BALTIMORE (Stockpickr) -- The dividend rolls keep getting bigger and bigger. With 10 companies increasing their dividends the week before last and 25 dividend increasers last week, companies seem to be feeling better about increasing the amount of income they pass through to shareholders.
2010 looks like it's going to be a good year for income investors. Standard and Poor's estimates that investors will see a 6.1% dividend increase for stocks in its
index -- significant, considering the estimated 21.4% decline in dividend payouts last year.
At Stockpickr, we pay special attention to each week's dividend hikes, and for good reason: 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. Dividend increases are significant for any company and an even bigger deal in this economy, where management has to decide whether to prioritize balance sheet liquidity or sharing profits with shareholders.
Without further ado, here's this week's round-up of recent
. These stocks represent some of the most interesting income investments on the market right now.
is the utility holding company that's responsible for New York's regulated electric, gas and steam service. The company also reaches customers in adjacent areas of New Jersey and eastern Pennsylvania. Last week the company hiked its dividend to 59.5 cents, a 0.8% increase.
Dividend increases aren't a new phenomenon for ConEd -- after all, the company has managed to increase its dividend annually for more than 30 years, thanks to recession-resistant, predictable revenues. With more than 80% of the company's business coming from powering New York City, Con Ed benefits from a transmission and distribution network that's more valuable than most. And a proposed rate increase submitted to regulators could provide the additional capital the company needs to take the next step in updating and modernizing its infrastructure -- and expanding to outside areas.
One fund that's betting on ConEd is the $383 million
(LEXCX), a fund with Morningstar's four-star rating. The fund holds shares of
in its concentrated portfolio of 21 stocks.
While recessions are typically dreaded by any company, sales actually benefit from poor economics at discount retailer
Family Dollar Stores
The company saw its sales -- and its share price -- rise in 2008, a feat that few of the bluest of blue chips could even muster. Last week, the company announced a 14% dividend increase, hiking its quarterly payout to 15.5 cents per share and giving it a dividend yield of 2%.
Family Dollar has some strong tailwinds at its back, but the need to strike an economic balance might be challenging going into 2010. Increased sales activity and strong margins have contributed to solid income and free-cash-flow numbers, which Family Dollar has typically spent as dividends or share buybacks. And with significant lease expiration in the next few years, the store chain could benefit immensely from renegotiated rents in a depressed commercial real estate market.
Still, as tides have improved economically, shopping at dollar stores decreased precipitously. The chain needs to devise a way to retain customers going into this year.
The managers at
think they can. The New York based hedge fund owns a $143 million stake in the dollar retailer, alongside investments in
While dividends aren't often thought to be the realm of tech companies, which normally retain earnings to fund growth, chipmaker
has been changing the conventional wisdom. Last week, the company raised its dividend 12.5% to 15.75 cents per common share, giving the stock a dividend yield of 3.1%.
Intel continues to be the leading firm in the semiconductor market, thanks in large part to heavy R&D spending and intelligent brand positioning. Currently, the company controls more than 75% of the microprocessor market, far eclipsing its nearest competitors. As computer sales convalesce, Intel should see shares increase in 2010.
One fund that can claim "Intel Inside" is
(TOCQX), which also holds sizable stakes in
For the rest of this week's dividend stocks, 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.