BALTIMORE (Stockpickr) -- Another large batch of companies announced increases in their dividend payouts last week, marking the third consecutive week that firms have alerted Wall Street to bigger yields en masse.
That fact -- along with decent earnings releases -- has finally spurred some gains in stocks, with the
both up 5.71% over that period. That performance has been a welcome change for investors, who've seen the market tumble on a volatile slide for the past several months.
But for dividend investors, it's been a slightly less bleak outlook. After all, even when share prices of most companies are languishing, dividend stocks still generate income. Now is as good a time as ever for
, with yields as high as ever on some of the world's most attractive stocks.
But that's not all.
Historically, dividend stocks are a good place to be. 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, 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.
Here's a look at
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Unpleasant though it may be, garbage is profitable. At least that's the picture being painted by
, a $12 billion waste management firm. Republic increased its quarterly dividend 5.3% last week, bringing its payout to shareholders 20 cents per share. That ups the company's yield to 2.39% at current price levels.
Republic, which announced a merger with rival Allied Waste in 2008, is finally starting to benefit from the cost savings of integrating the two firms, with around $190 million in synergies targeted in the company's third quarter guidance, announced last week. While the merger gives Republic Services significant scale advantages, it also increased the company's leverage. That fact continues to threaten dividends in the event that Republic doesn't meet its fixed costs for a quarter. Still, with the combined company now panning out, investors should continue to collect cash for the foreseeable future despite the added debt.
One of Republic's biggest owners is
, who owns shares through his firm,
. Other positions held by Buffett's firm include stakes in
2010 has been a strong year for rail transportation company
. The company has seen shares appreciate more than 10% since January, while major indexes such as the S&P 500 continue to flop around break-even. But shareholders aren't just banking on capital gains -- management announced a 5.9% dividend increase last week, bringing the company's total payout to 36 cents per share.
Simply put, Norfolk Southern is one of the most impressive railroad stocks in the U.S. The firm announced earnings last week, improving operational efficiency by moving 22% more freight volume with only 10% more staffing. The company managed that feat while maintaining the best safety record in the industry. Dividend are a big part of Norfolk Southern's strategy too -- the company, which offers one of the biggest yields in the industry, has a targeted 33% payout ratio.
One of the big beneficiaries of that returned shareholder value is the
(FBSAX), a mutual fund that looks for balance sheet value in its portfolio companies. Other holdings include
American National Insurance
. The fund's biggest position right now is cash.
Who Owns Norfolk Southern?
Acropolis Investment Management
It's been an interesting couple of years for the semiconductor industry, as low demand and high inventories took a tremendous toll on chip sales. Now though, with revenues starting to tick back up,
Maxim Integrated Products
is one semiconductor firm that's taking care of shareholders who held on, increasing its payout 5% to 21 cents per share.
Maxim's engineering expertise has afforded the company a wide economic moat in the high performance analog chip market - and in turn in its income statement. The company sports double-digit margins and an incredibly attractive dividend policy that's set Maxim's current yield at 4.56%, an impressive payout for a tech firm. Very little debt should help cement the company's payout in place if tumult returns for the chip market.
Among Maxim's biggest institutional shareholders is the
(DODGX), which holds a three-star rating from Morningstar. Other positions include
For the rest of this week's dividend stocks, check out the
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At the time of publication, the Rhino Stock Report was long BRK.B.
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.