10 Stocks Initiating Dividends in 2010
2010 has become the year of the dividend. Last year, 68 of the S&P 500 stocks cut their dividends and another 10 stocks completely suspended their dividend payments. Nearly midway through 2010, only a single S&P 500 stock has cut their dividend (Valero Energy) and only one stock suspended their dividend payments (Tesoro).
While news of BP’s dividend cut has captured the majority of headlines in recent weeks, 2010 could end up being a banner year for investors. Here is a look at the 10 stocks initiating dividends in 2010.
Cruise operator Carnival kicked off the dividend announcements on January 21, when they announced that they would resume their quarterly dividend. The company also announced that they expect to grow the dividend payment in the future. The stock is up 4.0% since initiating the dividend and currently yields 1.1%.
Tellabs shares have surged 18% since the tech firm initiated a $.02 per share quarterly dividend in late January. TLAB currently offers a 1.2% dividend yield.
Time Warner Cable
Time Warner Cable was the second consumer discretionary stock to initiate a dividend in 2010. TWC didn’t go cheap either, declaring a quarterly dividend of $.40 per share. Since then the stock is up nearly 27%, but still offers a 3.0% dividend yield.
In early February, Broadcom initiated a quarterly dividend program with an initial cash dividend of $.08 per share. Since the dividend announcement, BRCM shares have climbed 26% and now offer a 0.9% yield.
In February, Expedia became one of the very few internet stocks to offer investors a dividend. Expedia seemed eager to demonstrate to investors the sustainability of their cash flows by initiating a quarterly dividend of $.07 per share. However, dividend investors have not been too impressed and the stock is down 1% since the announcement.
Marriott International reinstated their cash dividend in early February at $.04 per share. The hotel operator had switched to stock dividends in 2009 given the economic uncertainty and high debt ratios. MAR stock price has soared 37% since the dividend announcement pushing the current yield down to 0.5%.
Host Hotels & Resorts
In mid-March, Host Hotels & Resorts initiated a modest quarterly dividend of $.01 per share. The stock yields only 0.3%, but has risen 15% since the March dividend announcement.
On March 16, Patterson Companies initiated a $.10 per share quarter dividend as part of their capital allocation strategy. PDCO is one of only two stocks on this list to not post double digit gains following their dividend initiation (Expedia being the other). PDCO shares are basically flat since March.
One of the biggest dividend announcements this year was from former high-flyer Starbucks. In late March, the ubiquitous coffee chain initiated a quarterly dividend of $.10 per share. SBUX shares have risen 11% since initiating the dividend and currently yield 1.5%.
The most recent company to initiate a dividend was Viacom. The consumer media stock initiated an attractive quarterly dividend of $.15 per share earlier this month. Viacom shares have jumped 10% since the dividend was announced.
It’s interesting that 6 of the 10 stocks initiating dividends in 2010 are Consumer Discretionary stocks. This has also been the top performing sector overall in the S&P 500 with a 9.2% gain (versus a flat return in the total index). Although investors are closing watching the Financial sector for dividend announcements, it seems for now that the consumer sector is the one to watch.