Dividend Stocks of the Week - TheStreet

Dividend Stocks of the Week

These stocks, including Flowers Foods and Rockwell Automation, Recently increased their dividends.
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BALTIMORE (Stockpickr) -- While last week was a relatively quiet one for dividend increases -- only eight companies increased their payouts -- it remained a newsworthy one for BP (BP) - Get Report, which last week was insistent that it would maintain its now-high-yielding dividend in spite of rising recovery costs in the Gulf coast in the wake of the Deepwater Horizon oil spill. But management might be reconsidering the implications of it's now-10.25% yield: The company's management is now reportedly considering "all options" on its $2.6 billion quarterly payout.

Last week was also big for closed-end funds. A slew of income funds from


(BLK) - Get Report

and Nuveen Investments announced that they were increasing their shareholder payouts as well.

But from our standpoint, the real focus remains on equities. Over the last 36 years, dividend stocks outperformed the rest of the

S&P 500

by 2.5% annually, and they outperformed nonpayers by nearly 8% each and every year, 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.

Here's a look at some of the

companies that increased their dividends last week


10 Stocks with Special Dividend Potential >>

Rockwell Automation

(ROK) - Get Report

is an industrial specialist that develops factory automation and control solutions for manufacturers. Although that business has had some significant setbacks in recent years, it's come back in a big way now as companies attempt to retool their factories with more cost-effective automated systems. That has parlayed well into Rockwell's share price, and the company has seen shares rally more than 70% since the first day of 2009. Now, with a 20.7% dividend increase, shareholders are seeing even bigger returns from this $7.5 billion equipment maker.

Large dividend payouts are nothing new to Rockwell: Over the past three years, the company has paid out more than half of its available cash flow to its shareholders. With a very strong balance sheet in tact, expect Rockwell to maintain those payouts for the foreseeable future.

One firm that's hoping Rockwell will do just that is

MD Sass Associates

, a New York-based asset manager that's one of Rockwell's largest institutional owners. Other MD Sass holdings include


(GOOG) - Get Report



(BA) - Get Report


While the past couple of months have been especially tumultuous for the oil industry, one company that's managed to skirt much of the drama is

Helmerich & Payne

(HP) - Get Report

, the contract oil and gas driller. But what's really getting investors' attention right now is the company's dividend. Last week's dividend 20% dividend hike brings H&P's payout to 6 cents per share.

H&P is one of the specialists in complex drilling , and customers are willing to pay for that expertise. The firm's FlexRigs provide H&P with the ability to handle complex jobs at a lower cost than many of their competitors while charging a premium over them. That pricing has provided the company with robust double-digit margins and a huge market for its services. A low corporate debt load should have this cash flow generator keeping up with its shareholder payouts without batting an eye.

Breeden Capital Management

, a Connecticut-based investment manager founded by former SEC chief Richard Breeden, is a large owner of Helmerich & Payne. The firm also holds large stakes in



- where Breeden is a board member - and

Dun & Bradstreet



Flowers Foods

(FLO) - Get Report

is a $2.3 billion wholesale bakery that's behind well-known consumer brands like Sunbeam, Nature's Own, and Holsum. Flowers has been an innovator in the baked good industry for years, targeting health-conscious consumers' dollars as well as more efficient distribution channels. Those advances have helped the company maintain a 2.8% dividend yield, a number that spiked last week thanks to a 14.3% dividend increase.

Flowers benefits from a relatively inelastic demand for baked goods. Regardless of the economic conditions the nation is facing, consumers will continue to buy staples like bread. But while sales continue to be strong for Flowers, the company has managed to pull off an impressive feat: passing increasing commodity costs onto consumers while maintaining its competitiveness. Much of that is the result of a growing geographic footprint and brand loyalty. To be sure, Flowers faces significant growth challenges in 2011 thanks to market domination by some of the larger commercial baking operations - but the company should rise to the challenge.

While Flowers carries more debt than I'd like to see, the company's fast inventory turnover should keep cash flows at the levels they need to be. The dividend should continue to be a draw of this issue.

Who Owns Flowers Foods John Keeley

For the rest of this week's dividend stocks, check out the

Dividend Stocks portfolio

on Stockpickr.

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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

, in

Consumer's Digest

and on