10 Top Dividend Stocks Increasing Payouts

NEW YORK ( TheStreet) -- Starwood Hotels ( HOT), Nike ( NKE) and Campbell Soup ( CPB) joined a roster of companies raising their shareholder payouts in recent weeks .

Dividend activity has picked up in recent months as companies begin to regain some sense of stability in the state of the economy, and visibility of future earnings growth. The iShares Dow Jones Select Dividend ( DVY), an exchange-traded fund that tracks the Dow Jones U.S. Select Dividend Index, is up nearly 9% so far in 2010, and up nearly 12% year-over-year.

With record cash in corporate coffers, investors have been egging on corporate management teams to return value to shareholders in the form of dividend checks, and a growing number of companies are listening.

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% every year, all while paying out cash to their shareholders, according to a study from National Data Research.

There are several advantages to investing in dividend stocks for market watchers with long-term investment plans.

Most simply, dividend stocks allow investors to make money with capital gains and with the dividend payments themselves, explaines Dividend.com, a financial services website that notes "dividend stocks are not a get-rich-quick scheme" for day traders but are key to growing capital over longer periods of time, usually for several years.

Capital gains are booked as a stock's value rises. Dividend payments are awarded to shareholders, usually on a quarterly basis.

Here is a breakdown of 10 dividend stocks increasing their shareholder payouts in recent weeks, ranked by average volume.

National-Oilwell Varco

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National-Oilwell Varco ( NOV) announced it board approved a 10% hike to its quarterly cash dividend.

The oil and gas drilling equipment maker will pay 11 cents per share on Dec. 17 to shareholders of record on Dec. 3.

The increased dividend brings National-Oilewell's yield to 0.7%.

"This dividend increase reflects the company's strong financial condition and our confidence in our business going forward," said CEO Pete Miller.

National-Oilwell Varco stands to profit in 2011 if crude oil prices rise on inflationary pressure. NOV is a leader in the manufacturing and sale of drilling gear, and could see big business if major oil companies look to ramp up production.

In October, National-Oilwell posted better-than-expected third-quarter profits -- though net earnings were flat year-over-year at 96 cents per share -- and said its backlog of orders grew sequentially. Revenue edged 2% lower to $3 billion.

The NOV stock is up more than 37% so far in 2010, dramatically outperforming the broader market.

Limited Brands

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After maintaining its regular quarterly cash dividend of 15 cents per share in early November, Limited Brands ( LTD) declared a special one-time dividend of $3 per share. It will be paid on Dec. 21 to shareholders of record on Dec. 7.

The operator of Victoria's Secret and Bath & Body Works stores also authorized a $200 million share repurchase program.

Limited remains a standout in the retail sector, reporting a surge in third-quarter earnings and upping its full-year outlook.

The retailer now expects full-year earnings in the range of $1.82 to $1.97 per share, from prior guidance of $1.68 to $1.83 per share. For the fourth quarter, which includes the current holiday shopping season, Limited is calling for earnings between $1.02 and $1.17 per share, compared with consensus estimates for EPS of $1.94.

Its third-quarter was helped by more full-price selling, which boosted gross margin. During the recent quarter, Limited earned $61.3 million, or 18 cents per share, compared with year-earlier earnings of $14.9 million, or 5 cents per share.

Limited sales shot up 12% to $1.98 billion, while same-store sales -- or sales at stores open at least one year, a key metric in the retail industry -- surged 10% during the three-month period.

>>6 Black Friday Buys: Retail Earnings Reveal Holiday Winners

Teck Resources

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Teck Resources ( TCK) raised its dividend by 50% on strong commodity price increases.

The semiannual dividend jumped to 30 cents, from 20 cents, bringing its annualized yield to 1.3% at current valuations. It will be paid on Jan. 4 to shareholders of record at the close of business on Dec. 15.

"This dividend increase reflects our confidence in our current balance sheet strength and our ability to fund our strong portfolio of growth assets," said CEO Don Lindsay.

