shareholders. While last week's dividend increases kept up the slow streak investors have been seeing in September, the re-emergence of big-name payers was one changed that was welcomed by Wall Street.
There's a reason why investors pay such close attention to dividend actions: Historically,
are a good place to be.
Over the last 36 years, dividend stocks outperformed the rest of the
by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, according to a study from NDR. And right now, companies that are willing to part with cash in arguably tough times are worth a second look.
Without further ado, here's a look at this
BioMed Realty Trust
is a niche real estate investment trust that leases lab and office space to the life sciences community. The trust has had a strong year in 2010, spurred on by strong financial performance at its portfolio properties, as well as a dividend hike earlier this year. Last week, the company announced a 13.3% dividend increase, bringing its payouts to shareholders to 17 cents per share.
Niche REITs have become a popular investment choice for investors thanks to hefty dividend payouts and relatively few ill effects from the ebb and flow of the real estate market. These REITs typically use long-term triple-net leases, under which tenants are responsible for most of the costs of maintaining a property -- leaving the trust with thick margins and dependable income. BioMed is no different.
While BioMed has underperformed many of its peers in terms of income and yield, this stock's valuation reflects that. Ultimately, a strong balance sheet and portfolio with key properties should keep this trust trucking in 2010.
One of BioMed's biggest institutional shareholders is the
(NOSGX), which owns 568,000 shares of the trust. The fund's other stakes include
Quick-service restaurant giant
is no stranger to our list of dividend increasers; the company typically pays out around 35% of its net income as dividends to shareholders. Last week, the company raised its payout level to reflect stronger financial results, hiking its quarterly payouts by 19% to 25 cents per share.
Yum! has been struggling to keep its dividend yield up, as a 30% year-to-date increase in share prices in 2010 lowers its relative payouts in kind. The ultimate winners in this situation are the company's long-term shareholders, who are enjoying higher dividends at a lower cost basis than their late-to-the-party peers. But the future likely holds more of the same for Yum, a company that's simultaneously seeing domestic growth and dominating the quick service business in China.
Among those long-term owners of Yum is the
(VFINX). The fund's other positions include
For risk-averse investors,
Marsh & McLennan
could be a good choice. The company's bread and butter is risk management, providing risk consulting, insurance, and human resources services. Last week, March & McLennan raised its quarterly dividend by 5% to 21 cents per share, giving the stock a respectable yield of 3.3% at current levels.
March & McLennan has been breaking new ground lately, pushing hard to expand its insurance business and bring new insurance industry insiders to the company's helm. While the company saw its margins squeezed in recent years, March & McLennan continues to benefit from the integration of its various units. By providing both risk-consulting services and insurance brokerage to a client, March & McLennan is able to eke out a competitive advantage over peers who solely focus on insurance sales.
Ultimately, this company is backed by a strong financial portfolio -- a factor that should help attract new clients and new investors hungry for the company's dividend yield.
Those investors include the
(AWSHX), which holds a three-star rating from Morningstar and focuses on finding dividend opportunities. Other holdings include
For the rest of this week's dividend stocks, including
, check out the
And if you haven't already done so,
today to create your own dividend portfolio.
-- Written by Jonas Elmerraji in Baltimore.
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At the time of publication, author had no positions in stocks mentioned.
Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.