Dividend Stocks for the Week
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By Jonas Elmerraji
BALTIMORE (
) -- Last week,
raised their dividends, a shift from the sparse dividend increases of the previous two weeks. Increasing a dividend is a big deal for any company, but it's a particularly significant event in the midst of a recession. Dividends are so significant because historically companies that pay 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.
That's why every week Stockpickr reviews recent dividend declarations and compiles a portfolio of
. These stocks represent some of the most enticing investments on the market right now.
Some familiar names increased their payouts last week, including
Philip Morris International
(PM) - Get Report
, the international tobacco company that spun off from
Altria
(MO) - Get Report
last year. Philip Morris, which consists of many of Altria's international tobacco holdings, operates in 160 countries. The company raised its dividend by 4 cents per share, bringing its yield to 4.8%.
The dividend hike comes as a double whammy for PM shareholders, many of whom turned to the cigarette stock because of its "sin stock" status. "Sin stocks," which include tobacco, alcohol and gambling companies, are known for high margins and recession resistance and are especially popular when economic times are tough.
Funds are fond of PM -- holders include the five-star rated
Bread & Butter Fund
(BABFX) and the
(VFINX). The Vanguard index fund also owns dividend-payer
Johnson & Johnson
(JNJ) - Get Report
, which sports a 3.2% yield, and
Coca-Cola
(KO) - Get Report
, with a 3.1% yield.
While students may know
Texas Instruments
(TXN) - Get Report
for its ubiquitous calculators, this dividend-increasing semiconductor company is also a major defense contractor and microchip developer. Management raised Texas Instruments' dividend from 11 cents per share to 12 cents, resulting in a 2% yield at present.
But an improving dividend isn't the only thing luring investors to this stock. Shares have already shot 54.5% since January.
Those in on that action include the
(VPMCX). The fund, which Morningstar rates at five stars, doesn't discriminate: It also owns shares of nonpayers such as
Apple
(AAPL) - Get Report
and
Amgen
(AMGN) - Get Report
.
With several more increasers, there are plenty of dividend plays to take a look at this week. For the rest of this week's dividend stocks, check out the
portfolio on Stockpickr. And if you haven't already done so,
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 any stocks mentioned.
Jonas Elmerraji based out of Baltimore, 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.
