10 Dividend Stocks Increasing Payouts

(10 dividend stocks increasing payouts report updated with inside trading details at Archer Daniels Midland.)
NEW YORK (TheStreet) -- BP (BP), Time Warner (TWX) and Mattel (MAT) joined a roster of companies raising their dividends in recent weeks.

Dividend activity has picked up in recent months as companies begin to regain some sense of stability in 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 around 2.3% year to date. The WisdomTree LargeCap Dividend Fund ( DLN) ETF is up nearly 4% so far in 2011.

>> 10 Top Dividend Stocks for 2011

The dividend universe has been out of favor for most retail investors the last few years, said Lawrence Glazer, managing partner with Mayflower Advisors. The pendulum, however, has turned back toward the investment strategy lately as market watchers hedge against inflation and look for rising income streams.

Glazer told TheStreet that Europe- and U.S.-based large-cap dividend payers "are back in vogue now, relative to what was working last year." He said that for risk-averse investors trying to generate higher less-volatile returns -- but not necessarily beat the market -- investing in developed dividend payers makes a lot of sense.

He suggested investors consider the " Dogs of the Dow," the highest-yielding stocks in the Dow Jones Industrial Average, namely Verizon ( VZ), Johnson & Johnson ( JNJ), Merck ( MRK) and Kraft Foods ( KFT) -- blue chips that will generate higher returns than 10-year Treasury notes and which carry "the best balance sheets in the world."

To capture a proxy for domestic dividend-paying stocks, Glazer suggested considering ETFs like the iShares Dow Jones Select Dividend or SPDR S&P Dividend ( SDY), and for international dividend payers, the iShares Dow Jones International Select Dividend Index Fund ( IDV). The latter boasts a higher yield, he said, and "speaks to the idea of getting paid to go outside the U.S. and take on a little more risk." For a long-term sustainable dividend income, Glazer said to look at an ETF like the Vanguard Dividend Appreciation ( VIG). Its yield is only around 2%, but "investors need to think about total return and appreciation potential," Glazer said.

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

(Yields are based on Feb. 8 closing prices.)


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BP ( BP)

Company Profile: London-based BP provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products, through its two business segments: exploration and production, and refining and marketing.

BP reinstated its dividend at 7 cents per share for the fourth quarter of 2010. It will be first shareholder payout since it suspended its dividends in June 2010 following the Gulf of Mexico oil spill in April. The dividend is half of what it paid in the fourth quarter of 2009.

It was the worst environmental disaster in U.S. history, resulting from an oil rig explosion that killed 11 workers and led to billions of barrels of crude spilling into the Gulf waters.

"We believe now is the right time to resume payment of a dividend to our shareholders," said BP Chairman Carl-Henric Svanberg. "We have chosen a prudent level that reflects the company's strong underlying financial and operating performance but also recognizes the need to fully meet our obligations in the Gulf of Mexico and to maintain financial flexibility." The oil company said it intends to "grow the dividend level over time, in line with the improving circumstances of the company."

BP posted fourth-quarter earnings of $5.57 billion compared with year-earlier profits of $4.3 billion. Results included a charge of $1 billion related to the Gulf of Mexico oil spill. BP reported a 2010 loss of $3.72 billion. The charge related to the oil spill for 2010 was $40.9 billion.

In February, the Mobile County school system in Alabama sued BP, alleging the Gulf oil spill led to a loss of revenue from lower home values resulting from reduced property taxes.

"I believe we will get some money because we deserve it," said Superintendent Roy Nichols. "We've been harmed and we need to be made whole."

Time Warner

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Time Warner ( TWX)

Company Profile: New York City-based Time Warner is a media and entertainment company, whose businesses include interactive services, cable systems, filmed entertainment, television networks and publishing.

Time Warner increased its dividend by 10.6% to 23.5 cents per share, payable on March 15 to stockholders of record at the close of business on Feb. 28. That will bring Time Warner's yield to around 2.6% going forward.

