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BALTIMORE (Stockpickr) -- Last week brought another strong turnout for dividend stocks despite economic headwinds threatening to push stocks lower to end the first quarter of 2010. All told, 23 companies increased their payouts to shareholders last week, a high number that suggests companies are feeling confident about their abilities to profit in this economy -- confident enough to part with balance sheet liquidity in favor of shareholder value.
But dividend increases are more significant than that. Historically, companies that pay higher dividends materially outperform those that don't, and when the market turns bearish, dividends could be the only semblance of return that investors see for a while. And while dividend payouts are great, dividend increases are even better, particularly in this economy, which forces management to choose between prioritizing balance sheet liquidity and sharing profits with shareholders.
Here's this week's round-up of recent
. These stocks represent some of the most interesting income investments on the market right now.
Despite a year-to-date that's left major stock indices in the red, pharmaceutical and diagnostics company
has managed to keep its head above water thanks to strong guidance numbers and good news from the FDA. Last week, the company increased its dividend 10% to 44 cents per share. That brings the stock's yield to about 3%.
Abbott Labs has long been a Wall Street favorite thanks to strong performance in the recession-shielded medical supply and pharmaceutical markets. And while many competitors are anxious over major patent expiries in the next couple of years, Abbott is largely free of patent losses at the moment, which barricades the firm's profits even more. With guidance pointing toward a strong 2010, investors are reaping the benefits from capital gains
a strong yield.
One fund that's banking on that is the
(FCNTX), which holds stakes in
in addition to Abbott Labs.
made news yesterday following an announcement that the company would
of its biggest bottler in the U.S. and Canada in a deal valued at around $12 billion. The move is similar to the one
is in the midst of finalizing right now. The company increased its dividend 7.3% last week to 44 cents per share.
Worldwide, Coca-Cola is one of the most dominant brands in history. The company's distribution network spans more than 200 countries worldwide, and the company's namesake beverage continues to lead the profitable cola segment in sales. That's on top of Coca-Cola's being deemed the most valuable brand in the world by Interbrand for several years running now. At present, Coke's dividend yield rings in at 3.09%.
One of Coca-Cola's biggest shareholders is the
(FADAX), which owns positions in
in its diversified portfolio.
Baltimore-based investment services firm
T. Rowe Price Group
hiked its dividend 8% last week to 27 cents per share, giving the asset manager a 1.99% yield. T. Rowe has long been a leader in the financial services arena, something that proved itself to be especially true in 2008 as the firm's conservative approach to investing spared clients some of the catastrophic losses of riskier firms.
As a result, the company saw its assets under management grow 40% in 2009 when investors deemed it safe to get back into the market. T. Rowe focuses on the retirement services business, with a considerable chunk of its client funds dedicated to retirement accounts and target date funds. That's a trend that should serve the company well as a renewed focus on planning for retirement sweeps Wall Street.
The five-star rated
(RYFSX) is betting on T. Rowe Price right now - the firm is currently the fund's fourth-largest holding. Other positions include
( MXB) and
For the rest of this week's dividend stocks, check out the
portfolio on Stockpickr.
And if you haven't already done so,
today to create your own dividend portfolio.
-- Written by Jonas Elmerraji in Balitmore.
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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
, and has been featured in
Investor's Business Daily