Recent Dividend Increases

As a dividend growth investor, one of the primary objectives I seek is passive dividend income from my investments that increases over the rate of inflation, annually. It’s always wonderful news when companies decide to reward loyal long-term shareholders with a dividend raise. Some recent dividend increases include:

Southside Bancshares, Inc. (SBSI) recently declared its quarterly dividend at $0.20, which wasn’t a raise. But check this out. They announced not one, but two special dividends to be paid out with their normal quarterly dividend. They are going to pay a special dividend of $0.20 per share as well as another special dividend of $0.13 per share. This is a total of $0.53 to be paid out to shareholders on December 6, 2012. Recently, SBSI made my shopping list for November. Alas, I didn’t add to it before the recent price in its share price. I purchased shares in other companies instead, which I’ll be discussing soon. This is a solid community bank, in my opinion.

Emerson Electric Co. (EMR) raised its dividend 2.5% recently, now paying $0.41 per share quarterly over its previous rate of $0.40. You can look at this two ways. First, 2.5% is probably disappointing to many shareholders. Keep in mind, however, that this is its 56th year of consecutive dividend raises. For that kind of security I’m willing to give management the benefit of the doubt and allow them to maintain an air of conservatism in the current economy. I do hope that shareholders will be more amply rewarded in future raises. 

AT&T Inc. (T) now has 29 years of consecutive dividend growth behind it, with a recent raise in the quarterly dividend from $0.44 per share to $0.45 per share. This was to be expected, and follows what has been $0.01 annual raises in the quarterly dividend over the last few years. I’m okay with a 2.3% raise on this one, as it was expected and the high yield makes up for the lower growth.

Visa Inc. (V) has been on quite a dividend growth streak lately. It recently announced an increase in the quarterly dividend, with a new rate of $0.33 per share. That’s a raise of 50% over the last quarterly dividend of $0.22. I think V is going to be quite a strong dividend growth story going forward, and really regret passing on this stock around $90 per share at the end of last year because of a low entry yield. It’s now firmly out of my buy range.

What do you think of these moves?

Full Disclosure: Long T, SBSI, EMR

Thanks for reading.

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    • says

      The Executioner,

      Thanks for stopping by.

      I’ll have to keep my eye on SBUX. I haven’t followed them very closely because they typically trade at a higher valuation than I buy at, and so correspondingly the yield is also typically lower than I like to receive.

      You may be right, however. This might be the next Dividend Champion in the making.

      Best wishes!

  1. says

    Hi Mantra,

    Have you ever done a historical look-up of dividend growth stocks to see how many stopped rewarding investors over time? For example if we take a list of dividend champions from 15 years ago and compare it to today’s list, which ones were removed?

    I would be interested in checking what happened to each of them to see if a pattern can be established. If you have already done something like that I would greatly appreciate you sharing the info. It would save the time of your regular blog reader :)

    Thanks in advance,

  2. Steve says

    I own T and am not frustrated (yet) with their .01 dividend increase in their dividend. It brings me to 7.8% YOC. How can I complain about that?

    Their recent announcement related to their investment in infrastructure made some folks head for the exit but I’m going to stay with them as long as they continue to show signs of transitioning from their land line business model to high speed internet and mobile communications.

    One challenge with investing in large companies that have been in existence for decades is the possibility of being too slow to change with the market (RCA, Kmart, Eastman Kodak, AMC, etc.). What good is an economic moat if the competition finds a way around it? T has this danger but so far has managed to adapt their business model to the changing telecommunications market. As many great DG writers have said, we should not buy and hold but buy and monitor.


    • says


      Thanks for stopping by.

      Yeah, I’m okay with T and the increases. I anticipate this type of growth as long-term. But, again you’re getting a pretty high yield. T isn’t a blockbuster investment, but is good for current income. I use T to supercharge my dividend income to reinvest back into other attractive opportunities.

      As far as some of the companies you’re talking about, one should always buy and monitor rather than just hold blindly. It’s extremely important to monitor business performance and make sure that the fundamentals are still there. If a company’s business model no longer is relevant (Kodak), then it’s time to move on.

      Also, it should be noted that a lot of companies that people point to like Sears and Kodak and what not were never dividend growth stocks in the first place. I always like to make sure I’m investing with a company that can pay a dividend, and can also raise that dividend at a decent clip annually, because I know the cash is there to pay out to shareholders. It’s the “proof in the pudding” as they say.

      Nothing like tangible proof that the company is currently profitable, has been profitable for a long time, and is anticipating future profitability.

      Best wishes!

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