Time Warner said it expects its adjusted fiscal 2011 earnings per share to grow in the low-teen percentages compared with 2010 adjusted EPS of $2.41. Analysts' consensus was for the media company to earn $2.63 in fiscal 2011.

Time Warner beat fourth-quarter earnings estimates on strong overall revenue gains. For the quarter ended Dec. 31, Time Warner grew profits 21.9% to $769 million, or 68 cents per share. Excluding items, fourth-quarter earnings were 67 cents per share. Analysts were expecting a profit of 62 cents. Revenue increased 8.3% to $7.81 billion from $7.21 billion, reflecting growth at the company's networks and filmed entertainment segments.

Total revenue at its Time publishing unit dropped 2%, while a 3% gain in its advertising revenue was more than offset by a 2% drop in subscription revenue.

In February, AOL CEO Tim Armstrong increased his holdings in the Internet company by more than 40%. He bought 477,000 shares of AOL ( AOL) at an average price of $20.97, for a total cost of more than $10 million. Armstrong previously owned 1.1 million, or a 1.04% stake.

Armstrong's purchase suggests a vote of confidence in AOL's restructuring efforts as it moves toward an ad-supported digital media model.


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Broadcom ( BRCM)

Company Profile: Irvine, Calif.-based Broadcom is a provider of semiconductors for wired and wireless communications.

Broadcom raised its dividend by a penny per share to 9 cents. It will be paid on March 7 to holders of Class A and Class B common shares on Feb. 18, bringing Broadcom's yield to around 0.8%.

The company also announced a $300 million share-repurchase plan as it beat expectations with record fourth-quarter results. Broadcom's revenue came in 45.5% higher at $1.95 billion; adjusted profits spiked 27.1% to 75 cents per share.

"Our record results, powerful balance sheet and strong operating cash flow enable us to increase our dividend by 12.5% and accelerate share repurchases," Broadcom CEO Scott McGregor said in a statement.

Broadcom's results came hot on the heels of strong results from rival Qualcomm ( QCOM), which has been reaping the benefits of strong smartphone sales. Both chipmakers provide yet more evidence of a robust IT spending environment.

Archer Daniels Midland

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Archer Daniels Midland ( ADM)

Company Profile: Decatur, Ill.-based Archer Daniels Midland is a processor of oilseeds, corn, wheat, cocoa and other feedstuffs and is a manufacturer of vegetable oil and protein meal, corn sweeteners, flour, biodiesel, ethanol and other value-added food and feed ingredients.

Archer Daniels Midland raised its shareholder payout by a penny per share to 16 cents. It will pay the higher dividend on March 10 to shareholders of record on Feb. 17, marking 79 years of uninterrupted dividends. The higher dividend will bring Archer Daniels Midland's yield to around 1.8%.

Archer Daniels Midland easily topped quarterly expectations with record operating profits as net income surged 29.1%.

ADM booked quarterly profits of $732 million, or $1.14 per share, up significantly from year-earlier earnings of $567 million, or 88 cents per share. Adjusted for one-time gains related to its acquisition of Golden Peanut, earnings per share came in at $1.06. Net quarterly revenue came in 31.6% higher at $20.93 billion, beating expectations for the top-line figure to come in at $17.48 billion.

Corn processing profits jumped 38% to $399 million, attributed to favorable ethanol margins. In ADM's agricultural services unit, earnings nearly doubled to $426 million, thanks to record exportation volumes of grain and oilseeds while crop and transportation prices improved.

In February, analysts from Jefferies upgraded ADM to buy from hold, setting a $44 price target on the stock.

The equity research firm cited the move based on ADM's continuing ability to drive margin expansion.

Separately, several C-Level officers of ADM conducted insider trades in mid-February.

