Home > Some Dividend Increases During Earnings Season (MSFT, OHI, O, GLW, WHG, KMP)
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Some Dividend Increases During Earnings Season (MSFT, OHI, O, GLW, WHG, KMP)

October 25th, 2012

Jim Trippon: Nestled in among the earnings reports, sometimes along with them, are announcements of dividend increases. As we’ve written about consistently, this has been a year where dividend increases have consistently appeared, as many companies continue to reward shareholders. The last few weeks were no different, with several companies announcing dividend hikes.This has been the subplot of the earnings season, where dividend news has been strongly overshadowed by some earnings reports that missed analyst estimates and have caused the market to take at least a pause, if not a hard look at things. Still, many companies make their annual dividend increases in the fall, so this can be a busy time for dividend investors who watch these stocks.

Microsoft Five Year Chart

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Last month Microsoft (NASDAQ:MSFT) made its eighth consecutive annual dividend increase, to 23 cents per share. This was a 15 percent increase, and brings the yield to 3 percent. While Microsoft is one of the big names of tech, it is, however, “old tech.” That is, even though Microsoft dominates the PC field with its Windows operating system, it is no longer the meaningful growth stock it once was. Some would argue it’s no longer a growth stock, period. As growth has slowed, the massive change to tablets and mobile devices has begun, a secular trend that doesn’t look as though it’s ever going to be reversed.The dividend may assume greater importance in Microsoft’s future.

A Couple Of REIT Increases

Many investors probably haven’t heard of Omega Healthcare (NYSE:OHI), which is a healthcare REIT. The company recently raised its quarterly dividend to $0.44, a nearly 5 percent increase. The yield on Omega Healthcare with the new dividend payment is now 7.5 percent. Many of the healthcare REITs, which are required just as regular REITs are, to pass through roughly 90 percent of their income to investors, pay high yields.

Omega Healthcare Five Year Chart

Source: Yahoo Finance

Regular REIT, Realty Income (NYSE:O), which acquires and owns commercial real estate, yields around 4.4 percent. It recently increased its distribution, or dividend payment, to just over $0.15 per share, or unit. This is slightly more than a 4 percent increase in its dividend. Realty Income is a solid mid-level yield play, as its distributions have been increased each year for nearly two decades. Though the growth of the dividend hasn’t been spectacular, there’s a place in most portfolios for a solid company which makes steady dividend increases.

A Financial Stock And A Glass Stock

Westwood Holdings Group (NYSE:WHG) is probably another stock that many investors haven’t followed. This is an asset management company whose dividend yields 4.2 percent. Westwood increased its quarterly dividend from 37 cents to 40 cents, and on occasion has paid out special dividends. Although asset management is a growing industry, the company has a high dividend payout ratio, roughly 80 percent, so it will need to have strong earnings growth to pull that figure down to a more reasonable level.
Most times the market responds positively to news of a stock’s dividend increase, though this isn’t always the case. Corning (NYSE:GLW), whose earnings report was greeted with a mixture of indifference and concern over a potentially softer economy for its products, such as Gorilla Glass and other display panel technology, raised its dividend by 9 cents. The dividend increase was 20 percent so the stock now yields 2.7 percent. Revenue was down a bit and earnings were essentially flat, but the diversified glass products maker has not only raised its dividend but has a share buyback program as well.

An Energy Play

Kinder Morgan Energy Partners (NYSE:KMP), a master limited partnership, is an energy pipeline and storage company. Kinder Morgan has been one of the most successful energy MLPs, and generates significant cash flow which fund its strong distributions. It currently yields 5.9 percent after it recently increased its quarterly distribution for the 16th consecutive year. Kinder Morgan operates 180 storage terminals, has more than 75,000 miles of pipeline assets, while it continues new strategic investments and acquisitions. As a pipeline transportation company, Kinder Morgan operates as a toll business, so its fees aren’t as volatile as fluctuating commodity prices. This is a historically strong MLP.

Kinder Morgan Five Year Chart

Source: Yahoo Finance

Investors can search for worthwhile candidates to invest in by sifting through the constant dividend increase announcements, and see if any of the stocks match their portfolio needs.

Written By Jim Trippon From Global Profits Alert

Jim Trippon, founder of Trippon Financial Media, Inc., is a maverick that has dedicated his investment career to helping investors make smarter financial and stock selection decisions. Trippon,  an internationally recognized expert on global and value investing, has a deep passion for finding hidden value in global equity markets. Trippon started his career as a financial statement examiner with Price Waterhouse which allows him to dissect a public company’s financial  picture and better identify hidden gems. Trippon’s savvy approach to investing and personal finance makes him in high demand by major media who seek his unique perspective on stocks and global economics. He has  been featured in top publications both in the US and abroad including  Bloomberg, Investor’s Business Daily, The New York Times, The International Herald Tribune, Stock Futures and Options Magazine, The Bull and Bear Financial Report and he regularly appears on broadcast television including as an on air contributor to CNBC, CNN, Fox Business, and Fox News.

This information was brought to you by GlobalProfitsAlert.com, a publication of Trippon Financial Research, Inc. GlobalProfitsAlert.com publishes information on Investing in the China stock market and emerging markets, dividend stock and income investing, exchange traded funds (ETFs), green energy stocks, technology stocks, global market trends and other investment information. To view archives or subscribe, visit www.globalprofitsalert.com.


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