Teck Resources, a diversified miner, had eliminated its dividend in 2009. While the increase of this shareholder payout is an encouraging sign, the semiannual dividend of 30 cents per share remains significantly lower than the 49.2 cents per share it paid in 2008.

The Vancouver company's stock is up more than 34% year to date in 2010, nearly six times the performance of the Dow Jones Industrial Average and S&P 500.

In March analysts from Canaccord Genuity issued an upgrade on Teck Resources stock to buy from hold.

Union Pacific

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Union Pacific ( UNP) announced its second dividend increase in 2010 as its results continue to improve and signs of economic growth continue lift the shipping and rail industries.

The railroad operator upped its dividend by 15.2%, or a nickel per share, to 38 cents. The new dividend is payable Jan. 3 to shareholders of record Nov. 30, giving UNP stock a yield of about 1.7%.

Union Pacific's latest dividend hike equates to a 40% jump in its dividend compared with its first-quarter payout. This is the latest sign of success -- shares have rallied nearly 39% so far in 2010, led most recently by strong third-quarter earnings.

As the freight business picks up, railroads are becoming major beneficiaries once again. With significantly lower operating costs than trucking, railroads make considerable business sense for customers, but had been less attractive to investors as complacency allowed margins to squeeze when times were good.

The recession of 2008 and 2009 forced many prominent rail operators to improve efficiency, and UNP, operator of the largest railroad in North America, was one of the most impressive turnarounds, nearly doubling bottom line numbers in the last few years.

American Funds Investment Company of America ( AIVSX) is one of Union Pacific's biggest institutional shareholders -- as well as one of the largest mutual funds on the market today.

Starwood Hotels & Resorts Worldwide

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Starwood Hotels & Resorts ( HOT) announced a 50% increase to its annual cash dividend. The hotelier will pay its investors 30 cents per share on Dec. 30 to shareholders of record on Dec. 16. That brings its current yield to about 0.5%.

Starwood, which operates hotels under the Sheraton, St. Regis, Aloft and Westin brands, among others, saw its shares climb nearly 53% year-to-date as investors flocked to the turning tide of the hospitality industry in 2010.

Starwood has been following the cues of some competitors lately, opting to focus more on its hotel management business, and less on actually owning the properties that bear its brand names. The result is a business that's less capital-intensive, higher-margin and more recession-resistant. By entering into long-term contracts with hotel owners, the firm manages to retain much of the same control it does over its owned properties without the added downsides.

Still, it's unlikely that owned or leased properties will ever disappear entirely from Starwood's balance sheet. The business is too familiar to the firm to completely eschew. Ultimately, Starwood's mid- to high-range hotel rooms should benefit in a large way from the ongoing rebound in the hotel business.

>>Starwood Beats, Guides Higher

Campbell Soup

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Campbell Soup ( CPB) said its board approved a 5.5% increase to its quarterly dividend, paying 29 cents per share, from 27.5 cents, on Jan 31 to shareholder of record on Dec. 27.

That brings Campbell's current dividend yield to 3.4%.

While 2010 has been a relatively flat year for Campbell Soup, the company's mid-range dividend payout has at least given investors somewhat of a return this year.

Heavy competition in the soup business has proved challenging for Campbell, a company that's traditionally dominated the soup aisle. As with many food makers, rising commodity costs are taking a toll on the firm's bottom line while a soft economy is making the idea of price hikes equally unpleasant.

Despite headwinds, the company still benefits from one of the most recognizable brands in the food business and will continue to enjoy strong free cash flows even if growth numbers fail to impress Wall Street.

Campbell reported an 8.2% decline in first-quarter earnings to $279 million, or 82 cents per share, as U.S. soup sales fell.

For the long term, Campbell's stock has done a good job of impressing financial funds such as the Morningstar four-star-rated Artisan MidCap Value Fund ( ARTQX).

>> Campbell Soup Earnings Fall 8%

Nike

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Nike ( NKE) increased its quarterly dividend payments by 14.8% to 31 cents per share, from 27 cents. The new dividend is payable Dec. 30 to shareholders of record on Dec. 6, and gives the sportswear behemoth a dividend yield of about 1.5%.