Vice president and controller John Stott sold nearly 16,000 shares for around $576,000, and exercised options for another near-13,000 shares. Dennis Riddle, president of ADM's corn sweeteners and starches, sold 5,000 shares for around $183,000. Vice Chairman John Rice sold a combined 126,000 shares for around $4.5 million, and exercised options for another 126,000 shares.

Hartford Financial Services

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Hartford Financial Services ( HIG)

Company Profile: Hartford, Conn.-based Hartford Financial Services is an insurance and financial services company providing investment products, individual life, group life and group disability insurance products and property and casualty insurance products in the U.S.

Hartford Financial Services raised its dividend for the first time since 2007, doubling its payout to 10 cents per share.

The higher dividend will be paid on April 1 to shareholders of record at the close of business on March 1, bringing Hartford's yield to around 1.3%.

Amid the credit and financial crisis that hit global markets in 2008-9, Hartford accepted bailout funds from the U.S. government -- a bailout it repaid last year.

Hartford posted an improved fourth-quarter profit of $619 million, or $1.24 per share, as investment losses narrowed in the period. Excluding some investments, earnings were $1.06 a share, topping analysts' consensus view.

Limited Brands

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Limited Brands ( LTD)

Company Profile: Columbus, Ohio-based Limited Brands operates as a specialty retailer of women's apparel, beauty and personal care products and accessories under various trade names. It operates in two segments: Victoria's Secret and Bath & Body Works.

Limited Brands raised its dividend by a third to 20 cents per share, from 15 cents, marking its 145th consecutive quarterly dividend. The higher payout will be available on March 11 to shareholders of record on Feb. 25, bringing Limited's yield to around 2.5%.

Limited Brands raised its fourth-quarter forecast after reporting that January same-store sales -- or sales at stores open at least one year, a closely watched metric in the retail business -- soared 24%. Analysts were forecasting a much smaller increase of 6.7%.

The month was driven by Victoria's Secret's semiannual sale, which started one day later, pushing some sales out of December and into January. Victoria's Secret is rarely promotional, which creates pent-up demand, traditionally making its semiannual sale a big sales week.

Limited lifted its fourth-quarter outlook to $1.23 to $1.25 a share, from a previous range of $1.02 to $1.17 a share. For February, the retailer said it expects flat to slightly positive same-store sales.


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Mattel ( MAT)

Company Profile: El Segundo, Calif.-based Mattel designs, manufactures and markets a variety of toy products worldwide through sales to its customers and directly to consumers.

Mattel announced a 10.8% increase to its annualized dividend, intending to pay investors 92 cents this year, up 9 cents per share from its annualized dividend of 83 cents last year.

The toymaker's next shareholder payout will be a quarterly dividend of 23 cents per share, payable on March 11 to holders of record on Feb. 24, bringing its yield to around 3.6%.

Mattel beat fourth-quarter expectations and said improved sales in its core toy brands -- Barbie, Hot Wheels, Fisher-Price and American Girl -- helped drive the quarter's results. Mattel booked net profits of $325.2 million, or 89 cents per share, down slightly from year-earlier earnings of $328.4 million, or 89 cents per share.

Quarterly revenue increased by 8.2% to $2.12 billion, getting a boost from the holiday shopping season. The top-line figure included a 2% unfavorable impact from foreign currency exchange rates.

Mattel sought a mistrial this week in its ongoing battle with privately-held MGA Entertainment over who owns the rights to the Bratz line of dolls.

Mattel asked the judge for a mistrial based on comments made by MGA CEO Isaac Larian, who said that Mattel's stress-inducing actions led to his father's death and destroyed his family. Mattel wants the remarks declared false to the jury, or a mistrial be affirmed.

U.S. District Judge David O. Carter said Mattel should refile the motion with supplemental information.

The trial, which began Jan. 18, alleges that Bratz designer Carter Bryant conceived of the Bratz doll idea while working at Mattel, and later implemented it when working for MGA.

