A Personal Note
So far, the 4th quarter of 2011 is looking merry and bright. The Dow Jones Industrial Average is up 10.9%, despite all the bad news in Europe and lack of good news in the United States.
Today’s newsletter takes a look at some of the brightest stars in the 4th quarter. We are not referring to companies that have had big moves in stock prices. Since this is the season of giving, our focus is on companies that are giving back to shareholders in a meaningful way.
Read more to learn about 3 companies that have increased their dividend more than 10% in the 4th quarter of 2011.
Catherine Maniscalco Avery
CAIM specializes in creating and managing
customized and fully diversified investment
portfolios for private investors.
The backbone of CAIM’s philosophy is investing in dividend paying stocks over a long time period. The companies we favor have low levels of debt and strong cash flow, giving them the financial flexibility to grow both the dividend and the company’s earnings.2011 has been a challenging environment for most stocks. We have watched the market careen like a roller coaster as we dealt with both foreign and domestic issues. Volatility is now the new norm (as we noted in our report, Total Return Investing: Dividends for an Uncertain World, May, 2011) but what we have been able to count on in our portfolios is the growth of dividends. 25 of our 29 holdings have increased their dividend this year. The average stock in our portfolio has increased their dividend 10.6% in.In this newsletter we would like to highlight three companies that have increased their dividend in excess of 10% in the 4th quarter of 2011. These companies are truly dividend champs.
V.F. Corporation (VFC) is a global apparel company based in the United States. Wrangler, Lee, The North Face, Timberland are a few of their brands. The stock currently yields 2.1%. Their dividend has increased for 39 consecutive years and this year alone it increased 14%, from $.63 to $.72 a share each quarter. Currently they have $8.73 in cash flow per share and only 29% debt. VFC has had a strong year both in the U.S. and overseas. They have fashionable, quality brands at reasonable price points. Earnings are expected to increase 16% in 2012.
Emerson Electric (EMR) designs and sells product solutions for industrial, commercial and consumer markets. Washing machine, air conditioning and industrial automation parts for the oil and gas industry are among the myriad solutions they provide. This company is a dividend powerhouse showcasing 55 years of consecutive dividend increases, even in the most challenging economic climates. With 29% debt to total capital and $4.40 in cash flow per share, they have increased their dividend by 16% this year. They currently yield 3.1%.
Microsoft (MSFT) develops licenses and sells software products. The company generates $3.03 in cash flow per share and has only 17% in debt. Their dividend increased 25% from $.16 to $.20 per share each quarter this year. Often regarded as a dinosaur in the software world, Microsoft is still a major player for business applications. Windows 8 is expected to debut mid to late 2012 and will benefit the tablet market. Xbox continues to be a strong gaming franchise.Copyright 2011, CAIM LLCDisclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON. TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER. EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER’S INVESTMENT NEEDS AND OBJECTIVES.
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