Nike has paid dividends consistently for a quarter of a century dating back to 1984. The stock has rallied more than 27% so far in 2010 on strong fundamental performance, with the majority of those gains coming in the last three months.

Nike is the standard-bearer for the athletic apparel industry, with nearly $20 billion in annual sales and one of the most envied brands in the retail segment.

Nike has a strong history of returning value to shareholders, both in the form of dividend hikes and share buybacks that concentrate investors' ownership stakes in the company. With a mammoth footprint in the athletic apparel industry, Nike's facing difficulty finding growth in the saturated U.S. market (especially under current economic headwinds).

For that reason, the company is looking abroad to expand its reach in developing countries where burgeoning middle class consumers are willing to spend. Nike's positioning as a low barrier-to-entry status symbol should afford them extra opportunities in the process.

Among Nike's biggest shareholders is the Fidelity Contrafund ( FCNTX), a mutual fund that holds Morningstar's coveted five-star rating.

Guess?

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Guess? ( GES) said its board approved a 25% increase to its regular quarterly cash dividend, paying 20 cents per share, up from 16 cents. The retailer also announced a special one-time dividend of $2 per share to be paid with the regular quarterly payout.

The combined dividends will be payable on Dec. 23 to shareholders of record on Dec. 8.

Strong results from its European and Asian divisions boosted sales and profit for the clothing retailer in the recent quarter, leading it to best analysts' consensus call. Its forecast topped Wall Street estimates.

During the quarter the specialty apparel retailer earned $69.1 million, or 75 cents per share, easily topping expectations for earnings of 59 cents. Revenue climbed 17% to $613.9 million.

Looking ahead, Guess foresees fiscal 2011 earnings between $3.02 and $3.06 per share, better than the $2.91 per share Wall Street predicts. For the fiscal fourth quarter it is calling for earnings in the range of $1.02 to $1.06 per share, also higher than expectations for $1.02 per share.

Revenue is expected in a range of $710 million and $730 million for the fourth quarter, and between $2.44 billion and $2.46 billion for the full year.

Becton Dickinson

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Becton Dickinson ( BDX) upped its dividend by 10.8% to 41 cents per share.

The dividend will be paid on Dec. 31 to shareholders of record on Dec. 10, bringing its current yield to 2.1%.

The manufacturer of medical devices and instruments, including company

The Franklin Lakes, N.J.-based disposable-medical-supplies company trades around 14 times 2011 expected earnings.

"You hear their business is all about syringes and scalpels, so it's not the sexiest health-care stuff in the world," said Russell Croft, a fund manager at Croft Leominster, "but they're very tied to the volume growth of health care, so they're hopefully steering away from some of the worries about reimbursement risk."

"They have a large diagnostics-test business, which is a growth business. They have a good strong business there. Fifty-five percent of their sales are international, which is very important in health care. They've always been good about returning cash to shareholders. They buy back stock. It's a company in an industry that's been out of favor and they've been growing earnings throughout all of the issues. BDX is one to buy and put away."

Twelve of the 18 research firms with coverage of Becton Dickinson have a "hold" rating on the stock. The other six say investors should buy shares.

Raymond James Financial

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Raymond James Financial ( RJF) increased its quarterly dividend by 18.2% to 13 cents per share, from 11 cents, payable Jan. 19 to shareholders of record Jan. 3.

That brings Raymond James' dividend yield to 1.8%.

Last week Raymond James said it made a loan to a top executive, necessitating it to amend a filing with the Securities and Exchange Commission from nearly a year ago.

Raymond James loaned $1 million Canadian dollars in 2008 to Paul D. Allison, its co-president and co-CEO.

Under terms of the loan, one third of the principal amount was forgiven each year that Allison remained an employee, a typical recruiting inducement in the Canadian securities industry, the filing said.

On finding out about the loan, Raymond James' general counsel said that maintaining it was prohibited under federal securities law since Allison became an executive officer of the company. Raymond James then forgave the remaining balance, about one third of the original loan.

-- Written by Miriam Marcus Reimer in New York.

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