MGA's Bratz, which debuted in 2001, has sold $3.3 billion worth of products, generating $292 million in profits. Barbie profits, meanwhile, declined by $393 million .

A federal jury awarded Mattel $100 million two years ago, finding that Bryant did develop the Bratz idea while working for Mattel, but the verdict was overturned and the case sent back for a retrial.


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Company Profile: Atlanta-based UPS offers an array of services in the package and freight delivery industry. It operates through three segments: U.S. Domestic Package, International Package and Supply Chain and Freight.

UPS raised its dividend by 10.6% to 52 cents per share from 47 cents. The higher payout will be available on March 2 to shareholders of record on Feb. 14, bringing UPS' yield to around 2.8%.

UPS' dividend more than tripled since 2000 when it paid investors 17 cents per share. Last year it boosted the payout to 47 cents, from 45 cents.

The package delivery firm posted a 48% jump in fourth-quarter profit and an 8% rise in revenue as global shipments increased amid economic recovery.

UPS expects to book record profits in 2011 as it looks to international exporting markets like Germany and emerging markets like China.

UPS forecast full-year earnings-per-share in a range of $4.12 to $4.35.

On Feb. 7, UPS announced the expansion of its UPS Express Freight service into Israel and Slovakia, hubs for high-tech industrial and automotive companies.


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Aetna ( AET )

Company Profile: Hartford, Conn.-based Aetna is a health care benefit company, which offers traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans.

Aetna nearly quadrupled its annual dividend to 15 cents per share, up from payout of 4 cents per share in 2010, and moved to a quarterly dividend payment cycle. The higher dividend will be payable on April 29 to all shareholders of record on April 14. That will bring Aetna's yield to around 1.6%.

Aetna forecast stronger-than-expected 2011 earnings to be in a range between $3.70 and $3.80 per share, higher than the $3.27 view analysts were expecting. Analysts have since upwardly revised their expectations and are now looking for the health care company to book $3.53 per share.

Aetna recently posted a higher fourth-quarter profit even as revenue fell. Earnings surged 30% to $215.6 million, or 53 cents a share, while sales fell 2.5% to $8.54 billion. Adjusted earnings for the latest quarter were 63 cents a share.

In Feb. analysts from Susquehanna upgraded their rating on Aetna from neutral to positive.

Citigroup analysts raised their price target on the insurer to $38, setting a hold rating on Aetna shares. Citi also boosted its earnings-per-share estimate on the stock, citing lower pension costs and a decreased share count.

Goldman Sachs upgraded Aetna to buy from neutral, setting a $44 price target on the stock. The analysts noted that recent channel checks suggest improving fundamentals.

Analysts at Barclays Capital raised their price target on Aetna by $4 to $45, setting an overweight rating on the stock.

Avon Products

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Avon Products ( AVP)

Company Profile: New York City-based Avon Products is a global manufacturer and marketer of beauty and related products. Its product categories are Beauty, Fashion and Home.

Avon announced a 4.5% increase to its quarterly cash dividend. The new rate will be 23 cents per share, payable on March 1 to shareholders of record on Feb. 17, bringing Avon's dividend yield going forward to around 3.1%.

On Feb. 8, Avon posted disappointing fourth-quarter earnings on slower sales in China and the number of representatives selling its products in the emerging market.

Avon Products said net profit dropped 14.8% to $229.5 million, or 53 cents per share. Adjusted for one-time losses of around $58 million, or 9 cents per share, related to restructuring charges, Avon earned $259 million, or 59 cents per share.

Avon's revenue, which rose 1% to $3.14 billion, also came in shy of expectations for top-line sales of $3.28 billion, reflecting service disruptions in Brazil and sluggish sales in Russia, as well as weakness in China.

Avon had cautioned investors on Feb. 1 it would record those restructuring charges, which involved an overhaul of the beauty products maker's business in China. Avon conducted an internal investigation of its operations in the region following allegations of bribery.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to http://twitter.com/miriamsmarket.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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